Insights on payroll perspectives in Asia

Jonathan Fryer, Mazars’ Head of Accounting and Payroll Outsourcing Services in Asia-Pacific, was interviewed by Pazaar, our global payroll technology partner. Jonathan was asked to share his insights on payroll perspectives in Asia and to provide advice on how businesses can survive in a disruptive environment.

Keywords: Mazars, Thailand, Asia, Payzaar, HR, Global, Payroll, Finance, International, Multi-Country

17 March 2020

The interview was featured in Payzaar’s recent newsletter, Pay Like a Pro. Mazars has partnered with Payzaar, a modern, cloud-based technology platform that automates processes and aggregates data from around the world, to deliver its global payroll services.

1. What are the biggest challenges you see for multinational companies growing and expanding in Asia related to their back-office functions (i.e. Payroll/ HR/ Finance & Accounting)? Do you see any challenges that are particular or unique to Asia?

Language – multinational companies work in English, and proficiency across Asia varies significantly. Whether it is communicating with local colleagues or dealing with customers and suppliers, the language barrier can make it much harder to work efficiently. On top of that, documentation, regulations, banking platforms, etc., are difficult to read or translate.
The exposure from and impact of staff turnover can be more significant as a result of low levels of unemployment in many countries in Asia and strong competition from multinationals for talented employees.
Another mistake is assuming that the processes and policies do not have to be localized. This seems to be a challenge, especially for fast-moving companies that are looking to expand rapidly.

2. How complex do you feel payroll regulation and compliance is in Asia compared to other parts of the world? Which countries within Asia are particularly complex when it comes to payroll? What changes to do see in the regulatory environment?

It is less complex than Europe where, in many countries, there are strict employment laws and regulations, mandatory social insurance, pensions, etc. Having said that, countries like Japan and Australia would be on par with Europe. However, it is the lack of clarity and consistency when dealing with government agencies in Asia that create additional complexity and the need for strong local expertise.

We do see some improvement as Asian countries compete for foreign direct investment and therefore want to improve their ‘ease of doing business’ ranking.

3. What advice would you give to a company who is thinking about setting up operations in Asia?

Don’t rush. A lot of countries in Asia have restrictions on foreign ownership, requirements for obtaining licences, and other red tape. This takes time to understand, navigate, and handle correctly. There are frequently investment promotions available with very attractive tax and non-tax incentives, which should also be explored thoroughly. Depending on the industry sector, the requirements will vary considerably.

It would also be completely wrong to assume that a one-size-fits-all approach will work when operating across Asia. There are significant cultural differences in the region, even between countries that share the same border. The really successful companies know how to localize their products and services.

4. How have the expectations from clients changed in recent years?

Fundamentally, clients want great service and to work with a partner they can trust. I don’t believe this has ever changed. We really focus on communicating and doing everything we can to support our clients.

How we are delivering our services has evolved with the drive towards using technology to automate processes. In reality, we find that the data we require to process payroll usually comes from multiple sources, so it is difficult to fully automate.

Data security is also more important than ever. Following the introduction of GDPR in Europe, many countries in Asia are now issuing their own data protection acts using GDPR as a template. It is absolutely essential for clients that their company and employee data is handled correctly. A data breach could be catastrophic for all parties.

Finally, clients want their employees to have a great user experience, and whether that is providing a local language help desk or an employee self-service portal, we need to be ready to support them.

5. In your experience to what degree are companies establishing common Payroll/Accounting/HR back-office operations (e.g. shared service centers) in Asia versus running their back-offices decentralized at a country level?

It is very common to operate in Asia with shared back-office operations. This could be on a small scale with regional teams supporting the local business activities or on a much larger scale with shared service centres. It is a great way for an organization to work consistently, with control and oversight, and efficiently across multiple locations. The challenge comes from the significant differences in regulations, working practices, languages, and cultures in Asia. This is why we strongly believe that working with a partner like Mazars is so important. We help our clients focus on their core business whilst we handle the local compliance.

6. Tell us a bit about yourself. How did you end up in the role in which you are today? What do you like most about it?

I am a UK-qualified chartered accountant who moved to Asia in 2007. I head our outsourced accounting and payroll services for Mazars in Thailand and across Asia-Pacific. I particularly enjoy solving complex problems, finding new ways to support clients and building teams that work together across multiple countries.