Global payroll has evolved from its traditional data-processing roots to become a true Center of Excellence (COE) with strategy, design, compliance, and operational responsibilities. The Global Payroll COE ensures appropriate data governance, access to compliance expertise, and regularly tests business continuity and redundancy plans for both internal and external vendor partners—all while delivering a fitting pay experience.

Strict compliance with data security and privacy laws by country is mandated, while continuously evaluating and building staff capability requires that the COE is structured to support operating and reporting models aligned with best-in-class global payroll industry operating models.  

Automation technology, a must for global payroll, promotes working smarter, not just working harder. In a virtual work environment beset by the COVID-19 pandemic, paycheck delivery requires more strategy than ever. The term “process payroll” is nearly archaic. Payroll can no longer be associated with just a set of processes that are executed in a particular order at a particular time—most of those task items can be or have been automated using self-service functionality or other means of data automation. It’s the human factor that makes payroll, payroll, just as with any other corporate function.

This three-part article series will provide an in-depth exploration of the capabilities and skills needed to manage and execute global payroll in lieu of the job requirements and expectations of the organization. In the first section, we describe the current landscape in which the payroll professional must navigate global payroll delivery, as well as illustrate how rethinking the payroll staffing model will promote effective end-to-end payroll operations—which begin at hire and continues through post-retirement.

Payroll Must Be a Strategic Partner

Most global teams start out with one or two countries within one region, or if U.S.-based, a handful of states—and grow organically or by acquisition. Growth is deliberate in a perfect world, and well thought out across all stakeholder functions. It provides space and opportunity to learn and develop in a methodical way. That’s the ideal world—or is it?

Practitioners know that payroll teams are often positioned to be the last team to learn of the new acquisition or of a new employee in a new state or country. In reality, the Global Payroll COE needs to demand a seat at the (virtual) table where these decisions are made to ensure end-to-end compliance in delivering pay. While payroll staff have adeptly demonstrated reactive skills, we recognize we must build a critical influencing capability to position ourselves as proactive, collaborative partners. This will ensure we can deliver the payroll accurately the first time. Cutting a payroll check is easy; cutting a payroll check accurately, timely, and with end-to-end compliance has proven to be much more challenging.

Multinational organizations tend to operate their international payrolls locally in each country. Not a bad idea at all, since in-country payroll providers have local expertise, knowledge of culture, and can speak the language the local focal points also speak. Unfortunately, most companies tend to overlook the importance of having a formalized global payroll strategy and operating model, or to staff payroll positions with experienced professionals. Organizations can position themselves for success when they invest in developing international talent to expand their footprint in a structured, compliant, and replicable way. This is pivotal to ensure there is adequate knowledge of best practices and maintain regulatory compliance to pay employees accurately and on time across the world and further enable international growth. A payroll operating model is more than outsourcing.

There is a balance between process, people, and technology that entails varying degrees of outsourcing. Focusing on just one part of the operating model (typically outsourcing) is common, and results in hidden risks that are eventually exposed. For instance, many of us can relate to the situation in which the only payroll processor, that single point of failure, is absent unexpectedly. The complexities and nuances of global payroll can't be understated when considering the risks, justifying a holistic payroll operating model where people are pivotal.

When companies begin to grow organically or by acquisition, the race to standardize, balance global requirements with local variations, gain efficiencies, and take advantage of economies of scale becomes prioritized. One way or the other, global payroll teams develop, and this is where global payroll leadership is critical. Establishing a Global Payroll COE provides opportunity and time for payroll to learn compliance and variations in each country, navigate payroll vendor partners, and design a strategy to accommodate flexibility toward future growth of the business.  

While the Global Payroll COE is a not-yet-recognized best practice, our global community can influence the need with one fundamental mission: to pay employees accurately and on time, with appropriate governance that ensures reduction of errors and removal of single-person dependencies, increases job satisfaction, and, most of all, ensures the positive employee experience of accurate pay across the globe.

Balancing Accuracy With Efficiency

Although improvements in technology over the last 10 years have enabled more processing volume per payroll full-time employee, accuracy may suffer when automation and new policies are implemented in the absence of a payroll compliance lens. On her Women in Payroll podcast, U.K.-based payroll consultant Kate Upcraft said, “[sadly] there is not enough interaction between teams using the expertise of payroll specialists to understand risks of new policies and the best way to deliver the outcome that is right for the company and employees. There is still a huge assumption that all we do is data input.”

There are two sides of this challenge.

On one hand, the technical knowledge required of payroll professionals is underestimated—and on the other hand, global compliance training and materials are difficult to find and expensive to secure. In the absence of a solid COE structure, payroll professionals are left to follow outdated internal processes.

In today’s landscape, we see overreliance on payroll vendors for out-of-scope services, and payroll teams are spending excessive amounts of reactive time researching tax and labor laws to ensure compliance and reduce risk. The solution to the two-sided dilemma is the COE, with trained professionals not only in technical payroll skills, but in critical and essential “soft” skills. For example, communicating effectively, influencing without authority, change management, vendor partnerships, and demonstrated comfort in cross-functional collaboration are just a few behavioral skills essential to a successful, highly-effective global payroll team.

Global Payroll Responsibilities

When thinking of the challenges in creating a high-performing global payroll team, it is abundantly clear that change is needed. On her podcast, Upcraft said, “those of us in senior positions need to keep shouting about the fact that this is not the job that was back in the 1950s.” From job descriptions to benchmarking, “payrollers” must take the lead and transform the perception of payroll as a COE.

As evidenced by comparing job responsibilities with requirements to perform in the role, there is a clear—and wide—gap. Remembering that the general expectation of the payroll COE is paying people accurately and on time, below we will marry the essential elements of processing payroll at a high level (i.e., operational activities, compliance and administration, data governance, and system administration) with typical requirements of the position. 

Table 1 examines criteria found on a current global payroll operations specialist job posting. The column on the left mirrors the responsibilities, and the column on the right mirrors the requirements for this same position. The job knowledge and skills required to perform such a multi-faceted role, leveraging effective communication and influencing skills across all levels of the organization, is obtained through years of mentoring, training, working through challenges, and multiple year-end processes under solid payroll compliance leadership. Typical overall responsibility includes leading end-to-end payroll processing activities such as maintenance of payroll information; collection, calculation, and entry of data; check distribution; retroactive pays; front-end edits; compilation and analyses of payroll data to ensure availability of audit-ready records; and much more.

To say that these requirements do not adequately cover essential competencies needed to perform the role in our job descriptions is an understatement. In most cases, few candidates with fewer than five years of experience could meet the demands—yet payroll positions continue to be posted as entry-level steppingstones. We have also noticed that only in the scope or the brief introduction in the job postings is there ever a mention of country coverage or footprint—unless the role is for a specific region.

Table 1—Sample Global Payroll Operations Specialist Job Posting

Assessing Skills, Competencies

As the global payroll profession continues to evolve, we need the best staff available to support our growing multinational footprint. With the change in expectations toward payroll professionals, availability of staff is scarce and development plans are a challenge. This calls for a renewed look at the set of skills and competencies needed to build a world-class staffing model, to change and meet expectations. We need to rethink how we position payroll professionals in the job market and grow talent that enables us to be the strategic partner organizations need today. Establishing a Global Payroll COE, complete with a strong payroll bench that includes multiple specialty roles, will prepare the organization for success in any arena.

Stay tuned for a deeper dive into this topic in the next two articles. We will explain why the current landscape does not adequately meet the needs of our current global arena, the amazing opportunity the global payroll community has to influence the future roadmap of the profession, and how we can do this together.

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Judy Hamilton is Director, Global Payroll at UKG (Ultimate Kronos Group) whose passion for payroll runs deep as she loves to learn about effective leadership and organizational development to stay aligned with company strategy and ways to develop talent in order to build a best-in-class global payroll organization at UKG.  She is a member of the American Payroll Association’s (APA) Strategic Payroll Leadership Task Force (SPLTF) Global Issues Subcommittee.

Deborah Fallon Piacitelli, MBA, CPP, Global Payroll Management Certification, is Global Payroll Compliance Leader at W. L. Gore & Associates. She has been leading the payroll function for more than 20 years for both privately held and publicly held organizations. Piacitelli is a solid payroll technician with substantial experience in compensation, benefits, equity, and accounting. Piacitelli’s current professional initiatives include building harmonized payroll processes across the globe, developing audit-ready payrolls, standardizing and automating repetitive tasks, and developing a high-performance global team.

Max van der Klis-Busink, RPP, is Global Payroll Solutions Manager at Shell’s global headquarters, The Hague. Over the past 14 years, he has held various roles in global payroll and has been active in developing the profession. He holds a Bachelor of Business Administration in Human Resource Management and is a Registered Payroll Professional (RPP) in The Netherlands. Van der Klis-Busink specializes in building payroll functions that continue to adapt to ever-changing business needs and has developed a holistic approach for global payroll management. In 2018, he was the first recipient of the Global Payroll Management Institute’s (GPMI) Global Vision Award.