WRITTEN BY NGA’S OWN: GERT JAN KOOPS.
This article is also featured in the Global Payroll Magazine, download the full magazine here.
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 article, I outline the four steps your business should take if you’re to solve your payroll integration 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.
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.
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.
Where we might say that the cloud is ‘made’ for the delivery of HR processes, it’s not the case for multicountry 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 right.
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 in explaining the payroll challenges commonly faced.
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.
• 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 need 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.
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 multicountry payroll processes to the cloud.
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