Future-proofing your global payroll operations requires enacting a robust and scalable global payroll strategy that addresses a number of key areas. Knowing what to include and putting it in place may seem like a daunting task, especially for organizations with extensive global coverage or confirmed plans for expansion over the next few years–all of which needs to be taken into account.
When outlining your global payroll strategy, you need to define the future state of your payroll operations and what success looks like for your organization. What is the end goal? Are you currently in a position where you need to streamline and consolidate your global payroll operations? Do you know what areas of expertise and knowledge are required in order to further advance the function? If you do have a global payroll provider in place, do they have the capability and knowledge to evolve in line with the needs of your global business? These are all fundamental questions and important points to consider in formulating your global payroll strategy.
So, where do you begin?
Your 5 Essential Areas To Address
There are a multitude of areas to address in your global payroll strategy. Some of which can be outlined as follows:
1. Payroll effectiveness
Making sure staff are paid correctly and on time no matter where they are in the world is the principal key performance indicator for any payroll function. When looking at your payroll effectiveness, you need to consider several factors. The priority being your people and if you are adequately set up to support the needs of the business as resource requirements change from location to location. In addition, you need to consider the role of continuous improvement. Making sure you are working with knowledgeable people, both internally and externally, can have a huge impact when it comes to gaining a greater insight into global payroll best practices and setting up for success. In order to have an effective payroll, you also need an effective relationship with your global payroll provider. Ensure that you look at the customer support levels being offered and whether these meet your current and future needs.
2. Global compliance
As stated in Business & Finance, time after time, the biggest operational challenge facing payroll departments is the ability to find information on legislation and compliance. Keeping up to date with these changes from country to country and reacting accordingly is extremely difficult. Making sure your global payroll provider has an extensive in-country knowledge network should be high on the priority list as you move your global payroll operations forward. Failing to have that level of local knowledge will leave you open to noncompliance and can be costly when fines are imposed.
3. Supporting technology and processes
Enemy number one of global payroll: Disparity across payroll processes and technology! Quite often, this is the root cause of multiple issues. Some companies are dealing with a number of different systems and suppliers, all of which are aimed at supporting HR and Payroll; however, they lack the integration capability, leaving you open to the likelihood of error due to manual data uploads. In addition, inconsistent processes can lead to varying levels of quality throughout the payroll cycle, meaning you may experience difficulties both locally in delivering accurate payroll, and globally when it comes to having complete global oversight and consolidating reports. These are just some of the reasons we are seeing more companies moving toward global payroll consolidation.
Technology will be key to improving your global payroll operations and streamlining processes, so making sure you have the right technology and provider in place to support your business requirements are critical. If looking at your current global payroll provider or others in the marketplace, be sure to evaluate these against the goals of your global payroll strategy. Some key areas to look at include:
- Technology: Today, companies should be opting for cloud-based technology that offers a secure cloud framework. The technology should also support process automation where possible, reducing the need for manual effort across the payroll cycle, ultimately giving your people time back to focus on other high value tasks.
- Global coverage: Find out if they cover the countries that you currently operate in and are in countries that may be on the horizon for you when it comes to global expansion.
- Real-time data analytics and reporting capability: Having technology in place that can provide you with data visualizations as well as consolidated reports in a single currency is a game-changer. Improving global oversight as a result can positively impact on wider business decisions.
- Integration capability: The chosen technology should have the capability to integrate with your HR/finance systems, ensuring a seamless flow of data and reduction in errors.
- Knowledge network: You want to work with the people who know. Making sure your global payroll provider can advise when it comes to global payroll best practices, as well as having in-country expertise, is vital. It can save on costs as well as ensuring compliance across all jurisdictions.
4. Scalability and growth
If further global expansion is part of your organization’s strategy, you need to align this to your overall payroll strategy. Again, this is where you need to evaluate the capability of your global payroll provider. The last thing you want is to work with a provider that can’t support the needs of the ever-changing global business landscape. Make sure they have the ability to implement and scale across all countries of operation that are relevant to you and your future requirements.
5. Governance framework
As highlighted by PwC, having a comprehensive understanding of the payroll-related risks to the organization and defining how to address those risks through an effective payroll governance framework is central to building a sustainable and resilient payroll function. Risk mitigation across the payroll function needs to form part of your overall strategy. With this in mind, be sure to understand and document the end-to-end payroll process from the roles and responsibilities within the payroll function to data management and gaps in the process. In addition, you should have a full overview of the level of skills and qualifications within the team carrying out the payroll processing; the technology in place; both the payroll technology and other technology that is feeding in to payroll; and finally, understand how compliance is managed from a global level.
By addressing these key areas of payroll effectiveness, global compliance, payroll technology and processes, scalability and growth, and your governance framework, in conjunction with evaluating the capability of your current global payroll provider, you can create a more complete and effective global payroll strategy. This in turn will allow you to better move the payroll function in your company forward. The wider organization will be able to see where the function is continually adding value and contributing to overarching company goals, ultimately elevating the strategic importance of the global payroll function.
If you’d like to learn more about Immedis and how our technology and knowledgeable team can support your global payroll strategy, get in touch today.
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