Global payroll management is a mission critical service that needs to be delivered accurately and on time to global employees around the world at multinational companies. Like any mission critical service, there can be difficulties and challenges and it may be the case that a transformation is required because either the process or the legacy technology delivering the process is encountering consistent challenges.
Lots of business-critical units or departments undergo digital transformation projects, global payroll is often overlooked when it comes to this level of transformation. The general view is that if employees get paid accurately and on time every month, then there is no need to attempt to fix what is not broken. This approach fails to recognize the often heroic efforts of global payroll professionals striving every month to ensure the workforce is paid for positive employee morale. The vast majority of these professionals we believe would welcome the digitization of their department and the transformation of the way payroll is delivered internationally today.
In this article we are going to look at a few of the telltale signs which indicate that your organization may require a payroll transformation project.
Head above water workloads
In this scenario, global payroll professionals are keeping their heads above water each month every month. They are just about getting payroll delivered on time and all of a sudden, a new month of payroll has begun, meaning that there is no time for any analysis or reporting work and payroll professionals are back to processing data and working on a new pay cycle to run payroll.
This can be exhausting and even demoralizing but it is also subject to risk. It is really only a matter of time before a payroll data error creeps in. This tends to happen when there is no time or breathing space between pay cycles, there is no room for process improvement or analysis work around what could be done better. All the time that the payroll professional has is taken up with either manual work or processing payroll across multiple countries.
It is an unsatisfying scenario for the payroll professional who may start to wonder if it is worth all their time and effort, they will look on enviously at colleagues in other departments such as sales, product and marketing and see them working with advanced digital tools and innovative processes and they will wonder why such levels of innovation and project management cannot be applied to a crucial department like global payroll.
Manual spreadsheets dominate
This is usually the biggest alarm bell of all, if you are still processing your payroll service via excel spreadsheet in 2022, something has gone badly wrong with payroll management. The payroll system is often a company's largest expense so why subject the processing of it to error prone manual data entry spreadsheets which belong in the past.
Spreadsheets are slow, cumbersome, and time-consuming. They are also prone to human error and data risks; this is not how global payroll should be processed in 2022. Instead, robotic process automation (RPA) or configurable automation technology that is purpose built for global payroll software should be doing the heavy lifting here. This can create much needed time and breathing space within each pay run cycle for a global payroll professional to dedicate their valuable time to higher priority work such as reporting and analysis.
Often the first step of payroll transformation is to automate the data throughout the payroll process, especially the pre payroll data inputs from the hcm and hr team which usually tend to be the most time-consuming and troublesome. Preparing data for absorption into payroll engines should no longer happen in spreadsheets and should not involve manual work. Automating this crucial part of payroll can hugely speed up the process and delivery of payroll. It also eliminates the likelihood of human error and removes this risk from the process. Everything is smoother, faster, and more efficient.
One-size fits all vendor relationship
This is another key indicator that it might be time for a change. International payroll across several different countries is nuanced and highly localized to each country. If your global payroll model includes a relationship with a one-size fits all vendor/payroll service provider, then you are going to encounter problems.
The reason for this is a lack of flexibility, the vendor business model is to capture as much business as possible using their own specific form of technology. It is not their job or business model to tailor their services to your specific needs. You lose out on control, and it is very difficult then to get visibility over all of your payroll countries and actually see what is happening with your payroll each month.
The aggregator model is an example of this, it had been popular for some time but now the challenges that come with it are being discussed a lot more. For example, you might have over fifteen countries on your payroll and your relationship with the aggregator model means that only eight of these countries are covered, how then do you manage the remaining seven? The aggregator cannot help you; it is not their business model. Their model is a one-size fits all, so that they cater to the needs of you and other companies who need help in the eight countries that they do cover.
What you really need is a global payroll control platform that enables you to oversee and manage the delivery of global payroll across every one of your countries in a way that is transparent and innovative. The one size fits all model is not built for your needs and is clearly not the future of payroll at your organization.
You have no reporting
Global payroll reporting is required to help the global payroll team, key stakeholders and business leaders at the organization get a clear handle on labor costs, especially with data that is comparative so that they can see how costs can vary across countries in a single currency and really drill down into the details of why these variations are happening. If you have no or limited reporting, you will find that you are flying blind and making decisions about business needs that are not supported by hard data or facts. Nobody wants to be in this decision-making situation as this is the opposite of visibility and control.
Global payroll can be complex and nuanced, therefore reporting needs to be detailed, comprehensive, self-service and above all consolidated across all of your countries. Only at this point can it produce truly meaningful data, the kind of data that can help you make decisions, especially around things like recruitment. There is a requirement for reporting that delivers bigger picture macro insights as well as the ability to drill down into the micro details that can make all the difference by telling the story behind the data.
A lot of organizations today run global payroll using excel spreadsheets or dated legacy technology, they have no digital innovative reporting tools, therefore they have no reporting or real insight into what is happening across all of their payroll countries. A lack of informative reporting, unsatisfactory reporting, or no reporting at all is a clear sign that it is time for a global payroll transformation at your organization.
Implementing digital initiatives throughout the payroll process can transform how payroll is operated in organizations today. Acquiring automation technology and discarding the use of manual processes, having access to detailed real-time reporting, and having a global payroll control platform can all be possible when you undergo a payroll transformation project.
For more information about our Global Payroll Control Platform contact us today.