Until 2009, I didn’t have a great deal of time for Starbucks. I saw it, rightly or wrongly, as a symbol of the worst of sanitized corporate America, putting pressure on independent coffee shops in my home city of San Francisco with its cookie-cutter offering. But that all changed when I moved to Asia. While my taste buds were exposed to a fabulous array of new sensations from Bali to Tokyo, Starbucks provided an unexpected safe option for those more mundane occasions when I was hurrying to an airport and I needed a speedy caffeine fix.
In this process of self-discovery, I discovered that Starbucks is both as homogenous as I expected, but also at times surprisingly different from country to country. Each latte I bought gave me much of the same wake-up buzz wherever I was (and frankly, proved to be just as palatable as my preferred San Francisco coffee shops). Likewise, the purchasing process was standard, even if store layouts were fine-tuned to local requirements and customer service quirks differed. But the blueberry muffins, which became my snack of choice, were a different story. The variation in taste and texture from country to country was so noticeable that I found myself on an accidental odyssey to sample a muffin in every country I visited. But this research was curtailed when my wife took me aside one day and delicately pointed out the calorie count.
The Starbucks business model—along with the different franchising models adopted by brands such as McDonald’s—provides a lot of lessons for global payroll aggregators, the vendors that use independent in-country partners (ICPs) to process payroll on their behalf. Any effort to provide standardized goods and services around the world runs into big challenges, from processes to quality of customer service—and, as many multinational customers will attest, the global payroll industry tackles these issues with varying degrees of success.
There’s a fundamental difference between a global chain of wholly-owned or franchised stores and the payroll aggregator model. The former typically operate according to a comprehensive end-to-end playbook, while the latter is more of a framework, imposing certain rules but otherwise giving each ICP a lot of freedom to do things its own way.
I have no idea how easy it is for a Starbucks barista in Seattle to quit his job, fly to Sydney, and take up the same role—but I’m guessing that with a little localized training, some recovery time for jetlag, and a guide to Aussie Rules Football, it would be a relatively smooth transition.
You couldn’t say the same for a Seattle-based global payroll ICP. True, some things are common. All ICPs need to be able to manage data inputs and outputs in the format specified by the aggregator. They need to meet certain functionality requirements. And if they’re being managed properly, they need to meet important governance demands covering everything from their financial viability to client data security. Within that framework, however, they run their own business how they choose, with their own processes, working practices, and IT systems. Just as important, they typically work for many different masters. In fact, the global payroll aggregator may not even be one of their biggest customers.
This has important implications. Take technology, for example. From where I stand on the other side of the counter, every Starbucks coffee machine looks pretty similar. But if you were to sit in front of the processing systems used by two different ICPs, one might look familiar and the second utterly incomprehensible. Inevitably, this means some are more robust and functionality-rich than others—which might impact their ability to scale, for example, or determine how they manage retroactive payments.
The same applies to the payroll data inputs that ICPs receive. Some may be able to integrate them directly into their systems, while others may need to make manual adjustments, with all that involves in terms of speed and potential for errors.
In theory, the global payroll aggregator model should have a lot in common with Starbucks in terms of its ability to deliver consistent quality around the world, while meeting local requirements or constraints. In practice, as Webster Buchanan Research pointed out in a paper published in December 2015, there are big differences between the aggregator models—and indeed between aggregators and other providers, such as the accounting networks—which may have important implications for the type and quality of service you’ll receive.
Variances between blueberry muffin experiences do little more than keep people like me entertained for five minutes while I’m standing in line at airport security—but differences in payroll delivery can be far harder to digest.