A new dawn for global payroll operations

Last week, we ran a webinar on how global payroll is entering a new era of hybrid service models being managed with technology. You can view a recording here.

This new dawn for the industry stems from a recognition of the reality that there is no single services solution out there in the market so multinational companies around the world will need to manage their payroll using a mix of models and multiple local vendors.

Mary Holland (CPP), CCO hosted the webinar and was joined by 2 guests from our client Cloudera: David Nugent, Director, International Payroll and Hannah Huneidi CPP, Payroll Manager.

Myths V Reality

Mary opened the webinar with the discussion around some of the myths out there in the industry around global payroll. It’s an important thing to highlight, because believing these myths can send you on a journey you don't want to be on. The first myth is the silver bullet scenario-that a single provider exists out there who can cover all of your payroll countries and handle all of your requirements.

Sounds too good to be true right, that's because it is--it is not true and no such provider exists in reality, despite what some of you may have heard on sales calls! The new dawn for global payroll is really about embracing the reality of the hybrid model: in this scenario, multiple service models and several local country payroll providers are involved in your payroll delivery.

It makes sense when you think about it-you might be with an aggregator, but it is simply not possible for them to cover all of your payroll countries-if you are a large organization you will inevitably have long tail countries i.e., countries with a relatively small number of staff to pay. You should be wary of any aggregator who claims that they can cover all of your countries- they simply go out and engage with local providers so it would be better for you to do this yourself and maintain choice and control over the people who are delivering payroll for your employee base.

The hybrid model makes complete sense because payroll is always local, and you can’t change a country’s laws. You can pick which payroll provider you want to work with and leverage technology to manage your framework for global payroll operations.

The industry analysts are all recognizing that the hybrid model is the new dawn for global payroll. The message appears to be sinking in on a global level too as we ran a poll during the webinar and found that 64% of attendees viewed the hybrid model as an efficient way to deliver global payroll.

Another myth is the need to reduce or consolidate your local country vendors into a small manageable number. This is not really feasible; you simply need as many local vendors as you need to get payroll done-there are no shortcuts. In reality, what you need to consolidate is the data coming from these vendors and the ideal scenario is to consolidate it into a single platform for centralized management.

It’s not too many vendors, it’s how you manage them and especially, how you manage them using technology.

Applying structure and control around your payroll

Mary then moved to the important topic of structure and control over your payroll after you have embraced the hybrid delivery model. Here is what we mean:

• Choice and control of vendors
• Processes that are automated and standardized
• Country specific expertise accommodated
• A way to manage it all on a global level

So, the process would be, choose a hybrid approach and then consider how to manage it on a global level-this will lead you down the road of the structure and control you need to make it all work. This road inevitably leads you to considering a technology solution to bring it all together.

Now you are on the right track - you choose the number of delivery models and local country vendors that is right for your payroll needs. You introduce standardized data and processes so you can develop a single way of working across all of your countries. And then you remove the time-consuming manual data entry sight of payroll and replace it with rapid automated data flows for end-to-end processing of your payroll.

This way, you can put in place a process that really works across countries and continents and allows you to apply structure and control to your multi-country payroll. You have a process that works and a way to manage it all with visibility and control.

Our clients use Payslip to manage their hybrid payroll

Our client Cloudera joined us on the webinar and talked about the reasons they chose a hybrid payroll model and how our global payroll control platform helps them to manage it.

David Nugent spoke about how the single vendor model was created back in the 1990s, but the business world and global payroll delivery has moved on significantly in recent years, creating a new requirement for a different approach that is capable of handling the complexity of modern-day payroll delivery across several countries and continents at once.

The single vendor model has not kept pace with the fast-changing pace of the business world and tends to come with multiple 3rd party partners that you also have to deal with.

Payroll is local and different in each country and David really values having local expertise available to handle the complex nuances associated with each country. This is why Cloudera embrace the use of multiple local country vendors. On Payslip, they easily connect all of these vendors to our platform where they can see and manage them, while also having the data from these vendors flow-in to the platform in an automated fashion, facilitating the reporting and analytics they need to manage their payroll in an effective way.

We see complexities within region, France & Germany are so different- the local country providers have the expertise we need around data, tax, benefits, legislation changes and compliance- I have found that local vendors are far more willing to help out with legislation and compliance issues.

Attempting to manage such diverse local country nuance with a single model or aggregator would lead to complications and challenges that would drain a lot of time, energy & resources. Cloudera far prefer being able to approach new vendors anytime they need them and simply bring them onto the Payslip platform in a number of days.

Choosing the hybrid approach and managing it all on the Payslip platform made business sense-it allowed them to manage payroll on their terms, choose or change vendors anytime they needed to while managing costs.

Payslip + Hybrid was far more cost effective than an Aggregator model, there was also a lot of time savings which was equally important to us.

Hannah Huneidi, also of Cloudera, has the challenging task of managing payroll in their Latin America countries, so she is perfectly positioned to provide insight into the strong need for local expertise.

Hybrid means you can shop around and be really strategic for your chosen region and get the right level of service and support that you need. Latin America payroll is completely different to the US, so we really require different vendors.

Hannah, like many global payroll professionals, likes to be in a position where she has control over the vendors in her network. Cultural differences and nuances are significant factors in the Latin America region, so choosing your own vendors is very important. Then it is about managing them and their data and bringing it all under a global framework. This is why Cloudera are on Payslip.

Payslip means I can quickly transition to a new vendor because all our data and documentation sits in one location, the platform. Also, the reduction time in process and increase in accuracy with Payslip has just been astronomical.

Hannah is in full agreement with the industry analysts who believe the hybrid model is likely to dominate global payroll delivery and management in the years to come. It offers the best levels of control, an ability to consolidate and centralize data from multiple vendors around the globe while managing their performance levels.

I see many companies transitioning to tech platforms that enable automation, reporting and streamlining payroll processes.

When the data from multiple vendors and the selection of service delivery models is all consolidated in a single location like it is on the Payslip platform, then reporting becomes standardized and comparable. The result is further visibility and control, a clear understanding of what is happening across payroll countries and the ability to create and deliver quickly the kind of payroll reports needed for informed decision making at leadership level. Payslip integrates quickly and seamlessly with HCMs, another crucial source of payroll related data needed for detailed and comprehensive reporting on a micro and macro level.

We have greatly benefited from Workday integrations with Payslip, and we no longer have to manually build GL files which Payslip now generates at the touch of a button, saving our finance team a huge amount of time.

The Payslip platform is ideal for global companies pursuing a hybrid model: it doesn't matter what model you choose or how many number of vendors are in your network- they can all be accommodated and connected to the global payroll control platform. Standardized data, automated workflows and human resource systems integrations all combine to enable global companies to take back control of their global payroll process and delivery.

If you are considering pursuing a hybrid model in 2023, then now is the time to get into preparation mode. Talk to our team and take a platform tour today to see how easy it is to deliver hybrid payroll on our purpose-built global payroll platform.

Take a Platform Tour

For more information about our Global Payroll Control Platform contact us today.