Maritime Payroll and Payments Challenges (and how to address them)
Streamlining global payroll payments for a maritime workforce will never be a breeze. But here’s how to make it a whole lot easier.
Rivka Abramson| Jan 14, 2024
- Even as the maritime industry continues to grow, digital transformation is lagging – especially for workforce management.
- Lack of payment security, banking dysconnectivity, and remittance capabilities remain major challenges.
- Industry-focused solutions, local expertise, and tailored payroll payment capabilities are crucial for overcoming these obstacles.
Demand for maritime shipping seems to be endless, and the maritime industry is expected to grow further significantly in the coming years, according to 360 Research Reports.
Even so, the sector continues to be known for its lag in technological development. And this is not for lack of demand – in fact, 86% of maritime workers say they’d choose shipping companies with better digital capabilities. That is in line with the notion that the lack of digital transformation has affected maritime workforce management capabilities in the space.
Then there are the workforce challenges the maritime industry faces regardless of digitalization, whether it’s paying multiple nationalities, adapting to irregular working hours, managing complex crew rotations, or a slew of other difficulties.
In this blog post, we dive into some of the biggest challenges in the maritime payroll and workforce payments – and how to approach them.
Accessing banking services for maritime payroll
Many maritime workers are at sea for long periods, and traditional banks often lack the right technology to provide them with continuous access to banking services. For seafarers, this makes it challenging to manage a salary that isn’t cash-based.
Meanwhile, on the employer side, because multiple nationalities are usually involved in one maritime workforce, that means also working with various bank accounts in multiple countries. – making the execution and standardization of workforce payments much more challenging (not to mention trying to ensure these workers can access these accounts).
First, on the business side, it starts by adopting a payroll and payment solution or method that can turn local bank transfers into one centralized and standardized process, hopefully from one screen.
On top of that, it’s advised to ensure any such solution is licensed and regulated to keep your funds segregated and safeguarded – as many local payroll providers hold client money in their own regular business bank accounts, which poses serious financial risk.
On the worker side, the employer needs to make sure it leverages solutions that allow employees seamless, worldwide, and real-time access to their financial data, payslips, employment documents, and other important information they might need while away from shore/home.
Remittance needs and costs
Over 70% of maritime workers say one of the biggest struggles they face involves the extreme difficulty of sending money back home – especially for those with family located in remote areas.
Traversing international waters means workers have to deal with multiple currencies and different exchange rates to send money back home. The lengthy, convoluted, and often expensive process remains a heavy obstacle, and severely impacts employee experience in the maritime space.
The workforce payments solution for maritime payroll, should address the risks and pains of cross-currency volatility. This can be done by offering split, cash, and/or push-to-card payments, (in which case, the employer should enable workers to choose their preferred methods).
Additionally, the service’s fee structure should be transparent. This will help everyone involved avoid unnecessary costs rolling costs onto the workers (another main pain point for maritime companies in providing a positive employee experience).
Safety and security of maritime workforce earnings
Mostly due to the lack of banking connectivity (see above point), around 20% of maritime workers are still paid in cash, totalling around $10 billion globally. Paying cash is, of course, not the safest way to handle maritime workforce payments.
Meanwhile, even for businesses that do pay their workers via bank transfers or other means, security concerns remain in the form of data breaches and cyberattacks – especially when working with multiple banks/solutions, relying on manual data inputs, and transferring data in weakly secured methods.
Of course, the first part of the solution is to avoid cash-based compensation. With that said, since cash is a preference of many workers in the maritime industry because as a result of their mobile lifestyle, employers should be able to offer more secure methods that still provide the immediacy and flexibility that cash does.
As part of that, choosing a workforce management solution with robust security measures is a must to ensure your workforce funds are kept safe – from the moment you fund your dedicated accounts/virtual wallets to the moment they’re with your workers.
Shipping payroll compliance with international regulations
The maritime industry is subject to its own set of employment regulations – whether it’s due to irregular work schedules, hazard pay, onboard benefits, or wage garnishments across borders. What’s more, these are likely to differ from country to country.
Access to and direct support from local, boots-on-the-ground legal experts is crucial for navigating the often-nuanced regulations involved in maritime payroll and employment. Settling for payroll and workforce professionals not directly familiar with a country’s regulations can lead to costly mistakes and miscommunication. Additionally, local experts are often much better at keeping their fingers on the pulse of any regulatory changes.
A workforce solution provider that gives you both this level of expertise and the technology that automatically keeps your payroll and payments compliant may be the double-whammy you need.
Lack of tailored financial products for maritime payroll
Because the maritime industry has very specific needs, it is essential to tailor maritime payroll specifically for its workforce, and many workforce solutions aren’t equipped to offer these businesses the right level of flexibility or compliance expertise.
Here are just a few examples of factors that need to be considered:
- Adhering to collective bargaining agreements, which are extremely common in the maritime industry.
- Verifying certifications and training necessary for working in the shipping industry.
- Ensuring repartition and compensation in cases of illness, injury, or death.
- Providing onboard benefits, like housing, food allowance, and medical coverage.
- Handling court-ordered deductions across international borders.
Industry-focused expertise and support, and adaptable technology are crucial for ensuring a proper shipping payroll and payments strategy for your maritime workforce, whether it’s to do with customizable payroll rules, compliance mentoring, or integration with maritime-specific software.
Your maritime workforce strategy with Papaya Global
An end-to-end, expert-based payroll and payments strategy can be a game changer for a maritime company, from leveraging automated and integrated technology that standardizes and centralizes processes and data to local expertise — or, ideally, both.
Here’s the Papaya Global approach:
- ֹֹA dedicated, complaint workforce payment solution for your ENTIRE global workforce – transparent, with a “land date” guarantee.
- Centralized technology that allows you to streamline all your operations from a single platform – including all employment models (employees, contractors, or EOR workers.(
- Boots-on-the-ground experts in over 160 countries, guiding you through complex laws and regulations (including industry-specific).
- Employee-centric vision, from flexible payment options to employee portal and app.