No department or business likes to be restricted or have an external, third-party provider overly influence their internal decision making. In country partners or local country payroll providers are essential vendor relationships in the global payroll delivery and management ecosystem.
Everybody knows that global payroll cannot exist in isolation-these local country payroll providers will always be required to pay employees on the ground in the local countries where a multinational chooses to do business and requires international payroll services. These specialist providers have the localized knowledge and regulatory expertise to ensure that the multinational adheres to all its regulatory and compliance commitments when it comes to global payroll services.
It is often the case that an internal decision within the business leads to a change in global payroll marketplace business model-this can often result in a connection with a third-party provider such as an accountancy firm or an aggregator. A common feature of this business relationship is that the multinational ends up surrendering positive working relationships they have built up with local country providers in their payroll countries.
In this article, we will examine the reasons why this happens and also provide alternatives to this unsatisfactory situation.
Unwanted Rip n Replace
Sometimes a decision within a business to change the global payroll delivery model results in an unwanted rip and replace project. Such a project is a lengthy, time-consuming and expensive business that is usually met with a lot of resistance within the global payroll team.
An example of this would be a decision to move over to an aggregator services model-this is where you essentially outsource your payroll delivery for specific countries to a single aggregator. The Aggregator subsequently engages with its own network of local country providers and begins the process of moving your payroll delivery in these countries over to their specific network to pay your global workforce.
It can often be the case, that the decision makers were not aware that there is an alternative option out there where they can hold on to the payroll providers that they have been perfectly happy with in terms of the services they have been receiving from them. Now, they are being asked to surrender these relationships which they have invested a lot of time in over the years, all because of a decision to outsource payroll to the aggregator services model. Control and visibility are immediately relinquished and surrendered-because you essentially have no relationship with the new local country provider that is assigned to your payroll country-this relationship is managed and monitored by an account manager within the aggregator company. You have no control over the quality of service or the query resolution time-far from solving your global payroll challenges, it is often the case that this process ends up creating new challenges that didn't exist previously.
Don’t throw away what is working!
Rip and replace payroll software projects are a source of immense frustration for global payroll professionals at multinational companies around the world. The frustration comes from throwing away something that is already working and doesn't need replacing.
Why does this happen? Sometimes, people get convinced on sales calls that what they need to do is consolidate a range of different local country providers with one master provider. They usually get sold a line about reducing complexity and streamlining everything into a single contract.
Sounds nice, but it is a bit of a myth in reality because no aggregator services model will have blanket country coverage-not anywhere near it in fact. So, as an example, what you may end up with is an aggregator covering six of your countries, but no solution for the other eight of your countries if you have 14 in total.
And you lose the successful rapport and business relationship that you have built up over the years with a local country provider who turns out not to be a part of the chosen aggregator’s network, meaning you are forced to end the business relationship with them and enter into a new one with a local provider that you are unlikely to have any day-to-day contact with-who wants this scenario? This is really just throwing away what is already working and entering into a new relationship, then hoping for the best.
You are surrendering control and visibility over what is happening across all of your payroll countries. You may end up having a selection of these countries consolidated under a single provider but that doesn't mean you're getting a better service, better payroll delivery and management or solutions to specific payroll challenges that you have been experiencing. Also, time is a huge factor- it can often takes the Aggregators many months to set you up with a new provider- it’s a large undertaking for them and you can be waiting a very long time to be and running efficiently with new local vendors.
Keep what’s working. Manage it better.
Ultimately, the consolidation of local country payroll providers to simplify things and reduce complexity is misleading- the truth is you don't have a provider problem, you have a data challenge. By this we mean, you don't need to consolidate or reduce your number of vendors-instead you need to consolidate all of the data from all of these providers onto a single platform while also using the single platform to manage these providers in a better way.
The good news is that this can happen on the Payslip global payroll control platform. On our digital cloud platform, you can consolidate all of the data from all of your local country providers in one place. How it works is we connect all of your providers to the platform via our powerful integration features, then we automate the data flows from these providers and consolidate all of it on the platform. The platform is set up for the rapid onboarding of vendors: we added 28 countries in just 4 months for our client Cloudera, a world away from the long-term project onboarding process the aggregators force you to endure.
We also standardize this data, so you end up being able to manage all of your payroll data in a single location while maintaining relationships with your preferred list of local country payroll providers. You also have the power to swap out and change these providers anytime you want as our platform is vendor agnostic.
New providers can be adopted and integrated quickly during periods of growth or company acquisition. Employers can pick and choose which payroll providers to work with and Payslip will integrate with them. The system monitors ICP performance against SLAs and allows global employers to make data driven decisions regarding their in-country providers-with this process, you don't surrender control to an external third-party provider who doesn't really understand your business or payroll needs-instead you gain additional control by always being able to select and work with your own local country vendors.
Pretty much every large enterprise or growing business today will be operating with several different local country providers to help them manage their long-tail countries-this is simply the nature of global payroll delivery and management. These companies do not wish to surrender control of their payroll in return for some minor reduction in administrative duties-they are not really looking for a service solution.
Instead, they want to be able to manage all of their providers and crucially all of the payroll data that comes with them, in a single location that offers them full visibility and control in a way that lets them see exactly what is happening across all of their payroll countries at any given time.
This is why more and more companies are turning to our global payroll control platform to help them deliver multi-country payroll on their terms instead of being forced to surrender control over to a third-party provider. If you are looking to keep existing relationships with local country providers but seeking a better way to manage them while having full visibility over the data, set up a platform tour with a member of our team today and we will introduce you to the alternative solution that you have been looking for.