13 Considerations when Choosing your Payroll Provider
Having worked in Global Payroll for some time now, I can recognize the clear distinction between the Blue Chip players in the industry and the penny dreadfuls who seem to invest more money in slick marketing than in R&D, integration and service delivery; yet I continue to be amazed when I see unusual outcomes and comparisons being made.
There is a consensus view amongst the trusted global sourcing advisers including NelsonHall, HfS, Gartner, and Everest, that the Blue Chip options include ADP and NGA Human Resources, while the penny dreadfuls include… Well, I will let you work that out.
That being said, I have come up with a list of 13 points that I feel should be considered, asked to be proven, or where appropriate, simply written into the contract when you plan to partner with either a proven Blue Chip vendor or a take the gamble on the penny Dreadful for your global payroll project.
- Account Management & Service Delivery team are the full-time group who work for the vendor managing the ongoing strategic and operational elements of a global payroll outsourcing engagement. This team should have 3-10 people in it depending upon scale and complexity. They are not the team members processing payroll, but the senior resources located in the same country as you managing all elements of the service delivery. These are expensive, highly experienced team members who deliver exceptional value and critical services but also add considerable cost to the project. Doing without them, having them offshore or having a smaller and less experienced team is something people only ever do once.
- 70%+ of Payroll processed on own Intellectual property by own internal team is simple and critical. If the vendor hasn’t invested in developing their own set of payroll engines for key geographies and if they do not process at least 70% of payroll using their own internal team, then you don’t have a Blue Chip option, they are a consolidator.
- Big enough to sue is a simple mantra when you are considering awarding a £25M – £100M global payroll contract to a vendor. Would you let a company with 100, 250 or even 500 staff members process billions of dollars in payroll? With a turnover less than the contract value?
- Integration is such a maligned word that is often thrown around with no real concern about its impact, yet for global payroll it is critical. What your Blue Chip vendor has is a real integration platform (Payroll Exchange for NGA) that they have invested considerable time, money, and global experience into developing a platform that can truly deliver an instantaneous bi-directional data flow from 145+ country payroll engines through the management tool and into the Cloud HR platform.
- Case Management tool is the purpose built tool that actually allows the payroll services and support to be delivered and managed efficiently on a global scale. This tool would be integrated directly into the integration platform (Payroll Exchange) for robust management of payroll. Again, a big investment to design and develop a robust, multi-lingual platform.
- Scale with Global Delivery Network is critical. You need the vendor to have the global delivery network to support your global operations. The vendor should also have 5,000+ employees. Don’t kid yourself that the 250 person penny dreadful has the experience to really support a genuinely global corporate organization with tens of thousands of employees.
- 25+ Languages to directly support your employees is critical. Your employee wants the ability to talk to the person who processed their payroll in their own language for support. They don’t want to send an email or talk to an interactive voice response (IVR) system.
- Proper Project Management and Approach is needed to implement global payroll. These projects take 18-36 months to deliver and are very complex, difficult to deliver on time and on budget. It is therefore critical to invest in a central project team including a world-class Project Manager, PMO, Solution Architects, and other key roles. This will add at least another £500,000 to each year of your implementation timeline. Expensive but critical
- SLA’s with nasty financial penalties are critical to ensure the global payroll vendor is really a partner who invests into the payroll operations to deliver the best possible quality of service; rather than the penny dreadful who cannot really control their ‘consolidator model’ of disparate payroll providers.
- Experience is critical. If the partner doesn’t have 25 other clients of a similar scale and complexity that are happy to talk to you, then you have a penny dreadful. Run don’t walk.
- Flexibility is key and should be immediately apparent in delivery model options, payroll engines used, implementation approaches, and growth options for when headcount changes. There should be a range of options available to ensure the solution actually fits your business requirement.
- Global Process Standards are critical and remain the domain of the Blue Chip vendor who has the scale and deep pockets to invest in the creation of a Global Process Organization who focuses on developing best practice global process standards and are able to deploy this into the client’s site.
- Legal Compliance & Alerts is a centralized function provided by the vendor who monitors and reports on all regulatory and statutory changes relating to Payroll and HR that occur in all 145 countries. This team provides critical reporting and insights to clients on planned and potential changes. They also ensure compliance is maintained. This is also an expensive operation to provide, but critical to global payroll.