Managing a global payroll process can be a huge undertaking, one which is made more complicated depending on the size of the organization and the number of countries the business operates within.
During the APA’s Annual Congress in Long Beach, California, in May, approximately 120 global payroll professionals engaged with Workday’s Joy Blankenship, CPP, Director of Global Payroll and Stock Administration, and Randy Davis, Senior Manager for Global Payroll, as they presented the workshop “Standardizing Global Payroll Processes.”
Attendees established early on that more than half of them manage global payroll processes for a population of at least 3,000 employees spread across more than 20 countries. With global payroll processes providing challenges ranging from vendor dependence and languages to in-country expertise and systems, it was clear that everyone in the room wanted to know how they could streamline and standardize their own payroll processes more effectively.
Blankenship and Davis highlighted the initial considerations, including service delivery model options and the solutions available within their detailed, step-by-step presentation.
Selecting a Model
Davis asked attendees to consider why they wanted to go global, how many countries they are in, what laws may restrict them, and what languages they need to support in order to establish what model to follow. For example, should they pursue a single, outsourced solution under a single contract or a local in-country service provider (ISP) model that utilizes local providers specific to each country? Another option is the payroll aggregator model, which uses both a network of ISPs and a single contract.
With so many model options available, the most important consideration is first defining their companies’ needs, so that whatever direction payroll pros ultimately take, the model they select will fit their organizational structure. The model should help the company become more aligned and provide more standardized reporting.
Regarding technology, the main message was that regardless of what any vendor may tell you, there is no one-size-fits-all solution. Every global payroll operation is unique, and therefore there is no right or wrong answer in terms of what technology you should be using provided the solution you choose is right for you.
However, there are considerations that global payroll professionals need to be aware of. For example, if you are selecting a local path solution, where will your data be stored and how secure is it? What are the costs concerning the number of employees it will be supporting and how will the solution support multiple languages? A global, cloud-based solution that can be accessed from numerous locations will often provide a more straightforward way forward with a single platform and a consolidated, single data storage warehouse.
Blankenship gave the audience an account of how Workday globalized all of its 30+ countries from Salt Lake City. She highlighted specific examples of where blockages and issues can occur when embarking on such a sizable, complex project. Just understanding the current model and how many providers they already had was a challenge in itself. However, Blankenship shared that once you have mapped your existing business processes and documented all the controls, pain points, and inefficiencies, as well as what it is you are ultimately trying to improve (and why), it becomes much easier to move forward with your project objectives.
Working Across Departments
The next step to standardizing the global payroll process is to engage and secure the support of other teams that may be affected. By engaging with accounting, tax, HR, legal, and finance you can get these teams to be an advocate for your project, which in turn may help you get the funds you need to make progress. However, as Blankenship carefully pointed out, be careful not to over-promise or you may not be able to deliver later.
Requesting a Proposal
The next crucial element to delivering a standardized global process project is the request for proposal (RFP). The instructors went into detail during the presentation about how to get the most out of your RFP and your vendor. It starts with getting as much detail into the RFP as possible.
For example, where have you or your colleagues been let down in the past? What additional services do you want? Think about everything, because you want to get as much out of your vendor as possible and ensure it is accountable going forward. You also need to understand who will own the project. On the surface, this may seem obvious but, as Davis pointed out, will this be your project manager, the supplier’s project manager, or you? It is also critical that you establish everyone else’s roles in the project.
The presenters strongly recommended that everyone avoid the “big bang” approach (trying to implement the project to all countries at once). Instead, consider following a country-by-country approach. Remember to be patient and be realistic with your timeframes and take time to document all of your controls as soon as you start rolling out the project, as this will save you significant time (and pain) in the future.
Documenting and understanding what you need to achieve is critical if you want to be able to fully map and understand the steps required. Remember, too, that every country will bring its own unique set of challenges and special requirements.
Essentially, Davis likened a successful standardization of a global payroll project to that of building a house. First, one must document everything in a plan so that everyone is clear about what needs to be built and by when. Timeframes for the build need to be realistic and foundations need to be laid from the start. Communication throughout the project is essential to ensure everyone remains aligned to the strategy, vision, and goal of the project.
You need to manage your consultants the same way you would manage a building contractor. Remind them that they are there for you and do not be persuaded into doing something that does not fit with your vision. Their role is to support you, so regularly ensure that you review your expectations with them so you can agree on what they are delivering and by when. Providing you have followed these steps, fully documented all of your end-to-end processes, and communicated the impact of the project to all your employees, you should be well on your way to achieving a standardized global payroll transformation that delivers.
So, is it worth it? There will always be struggles, many of which will be impossible to plan for thoroughly. You may have vendors that refuse to behave professionally when you notify them that you are switching providers. You may need to revisit some of your original decisions about topics such as globalizing deduction codes for taxes as you proceed. Based on Blankenship and Davis’ presentation, these challenges should not deter you.
Why? Standardizing allows reporting to become much more manageable. Standardizing will enable you to train new members of your team more successfully (especially when you consider that every vendor will have its own nuances that need to be managed).
However, be mindful that you cannot standardize everything. Every global payroll is different, so standardizing every country and process is not always going to be possible. Sometimes you will have to localize, but the key to your successful journey is knowing what you can and cannot standardize. Again, there is no one-size-fits-all model. That said, it does not mean you cannot attempt to reach for the stars by seeing just how much standardization you can achieve.
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Nick Day is Managing Director of Payroll, HR, and Marketing Recruitment for JGA Recruitment in the United Kingdom, host of multiple payroll podcasts, and the Managing Director of payrolljobsboard.com.