Global payroll in the engineering, manufacturing & mining sectors

Global Payroll in the Engineering, Manufacturing and Mining Sectors - Global EMS

Linked to a strongly performing global economy, the Engineering, Manufacturing and Mining sectors continue to grow rapidly; particularly in Asia and emerging markets. A recent report from the economics consultancy Cebr on Engineering and Global Economic Growth (commissioned by the Royal Academy of Engineering) identified India and Vietnam in particular as “future engineering hotspots”.

Rapid Growth and Corporate Governance

But in achieving outcomes which match the forecasted opportunities, one of the primary challenges becomes maintaining Corporate Governance while retaining a capability for rapid deployment. To initiate a project and support the incoming new people, offices, and finance and HR systems, you need to have people already in place who can get this right while working to an accelerated schedule.

Good Corporate Governance requires a firm grasp of compliance, financial and structural factors, as well as Tax and Data considerations: especially since price-sensitive markets mean that cost control and efficiency are key drivers. However, we’ve seen that in emerging markets, new projects in new countries can be agreed with very short timescales to implementation. In the face of this, the speed of implementation and delivery of large-scale projects presents a major hurdle to controlling costs and Corporate Governance.

Fortunately, an innovative approach to payroll can help with this. This article draws from our experience working with clients from the Engineering, Manufacturing and Mining sectors, and sets out some of the proven solutions we’ve helped apply in these cases.

Knowledge of the industries involved and their requirements must be supported by the automation and integration of processes to reduce or remove the need for more people, reducing costs and speeding up the project implementation. This extends to a Global Process with flexible transitions: an efficient HR and Payroll support mechanism capable of delivering both cost savings and improved Corporate Governance.

Corporate Governance and Payroll

As a rule, the most successful companies are the best governed; and the opposite holds true when companies are in the news for the wrong reasons.

As such, the correct setup of a country or project is vital to ensure, not just initial compliance, but ongoing compliance and transparency. But quickly putting together a new HR and Payroll support mechanism is not easy, so it’s important that companies build off or integrate with existing mechanisms when expanding into new areas.

To do this, compliant systems and processes need to be set up globally. The company structure and tax structure must be correctly understood and organized to ensure the most cost-effective regime; and factors critical to the payroll, such as the immigration status of individuals, must also be considered. All while remaining aware of rules around data control, including the incoming GDPR regulations.

The cost savings from getting this right are multiple: resources; time; tax and payment efficiencies, including FX; and the overall cost of the process, including IT changes. All these can be analysed further, following the best process for the company to maximise savings and benefits, in line with the company’s overall corporate strategy.

Dependent on the status of a company, we have driven savings in excess of 10x the cost of implementing and running a refined payroll process.

Automation and Integration

We’ve already mentioned how the best way to start a new project is to build from existing resources and experience.

But when resources are diverse and globally distributed they can become difficult to manage, let alone draw from effectively.

This is why there is such value in the integration of systems: compliance, cost effectiveness and control are all made easier when there is a single, central solution ensuring quality.

To make this quick and effective to utilise, there needs to be automation in the upload and processing of data passing through this central, single solution. This reduces the resources required, the error rate, and the time taken to complete the process, providing the ‘knock-on’ advantages of shorter repair loops, later cut-off dates and improved cashflow. Importantly, to implement all this effectively requires expertise supported by robust systems.

Of course, the complexities of payroll extend beyond this, and don’t just affect Engineering, Manufacturing and Mining; the benefits of strong corporate governance and streamlined processes would be valuable to any sector.

But other sectors have their own industry-specific requirements, as we explored in our piece on Overcoming Complexity in the Energy Sector. What makes the dynamic of factors and necessities in Engineering, Manufacturing and Mining so important here is the requirement for speed of implementation of compliant systems and structures, and, therefore, the need for a high degree of integration and automation of data and systems. In turn, the creation of a healthier cashflow provides more flexibility in managing the response to price-sensitive markets.

Global EMS Case Study

Let’s take an example here, drawn from our own global payroll expertise with an Engineering organisation. This client was growing globally, during which an immediate and very large project came up in a developing country, with an available timeframe of only 8 weeks for operations to be up and running. This challenge focused the minds of everyone involved, and the financial requirements and immediacy of the project drove the automation and transition of that country.

We found that the approach taken benefitted payroll, expense management, tax, finance and the company itself; as well as providing savings and facilitating the rapid delivery of the project with fewer people.

Startlingly, it removed the need for 3 extra Global Payroll staff and 6 extra Financial staff who would all have been required in-country and trained within the 8-week timeframe.

And this was on top of the savings already made through the refinement of the payroll process, which we have mentioned are more than 10x the cost of implementation and ongoing support.

When the client’s operations in other countries saw the advantages this project had generated in its approach, there was buy-in from across the board.

They could see that this wasn’t just about payroll but the immediate enablement of a project without having to increase and train the supporting staff needed to make it work; thus saving large amounts on time and financial resources.

Since then we have started looking at other areas within the organisation to articulate who is positioned to benefit; the range of stakeholders is far wider than would be assumed in a more old-fashioned or conventional understanding of payroll.


So what can we learn from all this? Firstly, that with the Engineering, Manufacturing and Mining Sectors growing rapidly in a number of regions globally, especially Asia and emerging markets, the key driver becomes balancing the need for fast implementations, often in new areas, while remaining in control of Corporate Governance. We can summarise this as: speed versus efficiency, compliance and control.

In any industry, a balance is needed between all factors, and some, such as compliance, are non-negotiable. But with Engineering, Manufacturing and Mining the requirements are particularly urgent because projects often work with accelerated timeframes, trying to get everything up and running correctly in countries as quickly as possible. This means there must be ‘know-how’ supported by automation and integration of systems; neither can work effectively without the other.

Combined, the result is the ability to vastly speed up project implementation, radically reduce costs and reduce or remove the need for more staff to initiate the project, while improving the overall Corporate Governance within the company.

The right approach means you don’t have to lose out or compromise on any of the required factors.

With our own clients, some specifically within the Engineering, Manufacturing and Mining sectors, we’ve successfully used this approach to drive savings of more than 10x the implementation and ongoing cost of running the refined payroll process, generating savings in resources and time, tax and payment efficiencies (including fx), and the overall process cost (including IT changes).

As impressive as these results already are, we always believe there is room for refinement, which is what makes this approach possible. As long as you have access to the necessary expertise supported by appropriately automated and integrated systems to implement all this, there are always improvements which can be made. And when all parties see what there is to gain for their sector of the company, their buy-in to refinements and technological innovations quickly follows.

If you are an organisation operating in the Engineering, Manufacturing & Mining sector and seeking the right advice and service for global payroll, contact us today on –

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