5 Ways to Measure the Maturity of Your Global Payroll Operation
With the rush to transform HR, adopt Cloud HR platforms, and enhance organizational decision making with analytics, the requirement to have a mature global payroll solution has become critically important. The maturity of the global payroll service used by your business and your happiness with its current level of maturity is dependent on many factors including business structure, budget control, historical technology investments, business vision, and awareness of the impact of an immature global payroll service.
The ideal mature global payroll service does differ for organizations. It may include all payroll outsourced to a global vendor, all major payrolls processed in-house with the smaller payrolls outsourced to one vendor or even processing all payroll internally. Regardless of the operating model the maturity of the payroll processing is still very relevant.
The current state of your global payroll can be measured across five specific areas:
- Payroll technology – This is the obvious starting point to measure maturity levels. Key areas to consider include Payroll Platform(s), Integration, Self Service tools, and the availability of a ‘Single Source of Truth’. Maturity of the Payroll Platform(s) can be measured from the least mature solution of using different payroll solutions from different vendors in each country processed by in-house payroll teams to the most mature of partnering with a single vendor to provide a global solution in all countries of operation. This maturity scale then follows through to using disparate Self Service systems in each country to a single Global Self Service platform and whether all payroll tools are (genuinely) integrated (bi-directionally and automatically) for real-time data sharing with the Cloud HR platform.
- Payroll Process – The maturity of the Payroll Process starts with the immediate review of whether you have a set of standard Global Payroll Business processes, documented per country and optimized for business use; or whether you have no real idea of what happens in payroll in each country in which you operate. Are there countries where you are reliant on just one person? You then need to look at the Service Model and Staffing levels within payroll. How are your ratios? Are they running at an optimized level of between 1:750 to 1:1500 or are you running at 1:200? The focus needs to be on eliminating manual processes via automation of timesheets, deployment of a Time & Attendance tool, adoption of robotic tools, and increased adoption of Self Service or optimized payroll business processes.
- Payroll Compliance – It is time to be honest with yourself! How compliant are your Global Payroll Services? Do you have an annual global audit? Have you received any warning notices or fines from government or taxation authorities? Is your payroll team fully trained? When did you last detect payroll fraud? Never have? Well maybe that is a worry.
- Payroll Business Value – Is payroll simply a service, or does it actually deliver strategic advantage to your business? Do you know what it costs to run payroll and how does this compare to established benchmarks, or an outsourced provider? Does payroll add to Employee Engagement and Satisfaction, or is it a barrier to improving this key measure of success? Finally, would the benefit be greater if some of the payroll resources were redirected to strategic initiatives such as advanced reporting and analytics’ rather than payroll administration?
- Organization capability to execute Global Payroll – Without the ability to make a global enforceable decision to invest in payroll transformation and to deliver a global project, the aspiration to increase the maturity of global payroll will remain just that. Equally there is a very good chance your new Cloud HR vision will fail. Is your organization willing to invest the time and money in the decidedly un-sexy (yet critically important) concept of a payroll project? Is each country operation willing to consider giving up payroll processing, adopt new business processes and support the project?
These five measurement axis’s all contribute to the overall maturity of global payroll – current and aspirational. They should be used to enhance the overall business case for change in payroll. The business case must address the financial costs and benefits, however if it also addresses Payroll Technology, Payroll Processes, Payroll Compliance, Payroll Business Value, and your organizations ability to execute a global payroll program, then the likelihood of both approvals to proceed with the project and the likelihood of the project actually delivering on its promise is much, much greater.