How do you solve payroll integration challenges when moving HR to the cloud?

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.

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 payrolls and standardizing payroll processes for a global workforce isn’t easy. So, when your organization is moving to the HR Cloud, integrating and running payroll solutions is always going to be a challenge, especially if you want to deliver a seamless employee experience.

When in comparison moving HR to the cloud can be so straightforward, why is the payroll element always so challenging? Let’s just quickly touch on this.

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, and almost beyond all recognition. With HR, the processes and services needed to enable a workforce lend themselves well, with some customization, to being delivered as-a-service.

So why is Payroll integration so challenging?

Why? Because even with the most sophisticated IT infrastructure in place, payroll is complex. The more countries a business operates in, so the complexity grows. 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. At the point of engagement 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 the case for multi-country payroll. Yes, there are many cloud software providers developing single country payroll engines and from our own experience, we know that this can take years to get this 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 change in some countries, in others, there is no set pattern.

This is no easy task to manage and there is no sensible way that this can be managed 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, working 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 will help you understand exactly the challenges your face and outline solutions to many of these. For example?

  • How complex is payroll in your operating countries?
  • How mature is your payroll landscape?

Although we recommend starting with a standard approach, our experience tells us that this sometimes does not cover a company’s unique 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 factor new office locations as the business grow, for example.
  • Management teams also needs a payroll infrastructure that provides visibility into the efficiency of the business. This means unification of data and the only way to do this is via the cloud.

Resource heavy

As already mentioned, this is not easy, technically or legislatively. Specialist skills are required for both. And, these skills are needed in multiples. In every country where payroll is being delivered, even where there are only a handful of employees.

Everyone from the consultants to 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 skill require a huge resource investment from the customer side, the resources with the best knowledge will be distracted from their already vital role of delivering the periodic 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, and why so many organizations are looking to partners to move their multi-country payroll processes to the cloud.

Your 4 Essential Steps to Successful Payroll Integration

  • Integration with HR is essential
    Before anything else, review the integrations possibilities open to you. The right HRIS will connect to your payroll engines. Not all will allow this.
    Next, design and build a solid framework. The right architecture is key to payroll integration success.
    Build in time during your country rollouts to ensure data fields are correctly stored.
  • Pre-configure for rapid success
    A pre-configured set of best practices, what we at NGA HR call, FastTrack, will save time and cost. The deployment model can be selected depending on specific HR requirements.
    We are not talking templates here. Ask your software provider how pre-configuration is done and how generic and legal patches should be applied on a global and local level. This is particularly relevant if you share an environment with other customers, but still applies if you have a dedicated environment.
    If you’re happy to accept small changes in the naming of wage types, payslip design, and use the implementation to harmonize some of your local agreements, for example, deploying a pre-configured solution will be even faster.
  • Flexible and future proofed
    When sourcing a payroll solution, don’t just look at the cloud solution. Look at what more the partner can offer you.
    Will you want to outsource your payroll as your business grows, or payroll gets more complex? Would a partner that can run your payroll process in the cloud for you and deliver to HR processes to your employees as a service (a so called BPaaS, Business Process as a Service) be the right choice?
    It is very important to ask the questions; Is your payroll software provider able to grow and develop with you? Is outsourcing your payroll the best option?
  • Think global
    Don’t let your payroll partner limit your success. Choose one that can support payroll in all the countries you do, and might potentially, have workforce.
    Look for a solution that can run payroll in all the countries you operate. A global payroll solution will offer you global reporting and reconciliation possibilities, all accessible via the cloud.
    It will also give you a single service delivery model, without losing the local variations you might need per country.
    Companies that connect their cloud HR solutions to a solid payroll engine, will however be successful with payroll in the cloud!