Innovating Global Payroll – Introducing the new Global Payroll Model

February 5, 2020 | Yana Todorova 5 Mins read

Payroll services may have been resistant to change for a long time, but new market forces have emerged that mean change is inevitable. Things like the rapid scaling rate of companies into new countries and territories is resulting in a need for innovative thinking. Now there is more demand for a globally centralized payroll function which caters for multiple payroll providers or vendors in different countries. This function requires platform integrations and payroll solution software and this level of digital transformation will prove to be a wise investment. Many MNCs have already moved to a cloud HCM platform and are now looking at consolidating their global payroll onto a single platform. The ideal scenario that people are looking for is a common platform that integrates HR systems, international payroll and HCM. The capabilities that come with such a scenario are a genuine game changer for payroll operations in multinational companies around the world.

A new payroll model has emerged to challenge and disrupt the old way of doing things. This new model is a payroll technology designed to improve payroll services in 2 ways:

1. Make day to day international payroll tasks faster and more efficient

2. Provide value added insight, metrics and data to business leaders

Crucially, this new model manages to do both of these while also navigating some of the complexities associated with global payroll like country-specific tax regulations and local policies. This new model better positions payroll professionals to respond to the increasing demands being placed upon them when it comes to reporting and value-added functionality.


The traditional payroll model


Let’s begin by looking at some of the features of the model currently in use:

  • Aggregator vendor controlled the local payroll provider
  • MNC outsourced fully to the aggregator
  • Limited or zero transparency
  • Limited reporting functionality
  • Expensive manual process

This model works fine on certain levels but some shortcomings surface when companies are required to expand rapidly. MNC’s have limited visibility of overall payroll costs and reporting. The manual process can increase the risk of data errors.  The model was not designed to create the kind of customized reporting or business insights needed by companies today. Payroll teams sometimes feel a bit stifled, their time dominated by day to day processes and are not in a position to respond to outside requests for key data and reporting. In an agile, digital economy, such a model is unsustainable as leadership teams require quick and reliable information to make swift business decisions. These leadership teams are also demanding when it comes to individual departments – they now expect specific departments to develop into strategic business partners as well as delivering day-to-day functions. An updated global payroll model is necessary to meet these demands. And payroll professionals need access to technology solutions that will help.


A new way of thinking


A new model has emerged. It is technology driven, transparent and designed to provide payroll teams with the tools they need to do their jobs better. It involves software that can integrate easily with vendors and aggregators. This software also integrates with HR, HCM and finance systems. This model helps to automate any repeat processes. It also involves data standardization allowing payroll teams to receive data from multiple parties in a single, standardized format. This data can then be used to create a variety of reports that provide much needed visibility and governance around the entire payroll process.

The landscape is changing and MNCs everywhere need to respond to increased expectations and new demands when it comes to payroll processing and data.  Gartner have recognised this new trend and have responded by creating a new category for payroll software in their recent guide to multi-country payroll solutions. ¹

The fact that Gartner have created a new category for payroll software solution speaks volumes about the need for innovative, digital solutions in payroll processing and management.

New options are appearing on the market that point the way to a more sustainable process and many MNCs are choosing to adopt new solutions which align better with their growth ambitions. The new model does not mean a shock to the system, it is more about helping payroll make the current process better and faster. And also introduce some added capabilities which make it a very worthwhile investment. Many payroll services professionals view this as a necessary expenditure rather than a luxury.  In fact, this new model is rapidly becoming the model of choice for progressive companies.


Compliance and legislation factors


Companies want to chase opportunities and new revenue streams by expanding globally. This brings with a range of new compliance and regulation obligations, and many are unprepared for the complex ecosystem of mandatory data that awaits them. This only increases the need for standardization and digital advancement- more to do means better tools are needed to get it all done. Governments in many countries now demand greater transparency around data and regulatory compliance- easily accessible digital proof is what they want to see.


A model to transform global payroll has arrived


This new thinking has resulted in a new technology driven model that is soon likely to be the gold standard in global payroll management. There are many benefits for payroll teams, vendors, employees, human resources and leadership teams.

  • Time saving automation and process improvement
  • Standardized data
  • Visibility, control and governance of end to end process
  • Improved reporting metrics and insight
  • Empowered payroll teams and company employees
  • Data security and compliance

This model is built for 2020 and beyond. Modern, flexible and innovative- it responds to a number of current global payroll needs while also being adaptable for future payroll trends. It also aligns better to current technology trends being embraced by global businesses everywhere. In fact, those who do not adopt the new model risk being left behind as effective business scaling is hindered by the old model.  The new model has particular appeal for multinational companies with employees across several geographies and countries. These companies often experience issues around data and country-specific regulations. They are keen to learn about any kind of technology that can streamline the process and improve the speed in which new employees are onboarded in different regions of the world.

The new model is being adopted by forward-thinking MNC’s who are looking to respond to new trends while future proofing their global payroll process. They are recognising the value that comes with transforming their payroll services function into a multi-purpose business enabler. This attitude is vital to any business with aspirations to expand into new countries in an effective way. Expansion can happen a lot quicker when supported by a modern, flexible and robust payroll operation. New employees can get to work quickly instead of having their time consumed by a complex on boarding process that is limited by the legacy software of several different payroll providers.  Payroll professionals are empowered by having control and visibility over payroll operations. And business leaders have quick access to crucial data and business intelligence information. The new global payroll model is for all companies willing to embrace new technology and combine this with an attitude that recognizes the importance, value and benefits of a fully supported payroll services function.

The Payslip platform is an example of this new model and features all of the functionality outlined above. Talk to us today to find out how you can move across to a new global payroll model using our payroll technology.

¹Gartner, Inc. “Market Guide for Multicountry Payroll Solutions,” by Ranadip Chandra, Ron Hanscome, Sam Grinter, John Kostoulas, Amanda Grainger, 18 June 2019
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.


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Using Payslip, we can manage all our payrolls across nine in-country vendors on one platform. When the global Covid-19 pandemic arose, it was not an issue from a payroll perspective, and critically getting everyone paid. The Payslip platform enabled continuity for our international payroll service including the fast and seamless implementation of the Payslip Employment Self Service during this time.

Colin Smith

Payroll Manager, LogMeIn

With business and employee growth rates of above 50%, we rely on our vendors to deliver on time, every time. Payslip’s workflow automation, enables Phorest to manage our payroll provider process – data driven, real time and transparent. Payslip saves us time so we can focus on our business growth.

Ana Kelly

International Payroll Manager, Phorest