How can a global payroll department integrate on a strategic level with corporate finance, human resources, and other departments to provide competitive advantage?
For payroll to succeed, strong links are needed with departments such as corporate finance, human resources, benefits, and treasury. Global payroll requires accurate data in the correct format to process a successful payroll and treasury solution for all payments. Payroll is also responsible for ensuring a suitable finance journal is provided to enable accurate reporting of all payroll-related costs across the business units.
All dependant departments should be part of the planning stage during a global payroll implementation. Introducing a global payroll model should benefit all departments, not just payroll, by providing smoother automated processes, clear procedures and responsibilities, quicker delivery periods, more accurate results, and global visibility.
At activpayroll, our initial project plan builds in the requirements from data sources such as HR, benefits, and time and attendance. We ensure all payment and deduction elements required for a successful payroll are held centrally and all HR policies are clear and understood, including annual events such as benefit enrolment or bonuses.
We also discuss treasury options, and these are agreed upon early in the process to allow planning and penny testing. The global finance team requirements are understood and journal integrations are built to feed directly into finance to report the costs and allocate correctly. This enables the finance team to spend its time on analytics of the payroll results rather than entering the data.
When other departments can see the benefits of a global payroll solution and understand how they can influence processes and improve visibility, this leads to stronger alliances and true integration across the business. With true efficiencies introduced, the company will run efficiently and can concentrate on its core business.
Is it possible to have a single global payroll solution and service?
I believe a single global payroll solution is the best model and the only model for the modern global business environment. So, yes, it is possible to have a true single global payroll solution, and this is what we provide through our technology solution and partner network.
As corporate global responsibilities have increased, so has the need for global payroll control and visibility. Payroll is, after all, one of the largest monthly costs for a business. We are moving into shared service centres becoming the norm—where all financial control for the company’s global operations is based. This naturally centralises a company’s global payroll team and therefore the need for a global payroll solution and service.
As these organizations expand internationally, some elect to keep using established country-specific payroll processes. However, this disjointed approach often overlooks critical elements that may have a significant effect on both compliance and profitability. Our global payroll service solution can offer greater efficiency and improved compliance across all your countries, whilst keeping you abreast of legislative changes as they occur.
We offer integrated international and global payroll services, providing many strategies and synergistic advantages, including economies of scale, alignment of global resources, global methodologies, performance metrics, and the advantage of group reporting in the local language and English.
What are the biggest challenges for global payroll teams?
The global payroll team faces challenges that can range from the practical to highly technical. From a practical perspective, time zone differences coupled with multi-language and cultural differences can make even the simplest task a challenging one. Global payroll professionals can find themselves working long hours to cover time zones if they don’t work smartly. Language barriers can be frustrating and lead to misinterpretations. Payroll is complex, so never assume that the basic rhythm and structure of it is the same as in your own country. Every country has slight nuances that impact how the net pay is calculated and taxes and social taxes calculated and remitted to the authorities.
Knowing where to go for advice and what questions to ask can also create challenges. There are many places you can turn to for advice, from the internet to reputable payroll and tax experts. As misinterpretation is common, caution is advised when seeking advice.
Finally, a payroll professional is used to being the subject matter expert and a common challenge is to expect to remain the subject matter expert in all countries for which you become responsible. You do need a good understanding of the basics; for example, you need to know that in Italy, collective bargaining agreements (CBAs) are the norm and this is what drives rules around overtime, time off, and sick pay for the payroll. You need to understand tax year-end and the documents required by the government, but you cannot know the granular detail of every payroll you are responsible for.
What countries or regions are the most complex for global payroll, and how do you advise a company prepare for them?
Complexity in the payroll process encompasses many areas including legislative requirements, CBAs/union agreements, and contractually agreed arrangements.
Some countries have a fast-paced payroll cycle. In North America, payrolls follow a biweekly or semimonthly pay cycle, which puts pressure on payroll professionals who have to meet double the deadlines of a monthly payroll cycle. Some countries have multiple legislative updates and complex CBAss throughout the year, such as Italy, while others, such as Singapore, have no income tax or social security deductions, leading to a straightforward pay calculation. It really does vary considerably from country to country.
The advice I would give is do your research before preparing for payroll in a new country and do not underestimate the layers of what has to be included as part of your payroll responsibilities. The countries that may seem simple could have hidden requirements such as government filings, and the complex ones may be very transparent and better understood.
Ensure your information source is reputable and has true experts in their team for that country. Payroll impacts different areas depending on the country; for example, in France there is a lot of government filing surrounding sickness, maternity, starters and leavers, etc. What may not seem a “payroll” function in your home country could be in another.
Finally, build a multi-skilled team with not just payroll experts but one that incorporates other skills such as HR, project management, finance, and business skills to ensure a well-rounded team able to manage all areas of global payroll.
Why/how did you become involved in global payroll?
Before launching activpayroll, I worked as a bookkeeper in my parents’ accountancy firm, Grampian Business Bureau (GBB). In 1999, I became a partner in the firm and grew the payroll department that I was running before I launched activpayroll in 2001. Subsequently, GBB was sold to activpayroll. My father became Finance Director, with myself as Managing Director.
I launched activpayroll as a local firm specialising in payroll for the oil and gas market, growing to become the leading payroll and taxation provider of choice for firms throughout the Northeast of Scotland. Having identified a notable increase in companies outsourcing their global payroll, I extended the clientcentred services developed in Scotland to the rest of the world. Today, activpayroll has offices in Houston, Washington, Ontario, Perth, Sydney, Singapore, Edinburgh, Paris, Stavanger, and our global headquarters in Aberdeen.
What are the most important qualities of effective leadership?
I would say commitment is the key. It’s important that the passion I have for the company is reflected through my leadership. Some weeks I can be traveling to up to three different countries on business, but I always ensure that I stay in touch with the team through phone calls and emails, regardless of where I am. Showing just how committed I am earns not only the respect of team members, but also instills my hardworking attitude in employees, resulting in a high standard of service delivery.
Communication is also vitally important. Effectively communicating with the team ensures they know exactly what they should be working on and with the correct attitude. I believe the positive company culture we’ve managed to create at activpayroll is a result of the excellent communication and team spirit I encourage through a number of initiatives: weekly email updates to the team about everything that has been going on within the company, newsletters, employee forums, but also smaller things such as summer BBQs, bake sales, and Christmas parties.
I have an open-door policy in the office. I think it is very important and it works well. Everyone knows that they can come to me directly, regardless of their position in the company, which means there’s easier access to informal discussions. It’s also a great way to stay in the loop without going through various communication levels.
What is your leadership style now?
I would say my style is rather democratic. I like to ensure everyone has their say in all decision-making processes, whether this is to do with an ongoing project for a global client or smaller things such as ideas for charity activities for the team to take part in. I believe that allowing employees to have their say shows that they are valued and contributing to the overall vision and goals of activpayroll.
What strategies do you use in team-building?
Throughout the years, we have implemented various team-building initiatives and activities; however, in 2015, after identifying a need to grow and develop our employees, we launched the very first in-house payroll training academy in Scotland in collaboration with the Chartered Institute of Payroll Professionals (CIPP). The academy gives employees the option of gaining prestigious professional qualifications whilst working. Creating professional development opportunities such as this means employees are tackling something as a team and have each other on hand to help.
The launch of the in-house payroll academy has brought not only a new way to build relationships in the team, but a number of rewards and successes for the organisation. The Edinburgh and Aberdeen payroll academy trainees recently received their Payroll Technician qualifications, with everyone scoring an impressive 91% or above, exceeding the national average pass rate of 78%.
What are some of the most challenging aspects of leading a team in global payroll and some ways to overcome them?
As we are headquartered in Aberdeen, it is often hard to find the right employees in our overseas locations when I can’t physically be there to meet them. One of the most challenging areas I’ve encountered in business is taking on the wrong people, putting all your trust in them, and expecting them to have the same values. It’s one of those things you just have to take a gamble on. I always try to visit our global offices whenever I get the opportunity so that I can meet new employees and catch up with current ones. This shows that you are a leader who cares about everyone, not just those in the headquarters office.