Essential Building Blocks to Global Payroll Efficiencies

It seems so intuitive.

You have 40 payroll providers across 35 countries. Surely there are ways to consolidate vendors and contracts, stand up payroll in new countries, scale for growth, and have visibility into compliance and risk concerns with your employee pay. Right??

These Top 5 tips from the trenches of global payroll will help you find and tap into those elusive efficiencies:

1. Skip the RFI. The global payroll market is no stranger to requests for information (RFI). The typical RFI is infamously all-inclusive, without nuance for large or small country needs and lacking a business case. RFIs consistently demand a world of fee estimates, which are seldom binding, ill-fitted for the all-inclusive scope, and dismiss numerous complexities. Payroll providers still feel obligated to respond, though RFIs are almost always sent too early and represent a client’s great idea turned into a fishing expedition with little mandate or funding.
2. Build your buddy list. Rarely is there a single owner for payroll in an enterprise. In most companies, payroll reports to HR in some countries and Finance in others. Payroll services and full time equivalent (FTE) resources can often get mixed in with staff and budgeted as part of the business unit’s in-country operations. Only your largest countries are “on the radar” of your procurement (payroll vendors) or IT (payroll systems) departments. Rather than distress over the lack of a single owner, take time to make a broad network of friends. All levels of the corporate organization chart need to buy in to the value of change, if only to be a better corporate citizen in a more strategic relationship. Forging new bonds in the company is important; beyond the challenge of adopting a new payroll is the even greater challenge of funding it.
3. Know your global platforms. Because payroll often runs on a shoestring, quantifying cost avoidance is critical to building your business case. Get to know your HR information systems, timekeeping, and general ledger platforms, as they all interface with payroll. Corporate projects to expand these platforms means that there will be development and maintenance costs associated with their touch points to payroll. Be able to estimate the savings from these interfaces to prove your case for change.
4. Point to leakage. Sadly, the business case for payroll often depends largely on business value that is not easily accounted for in the reduced budgets of payroll operations. By far, the biggest opportunity for savings comes from abating “leakage” of payroll dollars to overpayments, retroactive changes, error corrections, and financial controls that decrease compliance and financial risk. Unfortunately, no magic formula will quantify leakage. Find the types of leakage occurring in your current payroll model, and look for isolated, known examples that demonstrate its magnitude. TPI has the tools to help you approach business value and to find your most viable business case alternatives.
5. Identify regional champions. One size does not fit all in a global payroll strategy; accordingly, the governance structure should span corporate, regional, and local levels of the organization. When setting up your governance program, be sure to define how small countries participate as part of their regional teams for both in-house and outsourced payroll models. Identify resources that already function in a multi-country or regional fashion, and if you truly have nothing in place, consider using your global payroll project team to begin tapping resources to assume broader geographic roles.

As you consider the five building blocks of a more efficient payroll model, remember that progress is not defined by your ability to push all countries into a single system, single vendor, or single model. Progress happens when you can articulate your strategy and build a business case that makes some part of your strategy actionable.

For more information or help with global payroll strategy, service provider identification, and your global payroll RFP and business case, contact us.

About the author

With more than 25 years of industry and consulting experience, Julie is an invaluable advisor for enterprises needing to evaluate and assess alternatives for multi-process HR service delivery, including workforce administration, payroll, benefits, compensation, recruiting, technology, learning, and talent management. Julie leads complex global HR assessments and transactions around the world. Prior to joining ISG, Julie worked for nearly a decade as an independent consultant, providing market research, vendor assessments, systems testing and implementation consulting to a broad community of benefits administration vendors and human resources departments. Julie started her career in human resources outsourcing, establishing shared service centers for a national benefits consulting and administration firm. She is a well-published thought leader in her field.