How do you integrate payroll when moving to the Cloud?

by Gert Jan Koops 

This is a question my colleagues and I are often asked. Whilst it’s an easy one to answer, it’s not so easy to do. Why? Because payroll is complex, and it is getting more so especially when HR is moving to the Cloud.

In this blog, I outline the four steps your business should take if you’re to solve your payroll challenges and be sure you can;

• Deliver compliant, accurate and reliable payroll services
• Have the option to rapidly scale
• Solve payroll integration challenges when moving to the HR cloud
• Gain insights into employee costs to help you optimize your workforce return

Managing the complexity of local payroll and standardizing payroll processes for a global workforce isn’t easy.

Consequently, when your organization is moving to the Cloud, integrating and running payroll solutions is always going to be a challenge. This is especially the case if you want to deliver a seamless employee experience.

Moving HR to the Cloud can be very straightforward, so why is the payroll element always so challenging?

HR is ideal for the Cloud

The cloud computing model is ideal for the delivery of HR services. So much so, it has revolutionized the HR software landscape beyond almost all recognition. With HR, the processes and services needed lend themselves well to being delivered as-a-service.

Why is integrating payroll so challenging?

Even with the most sophisticated IT infrastructure in place, payroll is complex. The more countries a business operates in, the more complex it becomes. It’s not unusual for a business today to operate in multiple countries.

Some clients we work with have employees in almost every country in the world. When we start working with them, they’re likely to have as many payroll systems, as they have country locations. If this were not enough of a challenge, there is rarely a standard workforce structure.

Payroll is even challenging for software providers

Where we might say that the Cloud is ‘made’ for the delivery of HR processes, it’s not necessarily the case for multi-country payroll. Yes, there are many cloud software providers developing single country payroll engines. However, from our own experience, we know that this can take years to get right.

Again, why?

Payroll legislation and collective agreements never stand still. There are always changes being made in one country or another. While there are rules for changes in some countries, in others, there is no set pattern.

This is no easy task to manage. There is no sensible way to manage this without local knowledge in each domain. It’s for this reason that so many businesses continue to use their existing payroll engines.

Already proven to work, when it comes to payroll, ensuring it works is the number one priority. If you don’t pay your employees on time, the consequences for your business can be dire.

The Global Payroll Complexity Index goes a long way to explaining the payroll challenges commonly faced.

Build your payroll case

Do you know which payroll service delivery model best suits your organization? Before you do anything, it is vital you understand this.

We have many tools that can help you understand the challenges your face and outline solutions to many of these, for example:

• How complex is payroll in the countries you operate in?
• How mature is your payroll landscape?

Although we recommend starting with a standard approach, from experience this sometimes does not meet a company’s needs. In these circumstances, we can help you build a unique payroll service delivery model.

Payroll must accommodate change

• A business fit for the future needs a payroll infrastructure capable of supporting an increasingly disparate workforce. One that can for instance factor new office locations as the business grow.
• Management teams also needs a payroll infrastructure that provides visibility into the efficiency of the business. This means unifying data and the only way to do this is by moving to the Cloud.

Resource heavy

As previously mentioned, it’s not easy, from a technical or legislative point of view. Specialist skills are required for both. These skills are needed in every country where payroll is being delivered. Even where there are only a handful of employees.

Everyone from the consultants who plan and implement the payroll solution through to the local knowledge needed to ensure the payroll is set-up correctly. Moving forward, those to guarantee the technology is maintained and that all local legislative changes are made.

Not only does this require a huge resource investment from the customer side, the people with the greatest knowledge will be distracted from their vital role of delivering the regular payroll process.

This is a huge and costly requirement for any organization, especially where there is, perhaps, only one employee.

It is for these reasons that we’re answering the “payroll challenge” question so often. Also it is why so many organizations are looking to partners to move their multi-country payroll processes to the Cloud.

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