November 2022

Create an Actionable Plan With a Global Payroll Transformation Professional—Part II: What Your Multinational Business Needs to Consider

By Wade Redfearn

GlobalTransf_InsideWhether your company’s payroll is operating like a well-oiled machine or you believe it could be better, there are probably indicators that it is time to make improvements.

Quick global growth, outgrowing your payroll vendor, not utilizing one that has the services you need, or relying on manual processes like spreadsheets can negatively affect your payroll process.

The benefits of payroll transformation from risk reduction to increased efficiency, better compliance, and an improved employee experience are compelling.

In the first part to this article, we looked at how a payroll transformation professional can ensure you have the best foundation for global process alignment every step of the way. Now, let’s look at what your business needs to do. In our experience, we’ve seen key steps that are often overlooked.


Evaluate Your HCM or HRIS

Payroll transformations are more successful when completed in conjunction with an HR transformation—usually spurred by the adoption of a global solution for human capital management (HCM), and the rationalization of HR processes that come with it. Companies then must address the question: Now that all employees fit snugly in our HCM, do we have a predictable way to get them all paid?

HCM or a human resources information system (HRIS) is significant to ensuring your HR operations run smoothly. Processing payroll using the available pay data within the HR system will pay off this investment.

Some things to think about include the following:

  • Does your company have an HCM or HRIS in place? And is it the same system—used for the same functions—in each country you operate?
  • If so, will you need to transform your HR platform and HR processes before you transform your payroll process?
  • If not, have you started the process of vetting vendors?
  • If you do have a current HCM or HRIS, do you have a systems integrator that could help deploy a new one or make changes to the implementation of the existing one?

HR systems and global payroll can make a great team, but only if they're well integrated. Your HCM or HRIS should have the ability to send data to your global payroll processor to make payroll easier by cutting back on manual reviews and calculations. Having your HR system up and running smoothly or changing providers before, or in conjunction with, a payroll provider switch will ensure your transformation is as successful as possible.


Understand Your Organization’s Global Expansion Plans

Don’t set yourself up for compliance fines and penalties by sticking with a one-size-fits-all approach to payroll in each country your company operates or plan to operate. Each country’s laws, regulations, and employee expectations will undoubtedly differ, so your system must adapt to avoid substantial penalties.

It’s also important to know the pace or timeline of any planned expansion, so choose a provider or partner capable of supporting your organization in new countries or regions.

Some important questions to think about include the following:

  • Which countries do you do business? 
  • Do you know your payroll process/vendor limitations in all these countries?
  • Are there any countries you are planning to expand to in the next year?


Be Prepared to Make a Strong Case for Payroll Transformation

After evaluating your global expansion strategy and your HR system, you need to figure out your “why.”

Some things to help you uncover this is to ask the following:

  • Why should we change the way we’re handling payroll?
  • What will we gain from overhauling our payroll processes?

    Making a business case will be the best way to ensure you’re moving in the right direction and can get the right people on board to successfully transform your payroll. But beyond your why, you’ll need to dig into the current state of payroll to inform what needs to be accomplished.

  • Evaluate your current vendors and decide who needs to be on board for this transformation project to help push it forward. This component will help make a strong business case to internal stakeholders on why your payroll process needs to change in the first place.

This is the time to answer the following questions:

  • Which vendors do you currently use for payroll?
  • Which departments should be involved in the transformation?
  • Who are the key stakeholders?
  • What are the technical/legal constraints?
  • Who will lead the change?
  • Is there someone on staff who can manage this project, or will you need to add them to your team?

RFP, Vendor Presentation (If Needed)

Once you’ve secured buy-in and decided to move forward with a new vendor, you’ll need to create a global payroll request for proposal (RFP).

The RFP will ensure you find a partner that matches your needs for payroll transformation.

Some questions to consider include the following:

  • Do we need a single or multiple vendors to cover the countries we work in, or is "transformation" for us purely about internal re-organization?
  • If we do need a vendor(s), what are the red flags and must-haves?
  • Should the vendor integrate with our current HCM?
  • What level of cost are we willing to support?
  • How will we measure vendor success?
  • How many countries should we roll out at a time, and which ones are most important?

Be Best Equipped for Payroll Transformation

While there’s quite a bit that goes into successfully launching a transformation project, these five considerations will leave you and your company better prepared and transformation ready:

  1. Compliant payroll
  2. Processing payroll as quickly and efficiently as possible
  3. Alignment when it comes to payroll processing and reporting around the globe
  4. Getting the data needed to make the most strategic decisions
  5. Elevating HR from an administrative position to a strategic position
The other missing piece of the puzzle for a successful transformation—besides a payroll transformation professional—is a payroll partner. By working with the right payroll partner, your multinational business will be able to reap the benefits of a transformed and well-oiled payroll process.

Wade Redfearn is Segment Marketing Manager for Global Managed Payroll at Safeguard Global.
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