Multi-vendor payroll strategies require a technology solution

June 2, 2021 | David Daly 5 Mins read

Multi-country global payroll is a busy landscape and often features a crowded selection of local payroll provider vendors to choose from. Multinational organizations are rarely fortunate enough to work with a single provider or aggregator who can cover all of their payroll countries with one payroll system.

Many companies move at speed when scaling and growing into new territories, therefore the country network coverage needed in terms of global payroll is something that naturally expands as their business grows.  Some companies choose to work with aggregators, who use their network of local country providers to process payroll on behalf of the global employer. In such a case, the global employer is restricted to the number of providers in this network and the countries they operate in.  It is a quite common occurrence for a global employer to scale into a country that is not covered by their aggregator model- and therefore they have to look outside of this model for an alternative payroll provider in the new country to do the payroll processing.

The result of all of this is something of a hybrid delivery model- where a global employer has a selection of their countries managed by their outsourced aggregator, but they also have to engage with local country providers separately for some unique countries that they have entered into due to scaling activity.

Unsurprisingly, things can get a little complicated and global payroll operational efficiency can be difficult to achieve- in this article, we will discuss the reasons why global employers who find themselves in this position require a technology solution that is specifically designed to manage these kinds of complexities associated with payroll delivery across multiple countries.

Manage it with tech

There are many valid reasons to pursue a multi-vendor global payroll strategy- your company may have a strong need to locate a range of different employees in very different countries- this can range from the strategic positioning of a shared services center in a large city center location all the way across to the sporadic and varied locating of localized sales teams or in-house specialist individuals.

Regardless of the reasons why- the reality is unchanged- you have a global workforce, spread across multiple countries and continents, containing employees who need to be paid on time and accurately every month. To make this a reality, you may very well choose to adopt a multi-vendor payroll strategy which includes a number of different outsourced payroll vendors at a local level to cover all the payroll countries needed to pay your international workforce.

Local expertise is always needed for the efficient processing of global payroll- local vendors will be experts on specific compliance regulations that will be unique to that individual country- they help employers meet global compliance commitments. There may also be a requirement for country specific compensation and benefits packages so this is another reason to engage with local vendors. Challenges arise when the number of vendors grows as the company scales, the landscape becomes crowded and there is a need for management, clear visibility and control.

A technology solution to manage this process is always a good idea- your provider network can ensure that the employees are paid on time and accurately but there are a number of other important considerations around global payroll that need attention. These considerations are the reasons why global payroll operations need to be managed with an innovative technology stack that is capable of meeting capacity demands while also proving to be a solution to a range of complex challenges associated with multi country global payroll delivery and workforce management. Let’s take I look at a few areas where a global payroll technology solution is needed

Introduce speed and efficiency

Managing multiple vendors, all of whom use different technology stacks to deliver global payroll, can be challenging and a key reason why a technology platform designed specifically to manage complex multi country global payroll is a good idea.

Challenges around operational efficiency can always benefit from the introduction of speed and efficiency to the global payroll process. A global payroll technology stack can make this happen via robotic process automation.

Slow, cumbersome and time-consuming manual entry and validation is replaced with rapid machine learning where thousands of global payroll data entries can be uploaded, checked and validated in seconds. Operations immediately become quicker, and they also become more accurate as the likelihood of human error is removed from the process. Valuable time is freed up, allowing global payroll professionals in the central payroll function to dedicate their time and resources to higher priority tasks.

Data standardization is a game changer

Multiple vendors mean multiple different data workflows arriving from disparate systems at a range of different times. This leads to data management and payroll technology headaches and also makes coherent data analysis and consolidated reporting very difficult to achieve.

A global payroll technology platform can be utilized to immediately standardize all of the data across all of your payroll countries. This means your global payroll professionals are working with standardized data and processes- so immediate operational efficiencies can happen.

This standardized data makes validating pay runs a lot easier, you can also spot errors or anomalies a lot quicker when the same data structure is used for each payroll in each country.

And crucially, standardized global payroll data paves the way from multi country comparative reporting- it has become increasingly important for senior leadership figures to be able to compare payroll costs across multiple different countries on a like for like basis.

Foundations for essential reporting

When you introduce the operational efficiencies via automation and standardized data, you are also laying the foundations for better data reporting and insight. A global payroll technology stack featuring an innovative range of tools designed specifically for reporting can make a major difference when it comes to insight and analysis.

This insight and analysis are now in high demand, as payroll cost reporting has become an essential part of overall cost management and business strategy initiatives relating to the fallout from the global pandemic.

The global payroll department needs to be able to generate and customize multi country cost comparative reporting across all of their countries. Payroll professionals also need to be able to filter and drill down into payroll data reporting via pay elements such as position, country, entity and gender. These reports will form part of a management solution involving cost savings and workforce management.

C-Suite leadership teams are expecting to see this data in real-time, readily available in a helpful and digestible format. It is no longer acceptable in 2021 to have to state that the technology stack in place does not support multi-country consolidated reporting. Technology solutions for self-service payroll reporting are becoming a mandatory requirement.

The issue of compliance

In general, compliance is never easy to manage- but the fallout from the global pandemic means that the nature of work and the future of the office is in doubt- more and more employees will either be employed remotely or will seek the flexibility to deliver services from their home country.

There are massive implications for international global compliance as well as tax and employment law. The need for a technology solution to monitor and prove global payroll compliance is more urgent than ever.

Digital technology as part of a global payroll technology stack can offer clear and transparent digital audit trails around global payroll data. This means that organizations can quickly become capable of proving what data was entered, which authorized users entered the data, how they changed it, when and for what reason. It is this kind of unequivocal, transparent information that is needed to fully prove compliance in specific individual countries as well as on a global level.

Scaling ambitions

It is important that any multi- vendor global payroll model proves to be an enabler to business growth and scaling instead of a blocker. Without a technology stack that manages all payroll vendors from a single location, it can be very difficult to onboard new countries and move with speed and agility.

Speed and agility are required to ensure that a global payroll department is capable of keeping pace with the strategic goals of the wider organization. If leadership teams demand quick movement to carve out market share in new countries and territories, they will need a technology stack that can support the quick onboarding and paying of new employees in these countries they wish to operate in.

A powerful global payroll technology platform that is designed specifically to meet the challenges of global payroll can be a very useful ally when it comes to scaling at pace.  Automated processes immediately generate speed and standardized data across countries allows for the easy duplication and onboarding of new countries. This is speed and agility in practice and enables global payroll managers to confirm to senior C-Suite leadership figures, that they’re ready to facilitate scaling into new territories and markets.

The other side of this of course is that when you do move into new countries, you may require specialized local vendors to help you pay new employees. This means a growing list of additional local vendors to be managed- all the more reason to deploy a global payroll technology stack capable of providing this management.

 

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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

Payslip as a technology platform has added a missing piece in our payroll set-up. As an international company with offices in 16 countries, it’s important to us that every employee at GetYourGuide has the same great experience when accessing their pay data.

At the same time, we work well with smaller local payroll providers, supporting us with direct local expertise in their countries. We were able to combine those two elements by placing the Payslip platform in the middle, to simplify reporting and communication with local providers, and to have one simple employee-facing solution across all locations.

Julian Fichter

Head of HR, GetYourGuide

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