Editor’s note: Nellie Bloom is President of MSI Global Tax and Compensation. In this position, Bloom is responsible for the strategic direction and management of MSI’s global tax and compensation division. Bloom’s goal is to ensure the delivery of timely and accurate reporting to her clients and to ensure that MSI remains in compliance with local reporting requirements. She serves as MSI’s in-house subject matter expert for both U.S. individual income tax and reporting requirements and global compensation tax issues. Bloom brings 15 years of experience to the role. Prior to joining MSI, she was employed in the international expatriate tax department of PricewaterhouseCoopers and, more recently, was a Senior Manager at Deloitte. She currently holds the Global Professional in Human Resources (GPHR) certification from the Society of Human Resources (SHRM).
How are emerging trends in global payroll affecting the role of the payroll professional?
The role of the payroll professional has significantly changed over the past five or so years. Through automation and outsourcing, payroll has shifted from being task-focused to becoming a valued strategic partner within many organizations.
Payroll is one of the largest costs of doing business. By automating that process, payroll professionals have been able to focus more on analytics and process improvement, as well as identifying areas of compliance that require attention within their organizations.
Through the years, I’ve seen a shift where payroll professionals are being asked to be more strategic through analyzing data and providing meaningful reports and recommendations to business leaders throughout their organization.
What emerging trends in global payroll are you seeing?
There are two trends that I continue to see and that have been increasingly becoming more apparent: The first is achieving a truly compliant global payroll by using integrated systems. Companies are looking for integrated tools that can provide a global payroll that is seamless and fully integrated across regions. More and more companies are demanding full visibility to their payroll costs across the globe and require a fully integrated technology solution.
This ties into the second trend, which is ensuring compliance. Without a global payroll technology solution, many companies find it difficult to ensure compliance in all states and countries in which they operate. Many companies end up paying their tax providers large fees to review their payroll and employer obligations to ensure that they are compliant in the locations where they operate.
Many times, noncompliance is determined by the tax authorities rather than addressed proactively within the company, and companies are then subject to penalties and interest for noncompliance violations. Full visibility into payroll across the globe continues to be an issue for global companies. Although there are a handful of providers that provide “global payroll,” very few have one integrated system that can provide the type of reports that corporate financial and payroll departments need in order to conduct compliance reviews.
How can a payroll department provide support on a strategic level to corporate finance, human resources, and other departments?
The payroll department has a wealth of analytics available to it thanks to the data it receives on an ongoing basis. Besides the basics of name, title, salary, and tax details the payroll department needs to track, it also has access to many other data elements within the organization. Since salaries and wages are usually one of the largest, if not the largest, costs to an organization, the data that resides in the payroll system can be reported on and broken out into many different reports that may be useful to corporate finance and the leadership team.
For example, if a company wanted to consolidate operations to a lower-cost area, the payroll team can provide current actual costs that could be compared against the estimated costs of employment in the new location, which could provide an estimated total cost savings report for the relocation of the operations.
What would you advise for a company moving from a domestic to a global payroll for the first time?
In my experience, when a company is going global for the first time, regardless of location, the company should engage with a consultant that is familiar with global expansion. There are many rules and regulations when setting up a payroll in a new location that must be adhered to in order to be successful and to keep the company compliant. Additionally, the company will need to obtain expert tax advice for each location where it is expanding. It is the company’s obligation to ensure it remains compliant in each location, both from an employee perspective as well as from the employer side. Some countries are relatively straightforward when it comes to setting up a payroll within their country, and others have many regulations that must be followed, otherwise the employee and the company may be liable for penalties and noncompliance within those countries.
With the emergence of technology and data-driven HR decision-making, how do you see the role of the payroll professional evolving?
Payroll professionals’ roles are becoming less transactional and more strategic in nature. Payroll professionals need to ensure that they continue to update their knowledge and skills through training and certification. Additionally, as more companies engage in flexible employment arrangements, the payroll professional must understand the compliance issues that surround these kinds of employment arrangements. Many companies now employ virtual employees and contractual or independent contractors around the world. These employees add a level of complexity to tax withholding, remittance, and compliance that payroll professionals need to understand and have the ability to administer.
What are some pieces of wisdom from your on-the-job experience that you can share in regard to being effective, efficient, and a strategic business partner?
The most important skill for a business professional to have is to be collaborative. When your field is global payroll, you have to work across countries and cultures and adapt your style and communication so that the team is working together collaboratively and cohesively.
Each team member is working together toward the same goal, paying their people on time, accurately, and compliantly. Strong processes that can be adapted to local requirements are critical.
Communication skills are of utmost importance to ensure everyone understands the process and their roles within the process. When there is a breakdown in communication or process, there should be a documented course of corrective action so that any issues can be immediately addressed and then prevented in the future.
What books are on your recommended reading list?
I am an avid reader and enjoy reading Harvard Business Review to stay on top of global leadership trends and management initiatives.
Some books I recommend include “Emotional Agility” by Susan David, Ph.D. This book teaches you how to break old patterns and navigate through stressors and setbacks both personally and professionally. Another I found very helpful in my career is “Crucial Conversations” by Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler. “Crucial Conversations” provides tools around how to have difficult conversations persuasively, not abrasively. It helps you prepare for high-stakes conversations that sometimes can be difficult, especially when working across cultures. It is a definite read for anyone who is moving into or is in a leadership role.
There’s another must-read for all leaders and anyone interested in how the world will be shaped in the future. The book is “Connectography: Mapping the Future of Global Civilization” by Parag Khanna. The book discusses how connectivity, not geography, will shape the future of our economy and politics.
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.