Editor’s Note: Bart van der Storm is a leader in global payroll with more than 20 years of experience in Fortune 500 companies. As founder and CEO of Payrollminds, van der Storm drives industry innovation and offers strategic guidance and talent development across Europe and beyond. He is also a speaker and author.
What emerging trends in global payroll are demanding your attention and what do you see as the projected consequences?
The most critical question is: Where is your data and how is it compiled or created today? It's essential to own your data and to stay ahead of changes, such as those brought by artificial intelligence (AI) and robotics.
Organisations that maintain 90% to 99% of their data internally within their databases will have a competitive advantage over those relying on third-party vendors.
How are internal controls on data providing a competitive advantage versus using a vendor?
Having all your data in one place allows you to influence, change, and manipulate it without waiting for third parties. This ownership enables the integration of technology, automation, AI, and more. Conversely, using a global payroll vendor for a significant portion of your data limits flexibility as they control accessibility and usage. This dependency can hinder your ability to grow, change, or transition to other payroll processes smoothly.
What are the chronic challenges for companies moving towards global expansion?
When expanding globally, understanding and complying with local rules is perhaps the biggest challenge, especially if we're talking about super complex parts of the world like Europe.
And it's not just adherence to laws, tax rules, and social security regulations. It’s also about knowing local processes, whether you need local representation, the required data formats, language requirements, and cultural differences.
Without the willingness to adapt to local ways, organizations will struggle. Global payroll remains inherently local despite central management. Knowing local requirements, formats, processes, and influences is crucial to avoid failures in managing global payroll.
How can a payroll department provide strategic support to corporate finance, human resources, and other departments and what are the challenges?
The primary role of the payroll team is to ensure accurate, timely, and compliant payroll runs. Additionally, the team should provide metrics and information to leadership about ongoing issues and trends, such as outsourcing, insourcing, hybrid models, and changes in pension or social security laws.
Payroll teams must also ensure continuity by maintaining sufficient resources and knowledge to handle ongoing needs. Without this, they risk falling behind, constantly reacting to issues and struggling with organizational growth and acquisitions.
What strategic advice would you give to a company moving from domestic to global payroll?
Moving from domestic to international payroll means replacing informal knowledge with formal documentation. Domestic payroll staff usually has a strong understanding of local customs and regulations. A global setting demands teams to rely on written guidelines, protocols, and procedures.
Hiring local professionals for international positions might lead to dissatisfaction due to changes in job responsibilities. Conversely, global payroll specialists may lack detailed knowledge of local practices. Managing international payroll requires specific procedural and project management skills, as well as proficiency in analyzing metrics and resolving problems.
What are the variances in response to urgencies between U.S. domestic and global payroll and how do they compare?
A U.S. domestic payroll team is likely to answer employee questions promptly and accurately, given their familiarity with local rules and personal knowledge. However, when managing global payroll, especially for countries like Germany or France, language barriers and differing processes can cause delays.
Questions from non-U.S. employees may need translation, and responses depend on third-party vendors’ service level agreements (SLAs), potentially delaying answers. Establishing trust and understanding in a global payroll context is more complex and requires rethinking management processes to address these challenges effectively.
What are the things you would like to see payroll vendors address in the next three years?
First, data handling should be tailored more to the people and organizations using the service. Additionally, vendors should provide appropriate levels of an SLA and the ability to answer queries efficiently. It’s normal in payroll for people to have specific questions, and vendors should help clients answer these in an orderly, efficient, and timely manner.
Another crucial aspect is compliance. Many payroll vendors exclude tax and compliance advice, which is problematic because compliance drives payroll. While vendors don’t need to take full responsibility, they should provide knowledge and understanding of local regulations and best practices. This helps clients maintain compliance without putting the entire burden on them.
Finally, global reporting capacity is essential. Vendors should ensure that clients can access and use their own data for gross-to-net calculations and other reporting needs. Utilizing robotics and AI efficiently to meet client needs, not just vendor needs, is also critical.
What do you see as the value and limits to emerging technology, robotics, and AI in managing global payroll?
When considering robotics and AI, the focus should be on improving existing processes rather than introducing new, exotic features. For example, automating data input, streamlining integrations from HR systems, and validating accuracy, completeness, and timeliness can greatly enhance efficiency.
Using AI to check payslip distribution ensures that the right people receive the correct information. Robots (or “bots”) can also compare inputs and outputs quickly, as a task that can take days manually may only take seconds for AI.
Additionally, AI tools can handle tier-one employee queries, such as finding payslips or resetting passwords, improving overall process efficiency. So, I'm enthusiastically in favor of emerging technology such as AI, provided the technology is used correctly and for the right purpose at the right time.
How can companies better leverage payroll data for strategic decision making?
Payroll is changing. It's now more about analyzing data and managing projects than just knowing the rules. Payroll workers around the world must master these skills to ensure everything runs smoothly.
Being able to understand and work with data is going to be important, especially for new global payroll professionals entering the industry. I recommend all payroll professionals learn how to look at and carefully analyze data to help their companies make smart decisions—like where to save money, how to keep employees happy, and how to best follow local and international laws. They also must actively participate in predictive forecasts of the business's growth.
For all this to work well, companies need the right payroll people and tools and must teach their teams how to use data properly.
How did you get started in your career?
I started working at my father’s accounting advisory firm when I was about 14 years old. He taught me accounting and bookkeeping, and I eventually handled payroll for smaller clients.
My father introduced me to payroll software, which I learned to configure and run from scratch. Back then, software wasn't really software as we know it today. But still, I fell in love with the industry and the impact I could have.
As a young kid, I was obsessed with understanding taxes, processes, and social security, which I mastered through books, articles, and tutorials. This experience gave me a deep understanding of payroll, including the nuances between different companies and their specific needs.
What have been the professional and personal challenges you faced as you moved into global payroll from domestic payroll?
As I made the transition from managing Dutch domestic payroll to overseeing global payroll operations, I gained a profound awareness of the substantial cultural disparities across various regions. It became evident that my straightforward, and sometimes blunt, Dutch communication approach was not well-received in countries such as Belgium or the United Kingdom. The process of adapting to these cultural contrasts presented a significant challenge, as it necessitated a deeper understanding and genuine respect for diverse communication styles and societal expectations.
Can you describe your management and leadership approach?
My approach is grounded in understanding the current reality of my clients—knowing where they start from is crucial. Without this understanding, assumptions about their readiness for global payroll, AI, or process streamlining can lead to failure.
Before implementing changes, it is important to know the existing processes, roles, responsibilities, and critical elements. Creating a vision is essential, but it must be based on a clear understanding of the current situation.
How do you personally manage to balance work and pleasure?
I believe in work-life integration rather than balance.
I love my work, which makes it enjoyable, but I also prioritize quality personal time. This includes reading, journaling, exercising, and meditating. Spending quality time with my family, like being present for dinners and engaging in meaningful conversations with loved ones, is also crucial. For me, it’s about the quality of time spent rather than a strict division of hours.