How payroll leaders are overcoming the challenges of global payroll

Work has become increasingly borderless as more and more companies’ operations are spread around the globe. EY reports that 60% agree or strongly agree that a truly global payroll delivery model would bring significant benefits to their organization.

The reality is that managing a global workforce is complex, particularly when it comes to things like pay. Keeping up to date with the rapidly changing legislative requirements, for example, is a massive undertaking. So is ensuring that payroll is not only always accurate and on time, but also a source of strategic insights that help drive business decisions across the organization.

To better understand the challenges that global payroll teams face and the strategies they’re using to overcome them, we hosted a panel discussion at our recent Ceridian World Tour.

Below are some of the insights Ceridian customers Heather Hetterick, Global Director of HRIS at Multi-Color Corporation; Julie Fernandez, a Partner at ISG; and Dan Staley, a Principal at PwC shared during the discussion, including why they believe using a single payroll solution is critical for an effective approach to global payroll.

In your experience, what are some of the biggest pain points driving the need for global payroll?

Julie: It’s a bit different for everyone, but generally speaking, payroll teams are looking to be more efficient, while also remaining compliant and ensuring that their data is secure. Of course, that’s not actually happening everywhere because so many companies rely on different vendors and technologies in each of their locations. If there’s been any positive outcome from the pandemic, it’s that it has forced organizations to take a closer look at their operations and to find opportunities to simplify and consolidate functions like payroll.

Dan: For us, an important driver is a desire for consistency. Companies want to have the same processes, capabilities, and user experiences in all of their locations. But it’s really hard to create consistent user experiences if you’re working with different payroll vendors in different markets.

Heather: That’s definitely been true at Multi-Color. We’ve gone through a lot of M&A activity, which means we inherit different vendors, processes, and ways of doing things with each new acquisition. That, in turn, has created a lot of friction points, which we’ve only been able to address by adopting a single global payments platform. Another important driver has been our desire for accurate, on-demand pay data so that we can make more informed business decisions. You just can’t get that without a single global payroll solution.

It sounds like compliance, consistency, and consolidation are all big pain points. Are there other factors driving companies toward global payroll?

Heather: Another important one is the desire to implement a people-first user experience that empowers employees to engage and self-serve. That’s kind of the Holy Grail because it’s the key to unlocking greater efficiency and employee satisfaction. You want employees to have the same experience no matter where they sit and to be empowered to get whatever information they need anytime they need it.

Is getting global teams to use the right technology to overcome these pain points hard to do?

Heather: No, but it does require you to take stock of where everyone’s at.

Julie: Exactly. When you look at global workforce, it’s important to recognize that people are often in different places. Payroll teams in some countries won't have any HR system at all and rely on spreadsheets instead. Meanwhile in other countries, they might be far enough along to need workflow processing or already be embracing automation and the latest innovations. It’s a journey, but over time the key is to establish a global standard so that everyone is using the same technology no matter where they are.

In your experience, when does it make sense to use managed services to supplement and support global payroll functions?

Dan: Every company is different, but in my view, outsourcing makes sense when your organization is expanding globally and you’ve got a relatively small headcount in each individual country you’re expanding into. The fact is that with global regulations changing so rapidly, it’s hard to keep up with everything that’s happening in each individual location where you have boots on the ground. I always say that if you have a partner who can do that for you globally using a single technology platform, you should at least consider it as a way to drive efficiency, while ensuring consistency and compliance.

Julie: I think it’s also important to point out that outsourcing payroll doesn’t mean getting rid of your staff. It’s about using technology to enable payroll processing so that you can then reallocate resources and get payroll teams focused on doing higher-level work that delivers greater value to the business.

What strategies do you recommend for any company embarking on a global payroll transformation?

Julie: First and foremost, you have to understand your stakeholder landscape. There are a lot of people involved in a global payroll program in and outside of HR. You need to know who does what in each location, who your champions are, and how to navigate all of that. It’s also important to know who all of the local providers are that your company works with, what they do, and how. It’s definitely not for the faint of heart because you can easily get lost in the weeds. That’s why I think it’s important to have a strategic partner who you trust and who can help guide you through that journey.

Dan: I agree. As you move into new countries, you need a global strategy. Having a partner who has expertise in each market you enter and can help you stay on top of the regulatory requirements and other considerations in each of those markets is critical.

Heather: You also can’t underestimate the importance of change management. Even if you you’re adopting the best tool with all of the latest bells and whistles, unless you’re marrying it with an effective change management program across the organization, it just won’t get used the way you intend it to.

Where else can payroll leaders run into trouble?

Julie: The first place where you feel pain is deployment. So often, people are used to doing things a certain way and aren’t always open to changing their approach, even when there’s a regulatory reason to do so. I think this really speaks to Heather’s point that change management is so important with big deployments. You’ve got to bring people along on the journey and get local support in every market where you do business.

Heather: That’s right. You have to have champions in every region to help support you and to be in constant communication with them before, during, and after deployment.

Dan: I think another pitfall is not having a global sponsor to help drive the initiative forward. You want someone with real influence in the organization who is going to be vocal in helping advance the project. It’s also important to have the right resources on the project and to have guardrails in place so that you always know what’s in scope and what’s not.

Finally, how do you get business leaders to see payroll as a strategic function that delivers real value to the business?

Dan: It’s all about demonstrating value, and when you’ve got a single payroll solution, there are lots of ways to do that. In some cases, it’s by delivering data-driven insights into important issues like managing labor costs. In others, it’s by delivering innovative solutions like Wallet that enhance the employee experience by giving them greater flexibility. In still others, it’s about risk management and showing all of the potential fines that you’ve avoided by ensuring that your payroll practices are compliant with local regulations. Every payroll team can become a strategic business partner when they've got the right platform to help make it possible.