A multi-vendor payroll strategy requires a tech platform
This week we’re going to examine another interesting result from our recent survey where hundreds of global payroll professionals provided some great insight into some of the current issues occupying their minds as we approach the end of a busy global payroll year.
The results threw up some revealing insights and in this article, we are going to take a closer look at one of them. Multi-vendor management is an important part of multi country global payroll delivery at organizations everywhere. Global payroll is complex and nuanced and more importantly, it is very country specific. Each country has its own laws and regulations, so far global employers to remain compliant, they will almost always have to engage with a local country expert when managing payroll delivery in that country.
The result of this, is that organizations usually need several local country payroll vendors to help them deliver payroll in the local countries in which they operate. Multi-vendor operations are therefore very common, what is much less common is a clear business strategy and an understanding of the best way to manage them.
In this article, we will explain why a global payroll technology platform is needed more than ever to help execute a multi-vendor strategy and ensure that global companies can manage global payroll operations with visibility and control.
Local expertise will always be needed
It is always best to plan ahead while accepting realities-global payroll can never be delivered in isolation, there is no quick fix, or one stop shop or a piece of technology that will enable you to deliver it perfectly in each country you operate in.
It is simply too complex and nuanced for this-compliance is a major factor and local labor laws and legislations need to be followed and adhered to in order to ensure you are fully compliant in your global payroll delivery. There are other nuances to be factored into-and these local nuances, such as a church tax in Germany for example, will require the mapping and classification of very specific pay elements, unique to the country.
All of this makes global payroll specific and nuanced-every company has growth and scaling ambitions-everybody wants growth efficiency, and this means moving with speed and agility into new countries to take advantage of opportunities and create new revenue streams. This in turn will mean a need to establish important business relationships with local country payroll providers. After all, moving into a new territory means hiring new people and paying them accurately and in a legal and compliant manner. Local country payroll expertise is needed to make sure this happens.
What tends to happen over time is that organizations who grow rapidly find themselves with a growing list of countries and local payroll providers that need to be managed. Things can get complicated very quickly with multiple different payroll systems in play and multiple different payroll dataflows moving across the organization. Visibility, control and compliance become, very difficult to manage-many organizations therefore find themselves in a position with multiple vendors in their network, but no clear strategy or technology stack to manage them efficiently.
The consequences of this are as you would expect-limited visibility, poor reporting & data analytics, lack of control, disconnected systems, disparate data flows and major data security and compliance risks. this is all becoming increasingly more common as organizations move forward with enthusiasm in their scaling ambitions and fail to realize that a global payroll technology platform to manage all these vendors is needed and actually, it is foundational for the growth efficiency they desire.
Take back control with technology
Global employers can attempt to move forward without a global payroll technology platform if they want to-but this will mean that the problems down the line are simply waiting for them. They will have no technology platform in place to manage these multiple vendors that they want or need to engage with, they will have little or no control over them and there will be major visibility issues when it comes to actually seeing what is happening with a specific payroll in a specific country.
It can be done, but it will take heroic efforts from an increasingly frustrated and jaded global payroll team. It is much more advisable to consider a technology solution to this level of multi-vendor management. Making a decision to manage it all on a global payroll technology platform that is foundational to growth, is a wise and ultimately 100% necessary investment.
Without it, you run the risk of flying blind with no visibility or control, and all of your data will definitely end up trapped and hidden across multiple different disparate systems. You will be unable to respond to C-suite reporting requests around labor costs in a specific country or comparisons across countries. These real-time reports are needed for cost management control and true business insights, they will definitely be in demand and global payroll managers will be expected to respond with detailed and insightful reporting that informs decision making at the highest level. Currently, payroll services contains the data but most multinationals don’t have the means to extract and deliver this data as meaningful reporting in real-time.
Right now, global payroll managers are painfully aware that they are unable to produce this level of reporting and are unable to obtain the necessary control over their multi country payroll. This is because their current legacy technology was not designed to manage payroll in this way or handle such a large volume of vendors and data. Alternatively, the organization as a whole may have chosen to adopt a services aggregator model and it has now become clear that this model was not designed to handle this level of complexity or deliver the reporting requirements that are needed today.
So, they are on the lookout for innovative technology that can go further and deliver better. By this, they mean a technology platform that can help them see, manage and control multiple different countries from a single platform, while also giving them both high level and detailed reporting at the touch of a button. This is a digital transformation of the payroll services eco system by leveraging new technology to better manage the multi-vendor marketplace and meet critical business needs
Crucially, they also want to be able to introduce a standardized process which can be duplicated across new countries in a quick and easy manner. With something like this in place, they immediately become growth ready and on boarding new countries simply becomes a matter of following a standardization playbook with whatever new country they wish to enter into. This is growth efficiency; this is where they want to get to and only a technology platform designed specifically for multi country global payroll management can get them there.
Payslip for multivendor payroll management
Payslip fully understand the reasons why global employers need a management strategy for the multiple vendors they are using across their local countries. We designed our platform with global payroll operations in mind because we want to provide a simple solution that helps global employers manage their multivendor network with visibility and control.
We also want to ensure that global employers maintain freedom of choice when it comes to selecting the local country vendors they want to work with. Under the services aggregator model, they are tied to the contracted local country vendors within the aggregator’s network- this is often a source of frustration for global employers who either want to select their own providers or use providers who they have already developed a positive working relationship with. Payslip’s global payroll control platform is provider agnostic-you can select any provider you wish to work with and onboard them quickly onto our platform in a number of days.
The digital tools inside our platform also enable global employers to monitor the performance of any vendor they choose to work with e.g., SLA monitoring. If at any point, the global employer is unhappy with vendor performance and wants to swap in a new provider, once again they can do this in a matter of days such is the flexibility of our platform.
Digital audit trails and smart reporting tools on the platform also help global employers expand without risk i.e., they can grow in a fully compliant manner. These audit trails can document and account for what payroll data was collected, who has access to it, what they did with it and when. This is really the only way to fully prove compliance on both the local and global level, and these days, if you cannot grow in a compliant manner, then you cannot grow at all.
The automation and machine learning feature of our platform also serves to power up local country vendors so that they can deliver their services with greater efficiency to the global employer. Payslip cuts out manual processes; seamlessly integrates and shares employer personnel data with the local country payroll provider’s system, automatically ingesting and validating the provider’s gross-to-net calculations and tax calculations. Everything is faster and more efficient on both sides because both global employer and local country provider are operating from the same platform. Talk to our team today about a payroll provider management strategy you can trust on a technology platform built for global payroll.
For information on the Payslip Platform contact us today.