In Part I of this article in the January 2019 issue of Global Payroll, we discussed five tips to ease your transition into global payroll:
- Get a global education
- Determine your payroll model
- Design your organization
- Obtain stakeholder engagement
- Calculate your disbursements
Let’s explore additional areas to consider as you taxi down the runway on your global payroll adventure.
Leverage Subject Matter Experts
When I started my global payroll journey, there were no resources within my company to provide guidance. Because we were expanding globally, and with no existing subject matter experts, I knew I had to use some external consultants.
When you outsource global payroll, first ask your outsourcing provider what consulting, if any, it can provide. Depending on the type of provider or the type of contract you have, they may be limited in what forms of assistance they can offer.
You can also consider extensions of your provider. For example, if you use a global payroll aggregator, it’s possible the in-country providers they use may be able to provide extra consultative services. You could also search for employment and tax consulting firms. Or, use your networking skills and lean on your Global Payroll Management Institute (GPMI) colleagues to guide you in the right direction.
There are many areas with which you may need external assistance:
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When going global, the implementation milestones for the project life cycle are identical to any type of solution implementation. However, through each life cycle phase there are some unique concepts to consider when working on a global footprint. They relate to:
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Requirements and planning
- Collect requirements from stakeholders at the enterprise level as well as at the country or regional level
- Be sure the plan reflects or complements the project plan for your vendor or provider. Their plan also reflects tasks and timing for in-country providers, and everyone’s schedules need to align.
- Plan early on how you will approach funding. Who is funded? In what currency? (Editor’s note: Revisit Part I of this series for additional detail.)
Design
- Research the setup requirements for earnings and deductions. Most countries do not have an equivalent to the U.S. Circular E (IRS Publication 15), so plan ahead to find taxability and reporting requirements for each country.
- Reflect handoffs that may exist between enterprise or global functions with remote or local teams. If a North America-based process relies upon an Asia-based input, the time difference may impact a process flow.
- Design the payroll calendar to reflect holidays for all countries involved. This includes, but is not limited to, the country your team is based in, the country your payroll provider is based in, the country the employees are in, the company that houses the bank account that is used for funding, and so on.
Testing
- Consider extra testing time with the in-country provider (ICP) if your payroll solution is with a payroll provider that uses ICPs
- Account for time to integrate with local or in-country benefit vendors
- Identify testing responsibility between you, your payroll vendor, and any in-country providers
Deployment
- Understand the required payroll registrations for each country
- Reflect each country’s requirements in communications and change management. This not only includes reflecting any language requirements but also validating that it reflects employment agreements and contracts.
- Write and publish procedures that are in the correct language and are accessible to all individuals around the globe who need them
- Ensure that your data storage plans comply with each country’s requirements. Ask questions to know whether data leave the country, or if it must be stored in the local language.
Understand Your Registrations
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Registrations is an area in which U.S. knowledge didn’t go very far. It’s not just about having income, unemployment, and social tax accounts. Statutory taxes, benefit plans, and pensions are country-specific.
Some of the more unique concepts about registrations outside of the United States are as follows:
- Employee and employer registrations—Some countries have both employer and employee accounts. Furthermore, the order in which you register for the different accounts is important.
- Ink signatures—Some countries do not have electronic enrollment, so you have to secure ink signatures on paper (regardless of where in the world your officers are)
- In-person registration—If getting ink signatures wasn’t hard enough to coordinate, a country may require an in-person registration by an officer or legal representative
- Company seal or chop—A country may require that a seal or chop be attached to the registration, so make sure you know where your company’s seal or chop is stored
If this is your first time expanding global operations and you don’t have in-country payroll expertise, you may want to consider seeking a third-party consulting firm or consider asking your payroll provider if it provides those services. As mentioned previously, there aren't a vast amount of payroll instructions in English, and this is an area that may raise financial risks if improperly done.
Plan for Change
There are multiple areas of change management to consider. Based on the model and solution highlighted in Part I, you will need to provide training and communications to employees and managers. Information should be provided to explain the service delivery model to them: how they request information, whom they call with questions, and where they can access pay statements.
In addition, a change management plan focused on the payroll department should also be developed. Before job-specific training can be delivered, communications should be shared that explain any changes to employees’ jobs and an overview of the new service model. The training to be delivered should have multiple focuses:
- Function
- Culture
- Time management
If the team is new to working with or supporting global team members, time should be invested to train on the new culture and language differences. Even if the non-U.S.-based team members speak English, it’s probable that English is not their first language.
Caroline Bologna details “50 Americanisms That Don’t Make Sense To Foreigners” in a HuffPost article. For example, one oft-spoken phrase sure to confuse is “yeah nope.” Teaching U.S.-based individuals to speak a “simpler” English so that it’s understood by others is helpful to developing a high-performing multilingual team.
Reap Personal Benefits
Finally, embark on this journey knowing that it will result in personal benefit and career growth. One of the most enjoyable benefits I experience is lifelong learning. During every day of my global payroll journey, I learn something: payroll rules in a country, holidays in a region, tools for time management, etc.
I have also fine-tuned my time management skills. Supporting or working with teammates around the globe demands a higher discipline of time management. Meetings might be early in the morning as well as late at night, depending on what regions you work with. It’s not just a matter of clock hours, but days of the week have to be considered. Some countries in the Middle East work Sunday through Thursday. These types of variables put your time management skills to the test. And, hopefully, you’ll have the benefit to travel the world and experience new countries and cultures first-hand. Even if you don’t travel, though, you will learn so much from working with people around the globe.
With the topics covered in this two-part article, you are now packed and ready for your global payroll adventure. Considering all of this: Be receptive to learning. Ask questions. Seek assistance. Network with colleagues. Partner with your vendor. And, most of all, enjoy the journey.
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Robyn Maslouski, CPP, has been a Certified Payroll Professional (CPP) since 1996. Maslouski spent many years in the payroll profession in the telecommunications, banking, and health care industries. Throughout her career, Maslouski has implemented HR, payroll, and service center solutions across 50 countries. She was named the American Payroll Association's (APA) Payroll Woman of the Year in 2013.