Editor’s Note: Ruairi Kelleher is Global Mobility Commercial Director with Taxback International, a global tax specialist providing global mobility tax services, international payroll, and tax recovery. Ruairi joined Taxback International in 2012 to head up the Global Mobility Development Team for multinational clients and has successfully developed relationships with leading corporate entities worldwide. Ruairi has significantly developed the Global Mobility product base and has expanded into several other markets. Previously, Ruairi held senior positions with the ME Group in Ireland and was involved in the structuring of corporate relationships at the London Olympics in 2012. During his time with the group, he consistently grew revenues in the U.K. and Ireland from a start-up level to become a key contributor in the EMEA division.
How is the changing role of the global payroll professional—typified by greater interaction with the HR department, data analysis, and strategic planning—making an impact in the field?
Like many other aspects of global businesses, the global payroll landscape has changed significantly in a relatively short space of time. The area of global payroll is no longer monopolized by large multinationals as increasingly more often, smaller corporations are internationalizing at a much quicker pace. This has led to a rise in the number of global payroll professionals and mobile workforces—and not always by design. It has also resulted in several large software companies offering HR systems that can be easily integrated with internal payroll and offer a deeper level of analysis.
Easier access to data and more transparent systems mean that global payroll professionals can take a more long-term view when it comes to strategic planning. Having electronically integrated HR and payroll information provides a bigger picture when it comes to allocating resources and calculating return on investment.
There’s no doubt that improved technology has had a very positive impact for both payroll and HR professionals. However, while it’s fairly standard for HR systems to have a payroll functionality for home country employees, few can facilitate international payroll. This means that payroll for any employees based internationally has to be done manually, which can diminish the value being placed on these employees.
What are the emerging trends or issues that have your attention in global payroll?
More advanced systems and wider access to sophisticated technology have changed the face of global payroll. Organizations are beginning to regionalize their payroll providers to service the different markets in which they operate as opposed to doing so on an individual country basis. While they’ll keep their U.S. payroll in-house, when it comes to EMEA, APAC, etc., they need to outsource. This can drive up costs and put a big administrative burden on internal resources.
The ideal scenario is for one payroll provider to be able to service all regions. A consolidated solution reduces costs and has a better track record for transparency and compliance. The “fight for talent” challenges that international companies face are becoming even more topical, and the analytics that can be derived from software companies are crucial in being able to properly evaluate a global workforce. It is therefore key that international payroll providers are able to interact seamlessly with these systems and augment their service offerings.
Is there a frequently asked question that you think will no longer be part of the global conversation?
I think that a question we’re hearing less and less these days is: “Is this compatible with our general ledger reporting?” The assumption is that all payroll software will integrate seamlessly with HR and finance systems, so while this question was very relevant in years gone by, it’s much less so nowadays.
The rapid development of international payroll software has meant that it’s become the norm for software to be an automatic feed into existing systems to minimize any disruption or requirement for system changes.
What resources do you use to stay current on the latest trends and legislation in global payroll?
I use a few different resources in the course of my work so that I can keep abreast of any new developments or legislation. My first port of call is always our in-house and in-country expertise as we have a global team comprised of tax and payroll specialists. A specific part of their remit lies within research and development, so they’re always first to have updates about any changes in processes or legislation that will affect what we do. I have a weekly briefing session with the wider Global Mobility team, which is the forum for any new information to be discussed.
Our team members belong to several tax bodies and have a formidable set of qualifications. The strong tax background of The Taxback Group gives us an advantage that most other global payroll providers don’t have when it comes to multi-jurisdictional compliance.
Our staff members are part of the CPD cycle, so they are committed to ongoing professional development and learning. I also find that LinkedIn is a very useful tool for sharing information and getting industry updates. I’m a member of several LinkedIn groups that can give key insights into global payroll trends and topical debates.
The American Payroll Association (APA) conferences also offer a good opportunity to network with similar people in the industry and talk to our U.S. clients face to face.
How would you advise someone whose company is just beginning to expand to a global payroll with regard to risk management and compliance?
First and foremost, I’d advise them to be hyper-aware of the potential pitfalls or challenges that can sometimes trip up new companies and even sometimes established companies. In the course of providing our international payroll service, we’ve engaged with some companies that made errors with tax and social security payments that can cause internal issues for staff and also substantial fines.
International tax, employment, and social security laws can be complex when one is unfamiliar with the particular country or region, so I can’t emphasize enough how vital it is to engage the right company to guide you. However, if a company is entering a lot of new locations, it may need to have multiple providers for payroll. This can obviously lead to confusion and often to considerable expense. That’s why we’re always trying to get people to consolidate their international payroll so that they’re dealing with just one provider and don’t have to deal with language or time-zone barriers.
When it comes to payroll, the worst-case scenario is that an employee doesn’t get paid on time, so you really need to avoid this happening. Outsourcing the international payroll can remove the administrative burden so that you can concentrate on your core business and have peace of mind that your employees are getting the correct amounts paid on time.
Employee tracking is an area that I’d advise companies to get a handle on, as this will make sure that you have all data to hand to HR and finance to ensure that the correct compensation packages are in place. This can be especially crucial at the onset of expansion, as most companies will send senior executives on assignment to initiate the expansion and fall foul of the assumption that there are no local requirements from a withholding perspective for 183 days.
How can a global payroll department integrate on a strategic level with corporate finance, HR, and other departments to provide a competitive advantage?
A global payroll department needs to be fully integrated firstly with corporate finance to make sure that they aren’t going to be negatively affected by currency movements when making foreign currency wage payments. We work with a lot of companies that have chosen to hedge against currency fluctuations so that their treasury department knows that the foreign wages will be a fixed cost. This can be a distinct competitive advantage.
There is a big argument for integrating payroll and HR software because it provides a much higher degree of transparency when it comes to employee movements. Sickness pay and benefits such as subsistence payments can all be visible and reportable from one place. I find that consolidated reporting is one of the aspects of our service that our clients value most. Increased visibility across multiple departments is vital for strategic planning. Through the course of my job, I work cross-functionally every day with people from departments like finance, HR, IT, and marketing.
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?
Because Taxback International has a global network of offices, we have country-specific specialists within each of the markets in which we operate. It’s a solid background for designing and developing products.
We maintain a global view when it comes to risk and compliance. If we see a threat in one particular country and region, we look to how it could affect other regions and take the appropriate action. We have a global commitment to compliance that is an inherent part of the company structure. Along with internal structures, we ensure that we engage in external oversight and governance through the ISO framework and have been recognized for our commitment to excellence.
We’ve been in business 20 years, and a lot has changed over those two decades. However, we’ve also been cognizant of the need to protect against risk such as economic instability or changed legislation. While being a consolidated international payroll provider for a large number of companies, we also have over 1,000 of our own employees across the globe, and maintaining their best interests in managing risk and compliance in each jurisdiction is hugely important to us.
What global process server model do you use in global payroll, and why does this work best for you? Centralized/decentralized; regional/local?
We operate a centralized model with satellite regional locations reporting into the Head Office. The regional locations are there to provide in-depth knowledge and expertise of the jurisdiction, but the overall strategy is driven and managed from a central headquarters.
How did you become involved in global payroll?
I joined The Taxback Group back in 2012 to expand the Global Mobility Tax service. I formed strong relationships with a number of corporate clients and identified that many of them were experiencing an issue with paying their staff members in international locations. This led me to sit down with our in-house tax, payroll, and software development specialists all over the world to see how we could consolidate our global knowledge and experience and deliver a top-level global payroll product, which I felt was lacking in the market.
I could see that our historic tax background was a very relevant foundation for offering a global payroll service. We also already had the infrastructure in place to be able to offer a multi-jurisdictional service on a large scale.
What are some pieces of wisdom—your on-the-job experience—you can share in regard to being effective, efficient, and legally compliant in the sphere of global payroll?
I think you need to have a shared vision of where you want the company to go and what the future of the global payroll service looks like. Only then can you sit down and decide how to achieve the business goals. You also need to be prepared to hire the right people to fill in the gaps where you can’t. It sounds like a bit of a cliché, too, but ongoing communication really is key. Sometimes you can’t replace a face-to-face meeting, so if you think you’ll solve something quicker by jumping on a plane and meeting someone, you just have to do it.
When it comes to compliance, again it’s all about having the right people in place who know the jurisdiction in which they’re working inside out and will establish rigorous processes. This way you get the work done right and done quickly. Running different payrolls in different time zones requires a high degree of accuracy and professionalism.
What are the most important qualities of effective leadership?
It’s vital to trust that your staff can do their jobs, so I try not to micro-manage too much. Also, as a director, while I’m happy to roll up the sleeves and get stuck in, I also have to know when delegating a task is a more efficient use of my time. As a leader I work hard, and I expect the same from my team. Open and honest communication is fundamental.
What is your leadership style now?
I’ve got a pragmatic approach; I’m good at separating the wood from the trees and seeing what needs to be done and how best to go about it. I’m very organized, so I’m quick to assign tasks and milestones.
I’m driven by the satisfaction of my clients—I’ll do everything I can to make sure that they’re being serviced properly by everyone on my team who is interacting with them, and everyone shares my commitment to compliance and quality.
Share your views on the strategies you use in team-building.
When it comes to team-building, it’s vital to make sure that everyone shares a common goal and is aware of his/her own role in trying to achieve it. When putting together a team, fitting into the company culture alongside the expertise is hugely important to me. From a tax perspective, historically, the profession is seen as quite stringent and straight-lined. I encourage our team to be innovative in constantly developing our global payroll solution to be user-friendly and relevant for our clients. I also make sure that the strengths of each person are being utilized properly and that there’s a group understanding of responsibilities and the long-term vision and values of the organization.
I have strong leadership skills, so I often lead the task, but if it’s an area that another member of the team is strong on, I’m happy to delegate.
What are key qualities you look for in people you hire?
The key qualities I’m on the lookout for when hiring are intelligence, integrity, commercial awareness, flexibility, and professionalism. I also want to make sure that the person will fit in well within our company culture.
What are some of the unique aspects of running an efficient and effective global payroll operation?
In-house, purpose-built systems provide a solid foundation for the provision of an effective global payroll service. We have a team of developers, designers, and IT specialists who came together to create our tracking and reporting technology, which is one of the cornerstones of our service. When running global payroll, your company also needs to have a global scope so you can offer multi-jurisdictional expertise that is fully compliant.
What are areas of additional education and training you think will be important to global payroll professionals?
A certain level of tax competency is beneficial for global payroll professionals since there are often tax considerations when it comes to employee payments and this helps to understand them.
How do you personally manage to balance work and pleasure?
It can be a challenge, particularly because I’m over and back from the United States quite often. However, while I’m passionate about my job, family time is sacrosanct and they have my undivided attention when I’m with them. I also have a keen interest in sports and attend matches whenever I can.
What books are on your reading list?
I recently finished Losing my Virginity by Richard Branson, and I’m currently reading Natural Born Heroes by Christopher McDougall.