Global payroll professionals are constantly scanning the international landscape in search of the best solutions to serve the needs of their organizations. Domestic or global, the outcomes payroll seeks are similar, though the challenges vary greatly. The goal for payroll teams is universal: delivering paychecks accurately, on time, and in legal compliance.
This is easy to say, yes, but the challenge increases with the demographics of a global workforce, the complexity of multi-country laws and regulations, and the strategic demands that elevate global payroll to C-suite considerations. Technology, of course, is always a factor in the efficient, economic, and effective delivery of global payroll services.
These considerations were the backdrop for the kickoff event of the 2019 Global Payroll Management Forum’s annual “The State of Global Payroll” panel discussion held in conjunction with the American Payroll Association’s (APA) Annual Congress last May in Long Beach, California. This year, the forum will take place during the APA’s Annual Congress in Orlando, Florida, on 6 May.
During last year’s forum, payroll professionals from around the world filled the room to capacity as they engaged with one another in collegial conversations just before the formal panel discussion began. The 2019 panelists were:
- Michele Honomichl, Product Evangelist for Multi-Country Payroll at ADP
- Marc-Oliver Fiedler, CEO and Co-founder at Payzaar
- Carolyn Gould, retired Principle at PwC
- Rangarajan Seshadri, CEO at Neeyamo
The engaging discussion was moderated by Mary Holland, the former Global Director of Strategy, Development, and Training for the Global Payroll Management Institute (GPMI). In Holland’s opening remarks, she noted that the growing demand for global payroll professionals has trifurcated the market, with 25% of all employees having more than 10 years of work experience, and a similar number of employees with less than two years. Despite the difference in levels of experience, all managed similar challenges, which made the executive panel so well-attended.
The panel discussion included selecting a global service delivery model, strategic choices in managing risk and compliance issues, data management and data privacy, the strategic role of global payroll, vendor selection, technological evolution, and a discussion of how organizations are handling their global payroll operations.
Fiedler first provided a historic, big-picture look at the trends in global payroll, noting how payroll has been evolving over that past few decades. Going back in time, Fiedler said that companies initially were operating in a centralized payroll setup—local countries with local payroll operations, lacking in cross-border synergies. New models (aggregator model) allowed companies the synergy to manage payroll in a more holistic manner. The next phase of that evolution, he said, would go from a local payroll partner in each country to companies that prefer more flexibility with choosing their local partners. This included bringing payroll back in-house, depending on scale.
Honomichl noted the corporate imperative for greater efficiency, and provided an example of a company that might need to change from having one person in a country managing a payroll of 50 people, to a shared services model or standardization—using technology to help services become more simplified and less fragmented.
In support of Honomichl’s comments, Gould noted the greater focus on compliance than in the past, which requires companies to put in the right infrastructure to handle global compliance demands. Seshadri joined the conversation and recognized the need for transformation in global payroll to more completely leverage technology and fully evolve into an integrated “touch of a button” across all countries.
He acknowledged the pre-payroll (input and compliance) and post-payroll needs for streamlining and to become more tech-driven. Compliance, he said, can’t reside in someone’s head or on a spreadsheet alone. It needs the advantage of better use of existing technology, for a “fully tech” solution that eliminates manual intervention. Seshadri added that the use of robotics and artificial intelligence (AI) will assist in helpdesk solutions.
A conversation on the power of emerging technology was a logical next topic. Honomichl surveyed the audience to illustrate how companies are shifting from an “on-prem” experience to a cloud-based solution. The profound implication for payroll is standardization provided by cloud-based providers. She was careful to acknowledge that these systems are still far from perfect, but the direction is clear, especially over the past two years. During this time, validated, good data coming into the pre-process in payroll is becoming the rule and allows for greater standardization.
Honomichl added that countries around the world are going through a process where they are demanding real-time integration by asking for data at the time of hire (within 24 hours of hire in some countries). Digitization, resulting in speed and compliance, is becoming a global norm. She said the bottom line is to get data into the hands of people when they need it. Seshadri added that complexities still exist, but the long-tail of providing services to smaller countries with less headcount is changing. Tech-providers are now working toward a single solution.
Regarding data privacy, Gould first noted that it is critical to have flexibility. Countries have evolving rules, so it is important to keep up to date on your vendors and ensure their data management programs have passed certification and can explain how to keep up on data-privacy regulations around the globe. Fiedler noted that the biggest risk for a data breech is not from being hacked, or breeching a firewall, it’s from email. That’s why it’s so important from the standpoint of GDPR that every data breech be reported. Fiedler explained why companies shouldn’t have email in their payroll processes and why they must use other more secure tools to manage the sensitive flow and exchange of information. This means, Fiedler said, that companies really need to understand their full data-flow, including how vendors work with the data sent to them. Employee training on data management can be facilitated by technology training tools.
During the discussion on compliance, Gould highlighted the misunderstanding for those who believe their vendors are responsible for an organization’s payroll compliance. She added that conversations on compliance must include cross-functional responsibility and that it can’t be the function of any one group. Having groups work together is necessary in the pre-payroll process to make sure that everything is getting to payroll that should.
Like everything to do with success in business, Gould emphasized the role that clear, cross-compartmental communication has in organizational compliance, which requires that everyone has a full-picture. Seshadri agreed that process is also important, especially when combined with automation. This includes triggering a notice of non-compliance, so it can be referred to at audit time. It’s a combination of standardizing the process and making sure it’s trackable and reportable.
Be sure to not miss this year’s “The State of Global Payroll: Facts, Fears and the Future for Your Organization” panel discussion by registering for the 5th Annual Global Payroll Management Forum today.
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Frank J. Mendelson is Acquisitions Editor for the Global Payroll Management Institute (GPMI) and American Payroll Association (APA).