How do workforces affect payroll proficiency?
This proficiency driver focuses on the composition of workforces, including the variety of profiles, statutes and contracts, as well as the level of mobility of people moving in, through and out the organisation. After all, no workforce is the same. And if companies go international, it tends to get more complicated as there’ll be linguistic, cultural and other issues. Get a glimpse of which countries experience significant or limited impact from their workforces for payroll proficiency.
Scores by country
The impact of workforces: size matters
The composition of workforces is the driver that affects payroll proficiency in Europe the most after legislation. Unsurprisingly, that’s specifically the case for larger companies. Just under half of them say their workforces are making payroll handling (much) more difficult. To compare, only a quarter of SMEs say the same. Obviously, also international employment plays a big role. Think about split payrolls, frontier work, etc. International companies, however, often work with payroll partners or shared service centres, so the perceived complexity of their workforce is reduced.
Els Hanssens, Sales Director International Markets at SD Worx
Workforces in the heart of Europe
Ranked from most proficient to least proficient:
The UK claims top spot for most proficiency drivers. Workforce is no exception. No less than 41% of the 274 surveyed British companies indicate that their workforce composition is making payroll (much) easier, while another 42% of companies report ‘no impact’. Particularly the variety of employee groups and statutes seems to be less of a problem in the UK.
The movement of personnel (new contracts, other statutes, etc.) doesn’t seem to bother Dutch employers much, since they’re used to nomadic employees – both within and outside the company. That doesn’t mean letting go of people, however, is an easy procedure. First, you should ask the Uitvoeringsinstituut Werknemersverzekeringen (UWV) or the district judge for permission, because dismissals are only allowed under certain circumstances. Besides that, you will need to pay a transition compensation.
The fact that different working time regimes influence payroll is a daily reality for many German companies. For instance, the system of short-time working (Kurzarbeit), a temporary reduction of normal working hours under a subsidised scheme, can make payroll tricky. The income replacement rate covered by the government is typically 60% (more for workers with children), while the employer has to pay 80% of the total social security contributions owed on the reduced working hours.
A varied workforce equals a troublesome payroll in France. An example: although égalité – or equality – is one of the cornerstones of French culture, not everybody is entirely equal in the eyes of the (labour) law. The amount of an employee’s salary and their level of responsibility define their status (either executive or non-executive). This has repercussions for the rate of social contributions and the working conditions.
Our 2022 Payroll Proficiency Index reveals that mainly Belgian companies struggle with their workforces. Only legislation has an even bigger impact on payroll proficiency. But, then again, both drivers are intertwined in Belgium, because of the many legal implications connected to employee statutes, contracts, etc. There are, for example, different rules for white-collar and blue-collar workers, ranging from vacation allowance to salary calculation.