Payroll Insights
April 11, 2024

Everything to consider for a successful global payroll transformation

Getting global payroll transformation right the first time to successfully put your transition efforts into action.

Table of Contents

Global business leaders are facing a complexity crisis, stemming from an increasingly boundless workforce where work is far more fluid than ever before, always on, and frequently borderless. Operating across multiple regions can raise your organisation’s risk exposure, due to the complexity of managing different compliance requirements in each of the locations where you do business. When asked about their biggest payroll pain points in our Future of Payroll Survey, 43% of respondents cited compliance challenges and 34% answered the complexities of multi-jurisdictional payroll. 

Payroll complexity can develop by having disconnected systems in different regions that don’t talk to each other, making it difficult to view payroll data from multiple regions within a single view. Another contributing factor is having to accurately track the time and pay for all the different types of workers who make up your hybrid and contingent workforce, while meeting growing expectations across the business for the accurate and real-time reporting of key metrics. Another way legacy applications may contribute to this complexity crisis is by handcuffing payroll operations to a limited window of time in which they can operate. 

Take global marketing and creative staffing organisation, Aquent. This global organisation employs 5,000 people across eight countries, and paying staff from London to Sydney can mean different compliance requirements across localities. Their payroll team runs back-to-back payrolls weekly with a two-day turnaround and tight timelines to fix mistakes. While their legacy global payroll solution functioned, Aquent found itself plugging gaps with a complex web of solutions that were costly and time-consuming to manage. 

Since transformation requires multiple considerations and stakeholders, it’s important to take care in evaluating potential partners against the right criteria. Below we look at some of the most important questions to ask when considering global payroll transformation. 

What’s the right way to evaluate potential solutions? 

With so much noise in the software market, one of the the most important things you can do is know exactly what your requirements are and whether a given solution can meet them. For example, you may be currently encountering some of the following issues:

  • You may be required to add headcount and additional in-country vendors instead of having a single system to help scale alongside expansion. 

  • Siloed data may be creating inefficient processes, poor visibility for reporting across the business, and the need for more resources being used to maintain different system integrations.  

  • Batch processing can be inefficient and late and may increase with complexity as your business grows in new regions. 

  • Handling complex payroll requirements may include union rates, bargaining agreements, government contracts, and entitlements. 

  • Researching and applying applicable employment and payroll requirements can vary across regions and may increase your organisation’s risk profile.  

  • When multiple, disparate systems are in play, teams can have an inconsistent user experience and may spend additional time learning multiple systems. 

  • Teams may have to go through a variety of in-country support teams in different systems to solve problems.  

Hackett Group, Inc.’s perspective: Are you planning for both the short term and the long run?  

Before making any decisions, consider what you’ll need to do to prepare your team and other stakeholders across the business.  

Tracee Bowles, Practice Leader and Global Payroll Advisory at The Hackett Group, Inc. walks us through seven steps for a positive digital transformation outcome:  

Gain and sustain executive alignment, sponsorship, and involvement:  

A basic requirement of payroll digital transformation is the commitment and active support of the leaders of the company. This signals its importance to stakeholders and staff and validates that the efforts are worth sustaining. 

Develop a detailed business case:  

Present a thorough, realistic analysis of implementation requirements and costs, including all resources, tools, talent, and support needed to ensure timely and successful project execution. Project proposals should always include quantified business benefits, plus calculations of ROI whenever possible. 

Set clear goals and realistic expectations:  

It is important to define how success will be measured so management and staff charged with implementation share the same expectations. Identify key stakeholders and explain how they will be affected by the change. Position projects for success by allocating sufficient funds and staffing levels. 

Make sure stakeholders have a say in the design of post-transformation processes:  

Engage business leaders and HR stakeholders to understand pain points, brainstorm solutions, and uncover high-payoff opportunities for deploying digital technologies. 

Redesign processes to fully leverage technology capabilities:  

Take advantage of new technological capabilities to transform how work gets done. Use best-practice process flows and procedures to guide configuration of applications and execution of processes. 

Build digital transformation skills and competencies of HR staff:  

Drive continuous learning by leveraging the power of digital technology to continually experiment, measure results, and adjust. Provide staff with opportunities to develop their technology and data savviness as well as business acumen, agility, and change orientation. 

Deploy an effective change-management capability throughout the project, from planning through execution:  

Early identification of challenges, risks, operational impacts, and the benefits of the change to all stakeholder groups can show HR and other change leaders which actions to take. Emphasise reaching the right audience at the right time, using the appropriate tone for that group. 

HR must take a lead role in guiding business leaders through making payroll strategy and policy choices that drive positive outcomes for both the business and the workforce, while mitigating legal, privacy, and security risks.” 

Will the solution provide complete global coverage?  

As your workforce expands, whether through organic growth or strategic acquisitions, it’s important to ensure that you have a payroll system that will scale with you wherever your business grows instead of continuing to tack on disparate providers. That solution should be deployable everywhere you have a presence, even in the most remote locations. And don’t just think about how many workers you have today or where they are currently located. Instead, think about how many workers your company will have in 10 years and about allthe new locations they might work from.  

As part of that calculation, keep in mind that the increase we’ve seen in the types of work and workers in your employee population over the past few years will likely continue. That includes independent contractors, freelancers, consultants, or other gig or temporary workers.  

When considering your multi-country presence, ensure that you’re receiving the right support model. Does the vendor you will be working with offer sufficient support in all  locations where you might need it? This will be essential for all future upgrades and maintenance to your technology stack.  

Does the solution give you the information necessary to make smarter decisions? 

Good decision-making is driven by data, not gut instinct. For you and your peers to be able to understand the overall health of your organisation, you need access to detailed information such as labour costs, earnings, deductions, the number of exceptions that occurred during a pay run, and more metrics that potentially impact payroll such as new hires, terminations, and salaries. The best global payroll solution will give you and your peers the visibility you need into key metrics so that you can make decisions knowing that they are based on sound data. 

From complexity to confidence 

The key to navigating an increasingly complex world is having the right tools to not only help you work smarter and more efficiently, but also make sense of that complexity and derive meaningful insights from it. When it comes to managing the growing challenges that global payroll presents at a time when workforces are far more fluid than ever before, having the right global payroll solution is critical.  

The best payroll solution providers will be true partners who work with you to help you meet the challenges of managing global pay head on, while reducing many of the biggest pain points your payroll team currently faces. This may include helping ensure you have payroll resources in all the jurisdictions where you do business, reduce risk across operations by helping you minimise errors, or provide the data-driven insights leaders across the business have come to expect from HR. The right global payroll solution will help you turn the complexity crisis so many are facing into an opportunity to build a competitive advantage. 

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