Global payroll leaders must be able to manage change and participate in business strategy, a panel of industry experts said during the Global Payroll Management Forum presentation, “The State of Global Payroll: Facts, Fears, and the Future for Your Organization.”
When it comes to understanding the workforce and strategic decision-making, business leaders rely on the insight of global payroll professionals and reliable data they can provide as a basis for making their decisions, the panelists agreed.
Global Payroll Management Institute (GPMI) Director of Global Payroll Training and Development Mary Holland, CPP, moderated the discussion during last May’s forum, held in conjunction with the American Payroll Association’s Annual Congress in Orlando, Florida. Panelists Laurent Botella, Workday; Jeff Brown, EY; Alex Chudnovsky, SAP SuccessFactors; and Kathleen Williams, NGAHuman Resources discussed the changing role of the global payroll professional.
Global Payroll Operations
Brown addressed emerging trends that define how organizations are handling their global payroll operations, observing that companies are always working to figure out the best model based on their size and the location of their workforce. He noted that to address the challenge, organizations are consolidating into regional hubs while staying locally compliant. Vendor governance has become a core competency for global payroll leaders, he said.
Botella said he is also seeing investment in aggregators and the maturation of cloud-based technology. Holland noted that these trends are leading to the need for global payroll leaders to have management skills to succeed.
Payroll usually doesn’t report to HR, Brown noted, resulting in a divide between HR and finance that may impact payroll accuracy. The way to overcome this, he said, “is to embrace a relationship with HR, which may be difficult to do.”
The Changing Role of the Global Payroll Professional
Williams addressed the changing role of payroll professionals.
“Now,” she said, “their role has been redefined into becoming a global strategic solutions provider. The global payroll professional has to be a change pioneer. For efficiency, you must provide immediate validation to the clients.”
Top Challenges in Global Payroll
Addressing the top challenges that organizations face related to global payroll, Botella discussed the challenges related to standardization, process, and technology, as well as the question of who “owns” global payroll.
Chudnovsky added that despite the global aspect, “payroll is a local business.”
Holland echoed Botella’s point that it is important to clarify the global process owner: “Someone has to own it and drive it through the organization.”
Standardized Payroll Processes
How standardized are payroll processes globally within organizations?
Williams answered that global organizations have very little standardization and that successful regional standards become global standards. Overall, the organization should look at where to globalize, what must remain local due to regulatory requirements, and how to marry the two.
“Go global where you can; go local where you must,” she said.
Botella added that a company may standardize and have a local approach.
“Have a goal but be pragmatic,” he said. “Be wise and smart; get local leadership on board. Know where you are heading; know which vendor to use for which purpose.”
Brown said that standardization comes up a lot in payroll design, but it is difficult to attain. He offered three points:
Make progress toward a very defined decision tree; define what’s going to be global vs. local
Ensure there is executive sponsorship
Establish what your target is (80/20, 60/40), how to measure that target, what it means, and how to measure and understand local practices
Size in the Decision-Making Process
Botella also addressed the question of how size impacts decision-making. He said that the same vendor cannot address the same solution if location and the number of employees are different; multiple solutions are needed. He emphasized the need to develop a spreadsheet, identify where your employees are working, and where the system may be breaking down.
Brown agreed and said companies should try to put a demographic spreadsheet together and understand the complexity. Some divide in tiers, or look to have different delivery models based on size. He advised it is necessary to understand the complexity of regionalization and to build a matrix around it.
Data Privacy and the GDPR
Ian Sparrow, Vice President of Global Payroll, ADP Multinational Clients, joined the conversation from the audience and offered that the forthcoming General Data Protection Regulation (GDPR) set to take effect in May 2018 in the European Union is a daily topic of conversation.
“Data masking will touch global payroll and how you share information between countries as well,” he said.
He called it a game-changer with far-reaching laws that will result in changes in how data is held, used, and shared.
Brown recommended that companies think about an internal cybersecurity audit. He suggested the development of controls within your processes—asking how are you monitoring and complying with controls and keeping your organization up to date.
Holland added that if you are moving data from one country to another, you must have defined consent from the employee. Sparrow noted that with regard to data privacy, employees must be educated as to their responsibilities.
Join the 3rd Annual Global Payroll Management Forum
This year’s Global Payroll Management Forum will take place May 15-19 in National Harbor, Maryland, just outside Washington, D.C. It provides progressive global payroll education and enhanced networking opportunities for professionals in payroll, accounts payable, finance, HR, and benefits from all over the world.
Delivering crucial international payroll updates as well as priceless answers to your international payroll questions, this year's conference packs more education than ever before into 4-1/2 days:
- Learn from experts on complex global compliance and employment issues
- Gain insights to country-specific payroll laws and regulations
- Optimize your company's global strategies and global payroll delivery models
- Network with 2,000 payroll professional peers
Frank J. Mendelson is an Acquisitions Editor for the Global Payroll Management Institute. He has been working with the American Payroll Association since 2009 as an editor for PAYTECH magazine, and has presented workshops at the Annual Congress on effective communication.