How CEE payroll managers are getting on top of their admin burdens How CEE payroll managers are getting on top of their admin burdens

How CEE payroll managers are getting on top of their admin burdens
09 Apr 2018

One of the top challenges for HR and payroll professionals across Central and Eastern Europe (CEE) over the year ahead will be finding and nurturing the necessary talent to ensure business success.

This is one of the key findings of research undertaken by the Harvard Business Review (HBR) and sponsored by TMF Group to explore trends and developments in the region. The problem is that birth rates in CEE are low and emigration levels are high, which has led to labour shortages and wage inflation.

Unsurprisingly then, in Poland, the HBR research found that a key focus for managers this year will be recruitment (41% of those questioned). For CEE executives across the board, it is all about building a strong employer brand (40%). The aim here is to make their organisations more attractive in order to woo local candidates, lure emigrants home or entice new immigrants to join them. Staff development is another priority.

Side-tracked by administration

But the issue that many professionals face in achieving these goals is that too much of their time is spent handling payroll-based administrative tasks (84% of Poland-only managers versus 88% of CEE execs). The vast majority are also struggling with over-complicated and manual payroll processes (82% in Poland versus 93% in CEE) and in meeting deadlines for completing HR and payroll reports (99% for both).

To make life even more difficult for CEE managers, however, they also face the additional burden of having to deal with suppliers using inconsistent HR and payroll data formats (81%) and needing to consolidate data from different markets (58%).

As a result, there is a growing trend towards introducing middleware to solve such complexity problems. This software sits as a layer over the top of existing systems and makes it possible to pull all of the necessary data together in a more accurate and timely manner into reports for compliance purposes.

It also enables HR and payroll professionals to manage their payroll more effectively, providing visibility across the countries in which they operate and allowing them to play a more strategic role in the business.

The outsourcing phenomenon

Another approach to help tackle some of the challenges faced, meanwhile, is to outsource. About a third of CEE-wide companies, and one in five Polish firms, have now outsourced their HR and payroll services, according to the HBR research. Payroll preparation, administration and legal issues are the most common options here.

In terms of the rationale behind such a move, cost savings are high on the agenda, as is gaining access to often difficult-to-find experts and expertise - and the advantages of going down this route are many.

HR and payroll professionals across the region found they had more time to focus on supporting the business rather than becoming bogged down in administrative tasks. They also benefited from easy-to-use secure automated processes, and faced a lower risk of errors.

In fact, it was on the automation of payroll processes and data security side of things that outsourcing providers were rated most highly. They also did well in terms of providing complex and sector-specific services.

Therefore, it seems likely that outsourcing will continue to grow in the region over the next few years. Just under two thirds of Poland-only managers expect this to be the case, while the same is true of 53% of CEE executives.

Shifting focus

Increased automation, an ever-strengthening outsourcing market and the introduction of middleware to ease complexity are just three of the ways that businesses across the region are attempting to free themselves from their admin burdens and address the dire implications of their skills shortages.

Read more about the latest global trends in HR and payroll - download this study undertaken with the Global Payroll Association.

Daniel Proychev

Daniel Proychev is regional director for Central and Eastern Europe at TMF Group, where he oversees 12 countries and 1,100 employees. He is an experienced accounting and finance professional (FCCA) who has been with the company for 20 years. Prior to his current position, Daniel played key roles in building its business operations in Bulgaria, Croatia and the Nordics region.

One of the top challenges for HR and payroll professionals across Central and Eastern Europe (CEE) over the year ahead will be finding and nurturing the necessary talent to ensure business success.

This is one of the key findings of research undertaken by the Harvard Business Review (HBR) and sponsored by TMF Group to explore trends and developments in the region. The problem is that birth rates in CEE are low and emigration levels are high, which has led to labour shortages and wage inflation.

Unsurprisingly then, in Poland, the HBR research found that a key focus for managers this year will be recruitment (41% of those questioned). For CEE executives across the board, it is all about building a strong employer brand (40%). The aim here is to make their organisations more attractive in order to woo local candidates, lure emigrants home or entice new immigrants to join them. Staff development is another priority.

Side-tracked by administration

But the issue that many professionals face in achieving these goals is that too much of their time is spent handling payroll-based administrative tasks (84% of Poland-only managers versus 88% of CEE execs). The vast majority are also struggling with over-complicated and manual payroll processes (82% in Poland versus 93% in CEE) and in meeting deadlines for completing HR and payroll reports (99% for both).

To make life even more difficult for CEE managers, however, they also face the additional burden of having to deal with suppliers using inconsistent HR and payroll data formats (81%) and needing to consolidate data from different markets (58%).

As a result, there is a growing trend towards introducing middleware to solve such complexity problems. This software sits as a layer over the top of existing systems and makes it possible to pull all of the necessary data together in a more accurate and timely manner into reports for compliance purposes.

It also enables HR and payroll professionals to manage their payroll more effectively, providing visibility across the countries in which they operate and allowing them to play a more strategic role in the business.

The outsourcing phenomenon

Another approach to help tackle some of the challenges faced, meanwhile, is to outsource. About a third of CEE-wide companies, and one in five Polish firms, have now outsourced their HR and payroll services, according to the HBR research. Payroll preparation, administration and legal issues are the most common options here.

In terms of the rationale behind such a move, cost savings are high on the agenda, as is gaining access to often difficult-to-find experts and expertise - and the advantages of going down this route are many.

HR and payroll professionals across the region found they had more time to focus on supporting the business rather than becoming bogged down in administrative tasks. They also benefited from easy-to-use secure automated processes, and faced a lower risk of errors.

In fact, it was on the automation of payroll processes and data security side of things that outsourcing providers were rated most highly. They also did well in terms of providing complex and sector-specific services.

Therefore, it seems likely that outsourcing will continue to grow in the region over the next few years. Just under two thirds of Poland-only managers expect this to be the case, while the same is true of 53% of CEE executives.

Shifting focus

Increased automation, an ever-strengthening outsourcing market and the introduction of middleware to ease complexity are just three of the ways that businesses across the region are attempting to free themselves from their admin burdens and address the dire implications of their skills shortages.

Read more about the latest global trends in HR and payroll - download this study undertaken with the Global Payroll Association.

Daniel Proychev

Daniel Proychev is regional director for Central and Eastern Europe at TMF Group, where he oversees 12 countries and 1,100 employees. He is an experienced accounting and finance professional (FCCA) who has been with the company for 20 years. Prior to his current position, Daniel played key roles in building its business operations in Bulgaria, Croatia and the Nordics region.