Choosing a vendor is only the beginning when establishing a global payroll operation, a journey that requires navigating a diverse group of corporate stakeholders, said two shared services experts during the Global Payroll Management Institute (GPMI) webinar “Creating a Business Case for Global Payroll.”
Julie Fernandez, Partner, HR Practice with Information Services Group, presented the webinar with moderator Marianne Langlois, Vice President of Solution Design for NGA Human Resources, which sponsored the webinar. They took the audience through ownership of global payroll in an organization, how it is priced, and making the business case for the operation.
Regardless of whether payroll reports to finance or human resources, Fernandez said there’s a complex network of corporate stakeholders who all have their own priorities.
“All of them need to be engaged from the beginning,” she said. “They need to look beyond trying to pick a vendor and invest a good amount of time in cultivating relationships, buy-in, and participation that starts in the early phases and carries right through the other phases.”
She and Langlois agreed there are several factors driving organization-wide interest in a multi-country payroll delivery model—from cloud technology and shared services delivery to increasingly complex compliance.
Pricing is a major component of making a business case, Fernandez said, and an ideal global payroll solution will mean right-sizing the scope of solutions in a given country—from a service bureau or stand-alone services at the lower end to managed payroll (gross to net), comprehensive payroll (source to gross), or end-to-end payroll services.
“Your strategy can have multiple different models to it, and it’s not all-or-nothing,” Langlois added. “By putting together your model and explaining what is right for which country helps a lot with change management and buy-in to get people on board with the overall strategy.”
Both experts noted that:
- Making a global business case based purely on operations cost is unlikely
- In-country payroll staff are often allocated to other functions, making it challenging to impact headcount
- Retained staff are still needed to support activities locally or in shared services
- Knowing critical volumes (pay cycle and frequency) is crucial because economies of scale cannot happen unless there is consolidation where possible
“Going to market knowing what you want, where you want it, and for whom is really important to getting a firm idea of what your provider costs might be,” Fernandez said. “Sadly, that’s not the way most companies approach the payroll provider market. Buyers often approach the market with a big laundry list of all the countries they have and how many people they have in each country.”
Nicole Smith, GPMI’s Director of Instructional Design and Learning Development, hosted the webinar, which is available On Demand.