The value of a global first data model in payroll
May 18, 2023 | 5 Mins
David Daly
The beginning of a new year is often a time for global payroll leaders and professionals to take stock and examine their internal and external processes for delivering and managing global payroll.
For many, their day-to-day global payroll processes are filled with a range of challenges that is causing them to stop and re-think their entire approach. At many multinational companies around the world, what they currently have in place for their global payroll models is not working for present day international payroll delivery and neither is it sustainable for future growth.
Multinationals have grown and scaled hugely in the last decade, and many have found that their process for delivering and managing payroll is no longer fit for purpose in terms of the way they are currently doing business. They need to go back to basics and re-examine the initial question of āwhat kind of global payroll model do we need to operate for maximum efficiencyā.
In this article, we will look at the reasons why any global payroll solution should really begin with the data modeling techniques. Data underpins most business needs- if you set information systems up so that the data is easily accessible, flows seamlessly between connected systems and is easily extractable for comprehensive and detailed reporting, then you will find yourself with a strong and fully sustainable global payroll delivery and management process.
Start with the data
The data modeling process is core to the vast majority of business-critical service deliveries at multinational companies. It is even more central to global payroll as the process relies heavily on the accuracy of both personal payroll information data as well as figure & calculations.
Payroll is local by nature and unique to each individual country-every country will have a different set of requirements when it comes to the data needed for global payroll- different taxes, labor regulations, benefits, annual leave entitlements-the list goes on.
But when a multinational already has several different payroll countries on its books, and also has significant plans to expand into new countries and territories- you then find yourself with a data pile up and a data management challenge. While you will accept that unique data is required for each country payroll, you also need an overarching global data framework to tie it all together. Without this physical data framework, you will be flying blind, and the data will be trapped- visibility and control will be beyond your reach and data related problems will become commonplace and very time consuming.
Take a global first approach
This involves standardizing your data globally and creating a unified global first approach to data management. It also involves creating a process where a global first approach to data is implemented but crucially, it also accommodates local country data nuance. With this kind of logical data model, the local country data works inside a global first approach, enabling global payroll managers and business leaders inside the multinational to see the bigger picture-the local and the global.
āPayslip helps us keep our output reports in similar formats, across regions, and this makes it a lot easier when you're trying to analyze and drill down into specific detailsā
Ronan Conlon, Finance Operations Manager, AMCS Group
A global first data approach is also about introducing best practices and developing a single way of working with data across both the payroll function and the entire network of your payroll countries & payroll operations. It is about harmonizing the global payroll process and creating a global first methodology that brings in the payroll data (in real-time) that is different in each country and then categorizing and standardizing it all in a global template.
This makes your multicounty payroll data comparable and helps leaders make decisions based on payroll data. Most companies struggle to tell the true cost of employing an individual because the data is trapped in management systems in another country. Global first means one data set for an entire company and this changes everything.
Global first data means bigger picture insights
The core reason for all of this is really about visibility and control. This is a major challenge at multinational companies everywhere. Global payroll professionals tell us all the time that what they really struggle with is seeing exactly what is going on across all of their payroll countries.
They have the data, but it is not standardized and categorized globally- it is also put together manually in most cases, and it arrives from multiple different disparate systems- HR systems and local country provider systems.
A global first approach helps to bring all of the unique pay elements into one platform and standardize the data at a global level so that payroll professionals have full visibility over what is happening on a daily basis across each of their payroll countries.
āBuilding out pay element codes helped build the infrastructure for global reporting and created a process for how we globally approach pay codesā
Hannah Huneidi, Cloudera
It also lays the foundation for detailed, comprehensive and consolidated global payroll reporting. This provides C-suite and business leaders with the bigger picture insights they need for informed decision making-simply put, it allows them to read the story behind the payroll data -right now, this is really not possible at most organizations because the payroll process is not underpinned by a global first data approach.
When the data is standardized at a global level, the reporting available in and across countries is really extensive and you can gain immediate insight into global payroll data via country region or employee–allowing you to compare costs trends and variances across all the global payroll countries.
This level of reporting can reveal indirect employer costs or compliance overhead issues related to a specific country-this is vital for foreign direct investment decision making. This is hugely valuable information to have, and we are seeing it being demanded more and more. This is what we mean by bigger picture insights, reporting that can tell you what is happening and allow leaders to move the business in a specific new direction if they want to.
A global first approach requires integrations
As mentioned, global payroll data needs to flow from multiple different payroll technology sources- HCMs, local country service providers and financial accounting software. Any global first approach to this data is going to require integrated digital solutions to ensure smooth and seamless data flows to and from any department that is connected to global payroll delivery.
HR system and HCM data flows need to be seamless and preferably automated. Local country providers need to take advantage of innovative digital platform technology that helps them receive and transport sensitive global payroll data easily and efficiently.
Digital integrations are required to make this a reality. the best option is it global payroll control platform which can integrate with HR, local vendors and finance for seamless and accurate bi-directional data flows. First, you categorize and standardize the data on a global level, then you leverage digital technologies for smooth integrations that enabled this data to flow quickly where it needs to be.
Payslip and Global First
Global first is core to the entire design of our global payroll control platform. We understand the crucial role that data plays in global payroll delivery and management, so we start there. We standardize and categorize all pay elements globally but also have the flexibility to create unlimited local country pay elements. This way, our clients can operate a global framework that, also accommodates the level of local country nuance they need to process their payrolls in a smart and efficient manner.
Our platform integrates seamlessly with HCMs like Workday plus financial software and local country vendors. We tie all 3 together for smooth and accurate bidirectional data flows. All of this can be managed on one platform with a single interface which enables our clients to view, manage and control their internal and external payroll processes.
We standardize the data and automate the workflows so that we can introduce zero-touch innovation. This reduces the manual work involved in managing and processing global payroll every month – integrated and automated data flows from HCM systems, securely transported across to the payroll providers and then back into our platform-this is zero-touch in action-the data goes through several layers of checking and validation via robotic process automation to ensure it is fully correct before being imported back into our global payroll control platform.Ā Once back in our system, automated alerts are sent out to the global payroll professionals stating that it is available for review and analysis.
When onboarding a client, our objective is to install a global first data process that enables them to digitize their own payroll process and improve it via standardization across countries. We show them how to digitize their process on the workflow, we explain our global data model and show them the power of our reporting tools and help them set up the countries on their system in as little as 2 days. They quickly become digitized, agile and efficient. Once the data first foundations are in place, it becomes easy to duplicate this conceptual data model across any new countries that they scale into-so they are growth ready and working with a data first global payroll process that is ready to support scaling objectives.
For more information about how our Global Payroll Control Platform integrates with local payroll providers in China, contact us today.
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