A global payroll transformation can be exciting and challenging, which is why organizations embarking on this journey should have a plan.
PayrollOrg’s webinar, “Navigating Global Payroll Transformation: Strategies for Success,” sponsored by Immedis, a UKG Company, addressed some of the challenges organizations face in the global payroll space.
Presenter Paul Mills, Director of Presales Solution Strategy for UKG, outlined the key steps every organization in the global payroll space must consider while examining their global payroll needs.
Some of these steps include the following:
- Assessing your current payroll
- Conducting market research
- Developing the request for proposal (RFP)
Payroll Assessment 101
In the assessment phase of the process, Mills said organizations must determine the compatibility of four key systems, which include:
- Human capital management (HCM)
- Workforce management (WFM)
- Financial management software
- Payroll
These systems must be consolidated and harmonized since they all feed into payroll. For example, the HCM, WFM, and financial management software must seamlessly integrate with payroll to avoid manual errors.
Another factor concerning compatibility and consolidation is data security and access. When multiple systems are in use, Mills says it can be difficult to track who has access to certain data.
“If you’re in the U.S. and you are the global payroll manager, how easy is it for you to see all your global payroll data?” Mills said. “Do you have to request multiple reports? Do you need to use a data warehouse? Are you using access databases to pull lots of different feeds from lots of different systems to create a data link to get access to that data, and if you do have access to that data, who else can see it?”
Mills said harmonizing and automating these systems—especially in relation to the financial management software and the general ledger—to work seamlessly with payroll and ensuring data management, functionality, and security are sound strategies to completing your payroll assessment.
“As part of this assessment, you need to do an internal analysis,” said Mills. “This means you are examining your core competencies today that are influenced by internal factors, and anything that is not driven by external micro dynamics but by your organization. What is your control now that you can analyze and have a positive impact on through this process?”
Other factors of the assessment phase include conducting a detailed health check of the payroll processes and identifying key problem areas before launching into the research phase.
“We always want to give ourselves a pat on the back and feel we are doing a great job, but we can always do better, and this is a good time to assess all that,” he said.
Market Research Phase
Once the payroll assessment is completed, it’s time to shift to the market research stage, where your organization is building up creating your RFP.
“When you’re looking at global payroll providers, you will want to look at their ability to enhance your control of ongoing compliance,” Mills said. “What is it that other vendors can provide that maybe you don’t have at the moment?”
Another concern is payroll leakage resulting from fraud, which can be enhanced through improved data analytics and oversight.
This phase also encourages organizations to look at shared service models and study the tools and processes for efficient shared services operations. Consider process automation tools to allow for minimal human intervention and streamline the payroll process.
“The more you can utilize a digital solution, the more strategic those employees can be and do more purposeful work,” he said.
Once the researching stage is here, organizations are poised to find just the right model, which allows them to do the following:
- Assess the short term and long-term objectives for global payroll strategy
- Examine the makeup of the organization’s current global payroll department and processes
- Review and identify anticipated challenges and identify the best model to address them
“Are there harmonized processes that you can standardize and move out to a global aspect? You’ll have unique things on a country basis that will be different for every country, but if you can get the bulk of the processes for a joiner or a leaver, down to the same for every country, then that’s a good ground point to establish a degree of standardization globally,” Mills said.
Developing Your RFP
The RFP stage begins the planning process for the organization’s payroll transformation. The standard RFP process begins with outlining the scope of the project and determining how this aligns with the organizational strategy, budget, and deployment timeline.
The stakeholders will be heavily involved in this phase of the project, especially as it relates to cost and the project’s timeline to achieve a return on investment (ROI).
Afterward, the project management team that will include payroll, finance, human resources, IT, and legal can move forward drafting the RFP, which involves writing the introductory statement, providing information, scope of work, requirements, and a viable timeline.
Mills said it may also be wise to consider using an RFP template or to even ask vendors for samples, if your team is unfamiliar with the drafting process.
Once the RFP is issued, the team can begin reviewing responses. After completing due diligence by conducting discovery calls and thorough information gathering on potential suppliers, work toward awarding the contract.
“The more detail you can provide, the better,” he said. “I cannot stress this enough. The more you include, the more targeted the responses you’re going to get will be. This will allow every vendor to assess what they can deliver and focus their bid on the problems they can address.”
Register today for this free on-demand webinar available through 31 March 2025.