One of the greatest expenses for any company or organization is its payroll—a department that is often overlooked or embedded within HR or finance. In fact, it’s not uncommon for some companies to treat their payroll professionals as data entry clerks. Perhaps the payroll position originated as a bookkeeper, accounting assistant, or HR coordinator, but that is no longer the case. That outdated concept of payroll, and the role of today’s payroll professional, have evolved. Today, the payroll pro is a key player within many corporations.
Payroll has become a profession and a career for many people. With changes in company strategy alongside the establishment of a multinational presence—and the complex compliance requirements that go with it—payroll has evolved into a strategic and important vertical in the scope of an organization's business.
As the technology landscape evolves, largely due to the increasing use of automation and robotics and the addition of shared services and global support, the professionals in payroll have started to change their thought processes. Gone are the days of routine domestic payroll—performing the gross-to-net calculations and focusing only on the day-to-day operations. Payroll has crossed into a world of business strategy, data interpretation, business relationships, and continuous improvement. Through it all, compliance requirements multiply with every border crossed.
So, what does this signify for the future of the field? Global payroll professionals must continue building their skill levels in core areas to keep up with the evolving payroll function. Let’s take a closer look at the different areas of this everchanging industry.
That is an area that must have the ability to develop a vision for the future of the payroll function that encompasses the direction of the organization. This requires that global payroll professionals think in greater time horizons than the current payroll year or how to process payroll today. The payroll leader must create a strategy that is nimble and flexible to accommodate changes within the company and the countries in which they operate.
Take a Seat at the Planning Table
The global payroll leader is expected to provide leadership and input in supporting the business growth in new countries, or new types of business in existing countries. This goes a long way in helping the entire organization succeed.
Understanding payroll data at a deeper level is essential to a company’s direction and success abroad. Global payroll specialists must intimately understand the data and be able to accurately communicate and analyze it. This goes beyond statistics such as total gross pay or number of pay stubs, and requires a deeper analysis to determine the types of compensation costing your company the most and which processes are inefficient or may result in a loss.
Learning to interpret your organization’s data is necessary when discussing the implications with the leadership team. Many global companies are using some type of payroll data to make decisions related to their profits and loss. Creating a standard dashboard of the data they need with clear explanations enables everyone to interpret the data in the same way.
Remember, the data is only as good as the person who wrote the criteria to pull the report. Standardization and automation eliminate manual errors.
Creating meaningful metrics and key performance indicators (KPIs) provides global payroll the tools it needs to accurately measure current health and function performance data for your organization and to use that data to strategize future business goals. Using your data enables you to convey what is meaningful to your organization. The levels of accuracy are so high in most organizations that to add value, your accuracy metric needs to be more detailed, and that is where metrics and KPIs become important.
Using an end-to-end process approach will give you a good indication of what you should look at to tell your story. For example, late terminations resulting in an overpayment to the employee. To make that meaningful, you need to determine the root cause of the late termination. Adding a section on compliance is needed for each region or country, and the measurement of compliance is different depending on the country.
In the United States, you may measure it by looking at the notices you are receiving from the state and local agencies related to filings. But in the Netherlands, you may measure it by looking at how you have your employees listed related to social security requirements. Given that the pay cycles are different around the world, your metrics and KPIs will need to clearly articulate how you are measuring the data for each area. Using all your data to create a dashboard that you can share with your senior leaders will help guide your conversations as you communicate the health of your operation.
Keeping up with new rules for countries, states, and localities can be a daunting task. It is necessary to develop your compliance model and create a compliance role within the payroll function. The compliance model should define how to gather, track, and update the requirements by country. This should include, at the very least, compliance with social schemes, taxation, collective bargaining agreements, and required benefits. Penalties for noncompliance are at an all-time high and the tolerance by companies to accept the risk has become much lower. Expecting your vendor to be the only source of compliance will leave you in a lurch. Your company is always responsible for payroll compliance, even in an outsourced environment.
Compliance for your processes, and ultimately your payroll, always resides within your organization. You would expect your vendor to make the necessary updates to their software as the laws change for that country or region. However, depending on your payroll set up, the updates may or may not apply to your population, so it’s imperative that you know which changes are required and document those in your compliance matrix. Having a strong business partnership with your vendors will result in better quality payroll and service.
Building Business Relationships
Increasing your interpersonal skills and emotional intelligence will help you build your business acumen. This is also key to understanding how your company makes money, what drives the profitability, and the goals of your company. Of course, building those key business relationships also involves knowing your audience and speaking to their interests. Understanding your stakeholders and their business and developing a relationship with them is the key to success. To drive your function to the next level, you will need to ensure you have alignment with your stakeholders. It is important to have a good relationship with them and understand where you intersect with one another. (Read the feature article “5 Gems to Consider as a Global Payroll Business Partner” also in this issue.)
Creativity and understanding changing priorities results in the need to continuously improve your payroll process and people. Learning how to identify what needs to change and coming up with solutions to meet those changes is a necessary part of the process. Look for redundancies in your process, non-value-added steps, and manual work that could be automated. What you build today will not be the same in the very near future, so your ability to be agile and look forward is necessary.
Creating a great employee experience is an expectation. Spending time understanding your employees and what is important to them will go a long way in determining how to provide good customer service. Be empathetic and humble. Understand that you are communicating a highly complex process. Take time to listen.
Lastly, as you look at your development opportunities in global payroll, be sure to continue spending as much time developing your soft skills and business acumen as you do your technical payroll skills. Staying well rounded in both areas will keep you on the leading edge of global payroll.
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Deveri Stines is VP of Global Payroll for NielsenIQ and has more than 30 years of experience in the payroll industry. Stines has an extensive background in improving and scaling operational performance for large multinational companies—leading global teams comprised of internal and outsourced HR operations and global payroll.