By Frank J. Mendelson
Editor’s Note: Vitoria Custodio is the Senior Manager for Global HR and Payroll Service Delivery at Ferring Pharmaceuticals. She is an experienced payroll manager with a demonstrated history of working in the information technology and services industry doing international payroll analysis, payroll taxes, Sarbanes-Oxley (SOX) Act controls, and multi-cultural team management. Custodio has a degree focused in Human Resources Management from ISLA—Instituto Superior de Línguas e Administração.
What are the biggest challenges for payroll teams and what do you see is projected to address these challenges?
The biggest challenge for payroll professionals is not realizing the significance of their role in any organisation. Most of the time, this realization comes when the payroll professional and the organisation recognize this significance, which then allows growth to start. Payroll combines multiple areas—such as labor law, fiscal, mobility, and finance—and our teams have great opportunities to develop their expertise and skills in areas that are equally critical and valuable to payroll. However, it is different from how other careers are planned and prepared.
Another challenge is how payroll teams are judged or critiqued every pay cycle, whether monthly or bimonthly. Payroll is performance-based, meaning the quality of a payroll professional’s work is directly reflected in each employee’s pocket—independently of their grade—and the company’s statutory duties. They are the fewest teams that, in the short term, impact all employees in a company; they deliver under tight deadlines and significantly impact people’s lives. Payroll professionals must be certain of what they are doing, ideally without margin of error.
There is a significant expectation of multidisciplinary knowledge, and if they are not properly trained, it can drain teams. Payroll teams are expected to perform excellently and to never fail or miss deadlines; that’s how payroll teams are measured. Being invisible means excellence in our area.
What strategic advice would you give to a company moving from domestic to global payroll?
Organisations must see payroll as an executive ally and an important contributor to the decision-makers’ discussion.
The payroll team can provide strategic insights, however, it’s critical for the C-suite to acknowledge payroll business acumen, their knowledge of the company’s strategy, and how they can contribute with their knowledge and overall view of each market in terms of human capital value, taxes, and social and pension schemes.
A domestic payroll has a limited view and understanding; global payroll gives an overall perspective into how a company materializes critical processes that can benefit from global procedures.
Having a harmonized strategy for a global payroll helps with procedures, controls, team effectiveness, and transparency.
What have been your experiences successfully navigating cultural and other differences on a worldwide stage?
It’s been an amazing journey, and that is the primary reason why I am still so committed to what I do. While payroll is usually seen as a mundane or routine job, I don’t see it—or experience it—that way. For example, multicultural differences, ways of work, and laws enlarge our area of expertise as professionals and as well-rounded human beings.
We learn about each country from their payrolls, their taxes, and their labour/fiscal laws. A country’s ideals are very often reflected in how their workforce is organised—in terms of focus and priorities. It is a continuous learning curve that we can only benefit from while thinking on a new way of work, especially after the COVID-19 pandemic.
What do you see as the value and limits to emerging technology, robotics, and artificial intelligence (AI) in managing global payroll?
I am willing to see how emerging technology and AI can improve and leverage payroll’s contribution. Every employee expects to receive their salary accurately and on time; we all know that. This is where we can invest in effective tools for payroll validation, controls, and links to statutory deliverables. This can save hours of administrative work from payroll and payroll accounting teams. This level of accuracy and elimination of human error can save time, improve employees’ experiences, focus on a country’s laws, and help to avoid spending money less effectively while understanding how to better invest and where.
The fact that a global payroll specialist needs to possess expertise in multiple disciplines obliges companies to hire high-level, expensive services. AI can help us work quicker and understand deeper local knowledge at a better cost, being so precise and more company market-focused rather than outsourcing. With AI, we can focus interests to a specific company, target, size, and location much more effectively.
However, this is only one example. Another advantage is the potential for identifying and eliminating fraud.
I am extremely enthusiastic to see the real benefit of emerging technology and AI, knowing that it will bring additional challenges. It is indeed a new era for payroll.
What are some of the insights as it relates to preparing for, and staying in compliance with, the European Union’s (EU) General Data Protection Regulation (GDPR)?
My organisation requires all of us to complete regular mandatory training where the GDPR is included. At a country level, as a global team operating under a business process outsourcing (BPO) model, we count on our partners—payroll vendors—to support us on this regulation, in addition to the training we offer. It’s crucial to be internally prepared, but we can’t ignore the fact that the global payroll vendors are the best ones to equip our teams regarding compliance, data privacy, and legal matters. Although we have our own resources and materials; we work in partnership with the experts to be secure that we are all aligned and up to date.
What are some of the considerations a company should have to determine if there is a good fit with a prospective vendor?
When we outsource payroll, we need to guarantee that our vendor shares the same understanding of payroll processing as we do and are knowledgeable and accountable for their service. I personally prefer vendors that can offer a close partnership with our teams, provide an intimate understanding of each country’s laws and procedures, and are available to directly address our concerns or doubts. This principle of transparency is key for a good partnership.
How can companies better leverage payroll data for strategic decision-making; will payroll data emerge as a critical analytic business tool? What additional training or education—or mentoring—is necessary for global payroll professionals to participate in strategic decision-making?
Payroll, finance, statutory training, and business acumen are all crucial to developing the payroll team’s skills to become a strategic partner. This is already there, most of the time, due to the experience they have and the data they manage. It is not always top-of-mind, though for the C-suite. Usually, payroll doesn’t have a seat at the decision-makers’ table. However, if we think deeper, we will realize that payroll teams are owners of gross-to-net knowledge worldwide. Being capable of comparing and distinguishing rules and norms in different countries, they feed a lot of the reports that are used to support decisions. So yes, if they are well-equipped with training and materials, payroll teams can contribute to the C-suite discussion and become trusted partners.
How did you get started in your career?
My academic background is in human resources management, but payroll has been included in my training since my first day as a complementary responsibility. Due to the reorganisation of the company where I was working at that time and their acquisition of new companies/services, I had the opportunity to experiment in international payroll. It was an excellent experience that helped me grow immensely, so I decided to develop my career in a leadership role. This is when I started to report to the finance team for almost 20 years. It was amazing to learn payroll from different perspectives, not only HR, and it made me develop a lot around the audit world as well.
Although I moved under the HR organisation three years ago, I am dedicated to payroll, and I am happy to once again experience the value of payroll combined with HR strategy. One of the things that I love about my role is the potential of this area being assigned to finance, HR, fiscal, or even operating independently. All these perspectives offer more benefits than risks, and this capacity of being easy to adapt and develop still has my attention. I’m enthusiastic about payroll’s potential to develop and grow.
What career and life advice do you give to a new employee in payroll?
Study and learn as much as you can, be open-minded, and be fair with your principles. Be creative and love your job. When we trust in our payroll processor, we feel secure and trust our company. Payroll teams contribute much more they think; they are part of a big chain to retain talent.
What approach do you take to include diversity awareness as a high-performing organisation?
Our approach involves incorporating and embracing diversity. The more diverse a payroll team can be, the closer we are to addressing and understanding employees’ concerns and doubts worldwide, and even just being ready to welcome other employees in an international environment.
What are some stress management techniques you have found useful?
I don’t have a technique per se, but what works well for me is to exercise regularly. Exercising gives me a sense of doing something for myself and my wellbeing. At the same time, it helps me in my daily challenges. That feeling of “I can do it,” “keep trying,” and seeing the results helps clear my mind and gives me direction. It is incredible what exercise can do for us and is something we never know until we do it consistently. Like at work, being consistent is the best way to learn and develop.