Return to high season buildup of overseas staff will create ‘needless payroll bottleneck’ for travel – Nium
- Spencer Hanlon, from leader in real-time global payments Nium, warns travel companies not to let the high season spike in overseas staff turn into an expensive headache this year
As the high season is now upon us, travel companies of all kinds are bolstering their teams with employees. With more work-from-anywhere and work-from-home employment policies than ever before in our sector, many of these new employees are going to be based overseas. Could paying them all be more of a headache than many anticipated?
Speaking at the Bavel Travel Summit in Barcelona – organized by Voxel Group – Spencer Hanlon, from the leader in real-time global payments Nium, comments: “Many companies have now begun to feel brave and venture into new markets – or return to old ones they withdrew from – and that means employing and then paying new overseas staff.
“But often the locations these employees are based in will have a unique payments landscape and currency for businesses to navigate, which can increase costs – especially when talking about individual sums that aren’t so large. The forex fees for paying someone in Bali, the Philippines, or Turkey, for example, might add another 10% to their total salary cost.
“Then there’s the headache and time consumed by the exchange rate risk. Yes, had you considered that as the exchange rate fluctuates, the cost of that salary could be suddenly half or double what you originally budgeted for in your currency?
“Meanwhile, if there’s one rule about paying your staff that’s nearly as important as paying them the right amount, it is paying them on time: lots of people time their rent payments and other monthly bills to come out the day after they get paid. Get it wrong once, and you face a lot of complaints, get it wrong twice, and people resign.
“In other words, overseas staff payroll can get exponentially more complicated very quickly. On that basis, we at Nium predict that there is going to be a whole load of needless payroll bottlenecks going on.”
So how should travel companies venturing into employing overseas staff respond to this challenge?
Nium recommends that, if you’re currently still relying on traditional bank transfers to make this happen, then you’re almost certainly going wrong. Firstly, because of slow wire transfers via SWIFT, but also because this method is very expensive when you consider all of the associated costs, including hidden ones, like poor exchange rates. Plus, you can never be sure if the person receiving the transfer will receive the exact required amount in their local currency, meaning if they don’t, you have to do yet another.
Instead, you need a global payments partner who offers you a platform service that includes multicurrency solutions, low exchange rate charges, and the ability to lock-in exchange rates in advance. Plus, you’re going to need transparency on the tracking of monies sent and controls on who can and can’t send what to where and when, in order to avoid fraud, reputational damage, and loss of trust.
Nium provides global payment solutions for some of the world’s largest airlines and online travel agencies. Recently, it has enhanced its payroll solution – including end-to-end FX controls, beneficiary pre-screen and confirmation of payee, scheduled payouts, and direct debits in the US, UK and EU – to support the complex needs of these businesses and payroll platforms worldwide.
Needless to say, everything outlined above is looking solely at the challenge of paying staff. The same applies to paying your suppliers, contractors, and other businesses, too. Whilst all of this might sound like an additional headache just as the high season is about to kick-off, the good news is that these recommendations can be introduced very quickly and with relative ease. Hanlon sums up: “As the global travel industry continues to open up, the ability to hire and scale across borders will become a key differentiator for many. In today’s climate, there’s no excuse for payroll mishaps. Do the right thing now and make sure you’re ready to capitalise on the travel boom this summer.”