Editor’s Note: David Reichert is Director of Product Management at Radius. His focus is on human capital management, including global human resources, global payroll, and advisory solutions. Radius manages global payroll in countries worldwide for companies of all sizes and in all industries and has developed a cloud-based software platform for delivering global payroll to its clients in a user-friendly way. Reichert has 20 years of experience in startup ventures creating and launching consumer and business web applications.
How is the changing role of the global payroll professional—typified by greater interaction with the human resources department, data analysis, and strategic planning—making an impact in the field?
Greater transparency of information and improved visibility into payroll activities through technology is changing the role of the global payroll professional. Compliance and risk management are rising in importance and are exposing payroll’s role in the organization. Professional expectations of global subject matter expertise, long-term strategic vision, planning, and budgetary oversight continue to increase. The overarching impact is that opportunities for skilled global payroll professionals are increasing dramatically.
What are the emerging trends or issues that have your attention in global payroll?
The trend is toward HR, payroll, and advisory working together as teams on global payroll. The client successes I see for well-aligned HR, payroll, and advisory teams are dramatic. In growth markets, you can sense in the first 20 minutes of a conversation that a team will be successful managing toward its goals. People make all the difference, and I have seen a good team do incredible things for its organization.
What question will no longer be part of the conversation with global payroll vendors in the future?
The notion that payroll is a vendor/service relationship has passed. It is much more of a partnership and relationship focused on the client’s goals and long-term plans. As legislation and compliance rules proliferate, it’s critical to find a partner who is well versed in and staying on top of global payroll regulations. A failure to do so could make your company vulnerable.
What resources do you use to stay current on the latest trends and legislation in global payroll?
Having people on the ground in the countries in which you are working is critical. I rely heavily on my global relationships to stay up to date. I talk with staff and teams around the world daily, but I also use our dedicated research teams within Radius who focus on global compliance to keep me informed of pending legislation. Radius has a knowledge management team that scours resources for regulatory change that affects companies doing business internationally. We also have offices in seven countries and employees stationed all over the world.
How can a global payroll department integrate on a strategic level with corporate finance, human resources, and other departments to provide a competitive advantage?
We call this the “international expansion team.” Companies that are the most successful in selecting where and when to expand and then setting up compliant and efficient international operations have a strong cross-functional team in place. We wrote a how-to eBook on the topic called Winning Globally: A Playbook for International Expansion Teams. Building the maturity model for aligning departmental objectives is helpful. This involves aligning the priorities and revisiting the model and the achievements. Payroll professionals can drive change this way and improve the strategic visibility of payroll in their organization.
How would you advise someone whose company is just beginning to expand to a global payroll with regard to risk management and compliance?
I have been presenting web events on this topic, which has become somewhat of a crusade for me. You must have a plan, a process, and tools or software. Sounds basic, right? Often payroll is very reactive, and these three critical factors must align, so establishing a global plan and an escalation process with regular governance meetings is critical. I like to talk about managing global payroll in the life-cycle of a company as a “maturity model,” or a phased plan to put processes and staff into place as you expand your international operations. As a company grows and expands overseas, more standards and processes need to be in place.
We always advise our clients to take the long view. No matter what your growth goals are, you want to be prepared for the best outcome, and that can mean either exponential growth in number of international employees, an initial public offering (IPO), or an acquisition or some other corporate event. In any of these cases, you want all your compliance ducks to be in order to minimize risk, both financial and reputational.
What is the one thing that happened in the past year that you didn’t see coming but has had a most profound impact on global payroll?
Global payroll is a subject of constant change. However, as a community, we are rather averse to change. I find my clients and teams need more lead time to adjust to change. In response, I am spending more time talking about expected changes long before they actually occur—as much as six months in advance.
Is it possible to have a single global payroll solution and service?
Yes, we at Radius provide a single solution for global payroll, as well as comprehensive HR and finance advisory services and managed services for multinational companies.
What are the biggest challenges for global payroll teams?
There is truly no downtime. The clients I work with work very hard with difficult hours across global time zones. They command my respect daily.
What countries are the most complex for global payroll and how do you prepare for them?
I have a special fondness for France and Brazil. They are notorious for being difficult, but we rise to the challenge. I don’t have enough space here to give details on how to prepare for payroll in these countries, but the overarching theme is to give yourself appropriate lead time for each—up to six months.
How would you describe your present strategy with regard to managing risk and compliance on a global basis? Are there different approaches you’ve taken over time before adopting your current strategy?
For global payroll, I use and also recommend our internal advisory team of subject matter experts. The role of advisory is critical to global HR and global payroll. Often you must correct issues prior to payroll or properly establish appropriate entities, employment contracts, or convert contractors. It’s recommended to fix first as opposed to later. I consider HR, advisory, and payroll as the three pillars.
What are the key considerations in managing risk and compliance across your annual timeline?
There is one key to managing risk annually: Have a compliance calendar set ahead of time so that nothing falls through the cracks. Having such a tool in place lets me sleep much better at night.
What global process server model do you use in global payroll, and why does this work best for you?
Whether to go with centralized or decentralized varies from company to company, and depends a lot on the capacity to manage one or many. We find that the more countries you are in, the more likely you may be to choose a centralized model to save time and minimize risk. This relates directly to the maturity model I mentioned. The model informs the right time for each step forward.
How is technology helping global payroll become more strategic?
Technology enables several options for an organization: transparency via a single system of record, user management and process controls, data history and reporting, and lastly, integration of systems. The challenge is the maturity model the organization develops to prioritize stages with initiatives to meet their strategic goals.
With technology and data-driven HR decision-making emerging, how do you see the role of the global payroll professional evolving?
Historically, the payroll professional was viewed as part of the transaction, or process, of payroll. The opportunity payroll professionals have is to move into strategic planning and delivery on these plans. This is clearly happening in companies I work with, and organizational structures are reflecting this change.
How did you become involved in global payroll?
I had a background in international business with large clients that included billing and payment systems and eventually HR systems. This led me into global payroll.
What are some of pieces of wisdom—your on-the-job experience—you can share in regard to being effective, efficient, and legally compliant in the sphere of working in global payroll?
The slogan “when you see something, say something” comes to mind. Often you see something and assume it is OK after others have reviewed it. Trust your instincts and speak up. There are many global requirements, including documents with specific data-gathering checklists, not to mention filings and reporting deadlines.
What kinds of training and education would be most useful for someone moving from domestic to global payroll?
A background in international finance and technology is helpful. I do work very closely with tax and finance specialists around the world, but am not a CPA myself. A lot can be learned from your peers and co-workers, and planning time to learn a global market should be accounted for.
What non-payroll-related education or training would be most useful for an individual moving from domestic to global payroll?
Working in or with other countries and cultures can be helpful just because you’re sensitized to variations from country to country.
What are some of the skills you bring to your position that are particularly suited to a position in global payroll?
I had a lot of exposure to various elements of global payroll, so the pieces fell into place for me. I came to payroll through HR, compliance, and payments, so I think my approach is more or less integrated. I tend to look at the whole “pipe” of inputs and outputs and less on the transaction itself. I also am very aware of the employee as the most important stakeholder.
What are the most important qualities of effective leadership?
Respect the team involved and listen, then let them do their job. I try to get out of the way as much as I can. I spend the majority of my time with the front-line departments talking to clients and working with clients.
What is your leadership style now?
As hands-off as I can be and as close to the clients as I can be to better understand what they need and deliver on it.
What strategies do you use in team building?
I believe in mistakes; a good team needs freedom to make a few and then get better. So I believe in process models and process improvements, but I do not believe in perfection or criticism without process improvements and methods. Again, it is the stages of maturity models that I have seen work for teams.
How has your approach to change management helped to make a successful organization?
Good governance drives the process resulting in a good team. So the maturity model and the stages of that model are informed by a governance group. The objectives and milestones of each stage are set along with process improvements, but the governance group steers and suggests changes. Good governance keeps it dynamic.
What are some of the most challenging aspects of leading a team in global payroll and how do you overcome them?
Distribution of resources around the world provides the coverage needed, but it is challenging to manage, update, and align staff across time zones. It is expected and required, and we all must do it, from Beijing to Sao Paulo to Mumbai.
What are key qualities you look for in people you hire?
I look for this trait: curiosity about the world. I have associates who work with me, and we occasionally meet for coffee to discuss things we’ve researched: changes in Japan, new rules for Brazil, etc. These are people eager to learn and obviously very interested.
How do you personally manage to balance work and pleasure?
I have to clear my head after being on the phone day and night. So I have to work out or run as often as I can.
What books are on your reading list?
The Creative Habit by Twyla Tharp has changed my thinking about creativity and software solutions in general. It is unexpected—but discipline is a tool of creativity.