Stakeholder Value: How global payroll delivers value to multiple stakeholders: HR/Finance/Employees/Leaders

March 8, 2023 | 5 Mins David Daly

The global payroll department is often undervalued and underappreciated-this is largely due to a lack of understanding of exactly what it takes to ensure that a globally dispersed workforce is paid accurately and on time every month.

Global payroll teams and professionals have a tendency to be very diligent and conscientious when it comes to ensuring that people get their wages and salaries. They work to extremely tight deadlines and in a pressurized work environment, and yet payroll failure is still a relatively rare occurrence.

Payroll delivery is part of the core underlying contract between global employer and employee-it remains a crucial part of any business environment. Payroll teams have a tendency to go quietly about their day-to-day payroll process business-this is one of the reasons why it is often the case that little is known about the inner workings of a payroll department.

In this article, we are going to outline some of the ways in which global payroll delivers value to multiple key stakeholders across a multinational organization. Global payroll operations, service delivery, data and reporting can have a wide-reaching impact in a global organization. It is therefore in the interest of all global employees to ensure that this business-critical unit operates in the most efficient manner possible.

HR and global payroll

Human resources and global payroll are two interconnected and related departments. The biggest reason for this is connected data flows- HR need payroll related data to do their jobs effectively and payroll require information from the HR department to accurately calculate, process and deliver international payroll

to global employees every pay period.

The data that each department holds needs to be shared in a seamless and automated fashion between the two functions. There are two reasons for this: one is that the human capital management (HCM) system within the HR department needs to be the single source of truth for human resources data in the organization-and the global payroll software and data repository needs to be a single source of truth for payroll related data in the organization.

Secondly, for reporting to be comprehensive and able to offer key business insights to stakeholder groups -it will require data from both departments. HR reporting cannot be truly comprehensive without payroll related data such as taxes, social security, pension contributions, healthcare deductions, bonus, overtime and other pay element data.

At the same time, global payroll reporting requires information from the HR team to be truly accurate also-joiners and leavers reports and global workforce headcount data require information from the HR team and HCM system to be fully accurate and reflective of what is actually happening with personnel inside the organization.

Finance and global payroll

It should not come as a big surprise that global payroll is often the single biggest cost within any global organization. This is obviously something senior leaders in a finance team would want to have on a regular basis and therefore will require real- time data and up-to-the-minute payroll operations figures.

Some of data and reporting will be needed for mandatory reporting and compliance obligations. Other reports will simply be of interest to the finance team, especially when it comes to cash flow predictions and forecasts of future labor costs in specific countries, regions and geographies.

The production of a General Ledger report at the end of each payroll is another essential report that the finance team will require at the end of every single pay period. This report contains crucial data and payroll information that the finance team usually need as soon as possible- if payroll is outsourced to a third party it can usually take a long time for the finance team to get this information and this is not a satisfactory situation.

It is far more attractive to be able to instantly produce this report via innovative digital reporting tools found on a global payroll technology stack such as a global payroll control platform-this would offer finance professionals the ability to generate general ledger reporting on a self-serve basis at any time they want.

Finance teams and the office of the CFO will always be interested in real-time global payroll reporting, that is readily accessible from their global payroll function. The data, insights, metrics and trending information that can be found in multicountry consolidated global payroll reporting is essential for informed decision making.

Employees and global payroll

Apart from the obvious employer obligation of pay the workforce accurately and on time every month-payroll has a role to play in the employee experience, especially if payroll is digitized and innovative.

It is a hugely competitive recruitment and retention environment out there-talk to any human resources professional and they will confirm this. Skilled and qualified candidates around the world today have more choice than ever before when it comes to accepting a offer of a job. With hybrid working and remote working the new normal, location is no longer a factor so candidates can select global employers from around the world.

These candidates bring with them a set of expectations around digital efficiency and innovation-stemming largely from their personal life and the quality of the digital experience they get when it comes to things like mobile banking applications add instant access to the information they need online.

If global payroll departments can offer global employees an employee self-service module-where they can access their payroll related information, payslips and year-end tax information, 24/7 in any location and on any device- this would be a positive experience that employees are likely to value. Every employee wants to feel like they are working for an innovative and digitally advanced organization, and no employee in 2023 really wants to send off an e-mail to HR and have to wait several days to access a historic payslip.

Candidates often receive more than a single job offer-and are therefore looking for distinct digital qualities in their new employer-an employee self-service module in a payroll system could be an attractive differentiator and this is another scenario in which the global payroll department can add value to the wider business organization beyond the calculation and delivery of payroll.

Business leaders and global payroll

In a post pandemic world, it is a much-changed business landscape-in many ways, things have simply become harder and more competitive in the business environment.

Business leaders need to make more decisions than ever before, and they often have to pivot quickly and take their business in a new direction. Payroll information in the form of reporting on labor costs across countries and the makeup of the workforce are becoming essential and hugely in demand data requests. Compliance, tax and regulatory obligations need to be met and global payroll reporting and audit trail reporting can have a key role to play in confirming if a company is fully up to date with all of its obligations in these areas.

A global payroll department or payroll manager who can supply data and reporting up the chain to the C-Suite executive team and business leaders has the opportunity to become more than an administrative function-they can evolve into a strategic business partner who can provide essential information for informed decision making at the highest level of business.

Business leaders will always want to know about labor costs-they will require country by country reporting, as well as regional and global view reporting. Next they are increasingly demanding the ability to drill down into specific pay elements that reveal the bigger picture behind the data. Comparative payroll costs across country as well as predictive analysis and cost forecasting can help them make cash flow related decisions while they can also look into regions where it may be more financially advantageous to hire. This is massively valuable information for leadership teams to have at their fingertips.

 

 

For more information about our Global Payroll Control Platform contact us today.

 

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