The path to global payroll transformation

March 23, 2021 | David Daly 5 Mins read

Many multinational organizations are now choosing to employ a digital transformation officer or project lead, to spearhead a wider campaign of digital transformation across multiple departments. Sometimes, there is a clear plan in place while other times, companies will simply look to the individual they have given this task to and expect that person to come to the table with a lot of ideas as well as a clear road map on how to implement them. 

There is a good chance that digital transformation will have been discussed in broad terms and it is likely that there has been sufficient buy in from C-Suite leadership teams to green light business case financial investment and provide the necessary support.

This digital transformation officer may then be fortunate enough to have the financial support and resources made available to help them map out and create a project around digital transformation delivery. They will no doubt receive guidance around which departments to focus on first and which areas of the business will be most likely to contribute to overall company growth on the back of a significant digital transformation.

In this article, we will take a look at the ways in which a digital transformation officer could approach digitally transforming the global payroll function and some key areas that this person should focus on to ensure it is done in the right way.

Start with the why

An obvious question for sure, but you would be surprised that even in 2021, there are a number of organizations that tend to go full steam ahead into a digital transformation project without fully analyzing this question. Without the why, it is difficult to measure success and know what it is you are trying to achieve. At Payslip, we believe the why is relatively straightforward – the majority of global payroll departments are in need of a radical digital overhaul. The introduction of innovative digital tools as part of an integrated platform that is fully connected to HCM and finance systems is in our opinion, an essential component of effective global payroll delivery and management in 2021.

The reasons why to do it are clear and obvious:

Global payroll is complex and requires effective management.

Payroll data is not shareable, secure or easily transferred.

Multiple systems and vendors make visibility and control a challenge.

Manual process is and legacy technology need replacing.

Reporting is not consolidated, detailed or comprehensive enough.

New digital processes are required to manage compliance obligations.

The list goes on and on, but this should be enough for anyone to give a clear answer to the question ‘why are we doing this’?

Next examine the technology stack

The technology stack in place is unlikely to be fit for purpose or future proofed in anyway -that is why a digital transformation officer has been employed in the first place. What this person needs to focus on is what kind of technology stack needs to be in place for the continued and effective delivery of multi country global payroll.

The answer is a technology stack housed within a cloud environment, where data standardization and automation processes are part of the build. Information security and data protection meet the highest industry standards and the reporting tools are sophisticated and innovative enough so that actionable trends and insight can be extracted from complex multi country global payroll data.

We’re talking about an innovative digital platform with secure connections to HCM finance and other HR technology that facilitates the smooth and secure flow of data workflows between global payroll, finance and human resources functions.

This is a technology stack that is resilient, robust and reliable- capable of digitally transforming and dragging global payroll processes away from spreadsheets and towards seamless digitized workflows.

Global payroll automation is a must have

Automated processes are now becoming essential when handling high volume data associated with delivering global payroll across several countries and continents. Manual processes come with too much accuracy risk and are simply no longer acceptable to heavily burdened global payroll professionals who have more important things to focus on then manually entering and validating payroll data.

Automation immediately introduces speed and efficiency to the process while also removing risks around accuracy issues, thereby having the knock-on effect of immediately improving compliance and data security.

Think Global. Remember local

A key mistake to avoid with global payroll processing is to focus on some form of out of the box payroll solution that will enable global payroll delivery across multiple payroll countries at once. Many have tried and failed with this approach in the past -the nature of global payroll delivery is nuanced and essentially local. Every country is different, and this results in unique pay elements to this country as well as localized taxes, employment laws and benefit systems. There is no silver bullet -it is simply a case of thinking global but always remembering the crucial role that local country providers have to play in global payroll delivery.

A digital transformation officer should therefore be focused on applying a global framework that can facilitate local nuance. If you take this approach and align it with a digital mindset, where the focus is on technology doing the heavy lifting -then you have every chance of success. with this approach, digital technology takes care of the global while the flexibility element allows for local country nuance to be a part of the global delivery in a seamless and interconnected fashion.

Global payroll data standardization

Everything is simply easier when payroll data is in the same format across each of the payroll countries – data workflows are easier, data sharing is easier, onboarding new payroll providers is easier, extracting real-time reporting from this data is easier and developing standardized best practices for global payroll professionals located in different countries is easier.

Data standardization is about housing all of the global payroll data in one location and then standardizing it in a similar format. This way, digital standardization can be applied across multiple countries at once and global payroll gets delivered in a much faster, smarter and more effective way.  Data protection is also improved on payroll platforms featuring standardization as part of a new technology payroll process.

This also paves the way for scalability -one standardization is applied to the data in one country, it can quickly be rolled out to all of the other countries on the payroll and crucially, onboarding new countries, as a multinational expands into new territories, automatically becomes a smoother process because the data standardization groundwork has been done earlier as part of a digital transformation process.

The before and after picture

Sometimes measuring and articulating success is not quite as straightforward as it seems – digital transformation officers get help from a lot of people, implement a lot of change and genuinely transform a process so that it is almost unrecognizable to what existed before it.

An achievement like this should never go unnoticed – but sometimes people forget to arm themselves with a good old fashioned change management before and after picture. If you have this, you are in a much stronger position to describe the new process and changes in a way that is visual, digestible and impactful.

The before picture of global payroll will likely point to some of the shortcomings -it was likely slow, outdated, manual, process heavy and difficult. Filled with inadequate reporting, complex data flows and frustrated global payroll professionals and managers.

When a digital transformation process has been completed, the after picture should present the exact opposite and convey the following to C-suite leadership teams or anybody interested in the results:

 

It is important to measure and celebrate success with any change initiative- and you can really only tell how far you have come by taking a look back at your starting point. The role of a digital transformation officer is to introduce process improvement with a focus on digital technology that makes things better in the here and now while also future proofing a business-critical function so that it can help the business scale internationally and thrive for several years to come.

It is crucial to paint a picture and describe how digital platform technology completely transformed the old way of delivering global payroll. The global payroll professionals using the new digital tools will likely be the biggest advocates of the new digital process, describing with enthusiasm how their day to day lives are so much easier thanks to this level of digital innovation. This is the global payroll solution and business case justification in evidence with support from the payroll team.

Global payroll is an interconnected business function and when it is digitally transformed, it can have wide reaching benefits. Compliance officers, financial operations officers, CFOs, CIOs and other decision-makers are all likely to be in a position to witness the benefits of implementing such a digital transformation -especially when it comes to the new level of detailed reporting available to these key stakeholders.

A clear and coherent before and after picture will enable a digital transformation officer to explain why the business case for digital transformation was fully justified. The only question people will likely have is why did it take us so long?!

 

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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