Is your global payroll operation a pre-schooler or a graduate? Is your global payroll operation a pre-schooler or a graduate?

Is your global payroll operation a pre-schooler or a graduate?
30 Sep 2015

Global payroll operation ‘maturity’ has become a critically important factor for many organisations – more so than the usual drivers of accuracy, compliance and business.

Business leaders demand accurate and timely information, which is driving the demand for analytics, reporting tools and smarter cloud HR applications - all of which demand a mature global payroll operation.

The maturity of the global payroll service used by your organisation is dependent on many factors including the 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 differs for each organisation. You may have an operation where all payroll is outsourced to a single global vendor, where all major payrolls are processed in-house with smaller payrolls outsourced to one vendor, or where payroll is processed internally. Regardless of the operating model, the maturity of the payroll processing is still very relevant.

The current state of your global payroll maturity can be measured across five specific measurement areas:

Payroll technology

This is the obvious starting point when measuring ‘maturity level’. You should review key areas including your payroll platform(s), integration, selfservice tools and the availability of a ‘single source of truth’. This maturity scale can range from using disparate self service systems in each country, to a single global self-service platform where all payroll tools are genuinely integrated (bi-directionally and automatically) for real-time data sharing with the cloud HR platform.

The maturity of your payroll platform can be measured from the least mature solution, for example, using different payroll solutions from different vendors in each country processed by inhouse payroll teams, to the most mature - partnering with a single vendor to provide a global solution in all countries of operation.

Payroll process

When assessing the maturity of the payroll process, you should start with a review of your standard global payroll business processes. Are these documented per country and optimised for business use and do you know what happens in payroll in the countries in which you operate? Are there countries where you are reliant on just one person? If so, you need to look at the service model and staffing levels within payroll.

How are your ratios? Are they running at an optimised level of 1:750 to 1:1500, or are you running at 1:200? You may need to eliminate manual processes by automating timesheets, deploying a time and attendance tool, adopting robotic process automation tools where appropriate and using self service or optimised payroll business processes.

Payroll compliance

How compliant are your global payroll services? Do you have an annual global audit? Do you ever receive warning notices or fines from government or taxation authorities? Are all of your payroll team fully trained? When did you last detect payroll fraud?

Payroll business value
Is payroll simply a service, or does it actually deliver a strategic advantage to your business? Do you know what it costs to run payroll and how does this compare to established benchmarks or outsourced providers?

Does payroll add to employee engagement and satisfaction, or is it a barrier to improving this key measure of success? You may find that you would benefit if some of your payroll resources were redirected to strategic initiatives, such as advanced reporting and analytics’ rather than payroll administration.

Organisational capability to execute global payroll

The maturity of global payroll will remain an aspiration if you do not make the decision to invest in payroll transformation to deliver global project. Equally, there is a very good chance your new cloud HR vision may fail. Is your organisation 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 and adopt new business processes and to support the project?

These five measurements all contribute to the overall maturity of global payroll - current and aspirational. They should be used to enhance the overall business case for a change in payroll. The business case must address the financial costs and expected benefits.

However, if it also addresses the current and ideal future maturity across payroll technology, payroll processes, payroll compliance, payroll business value and your organisation’s ability to execute a global payroll programme, the likelihood of the project actually delivering is much greater.

By Rob Hill, vice president sales UK - enterprise, NGA Human Resources. Rob has 16 years of experience in global HR and payroll transformation, consulting, system design and technology selection. He specialises in global workforce administration, talent management and payroll solutions supported by payroll and HR outsourcing services and shared services. Rob has spent the past 12 years working with NGA Human Resources across the world but is now based in the UK. 

Global payroll operation ‘maturity’ has become a critically important factor for many organisations – more so than the usual drivers of accuracy, compliance and business.

Business leaders demand accurate and timely information, which is driving the demand for analytics, reporting tools and smarter cloud HR applications - all of which demand a mature global payroll operation.

The maturity of the global payroll service used by your organisation is dependent on many factors including the 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 differs for each organisation. You may have an operation where all payroll is outsourced to a single global vendor, where all major payrolls are processed in-house with smaller payrolls outsourced to one vendor, or where payroll is processed internally. Regardless of the operating model, the maturity of the payroll processing is still very relevant.

The current state of your global payroll maturity can be measured across five specific measurement areas:

Payroll technology

This is the obvious starting point when measuring ‘maturity level’. You should review key areas including your payroll platform(s), integration, selfservice tools and the availability of a ‘single source of truth’. This maturity scale can range from using disparate self service systems in each country, to a single global self-service platform where all payroll tools are genuinely integrated (bi-directionally and automatically) for real-time data sharing with the cloud HR platform.

The maturity of your payroll platform can be measured from the least mature solution, for example, using different payroll solutions from different vendors in each country processed by inhouse payroll teams, to the most mature - partnering with a single vendor to provide a global solution in all countries of operation.

Payroll process

When assessing the maturity of the payroll process, you should start with a review of your standard global payroll business processes. Are these documented per country and optimised for business use and do you know what happens in payroll in the countries in which you operate? Are there countries where you are reliant on just one person? If so, you need to look at the service model and staffing levels within payroll.

How are your ratios? Are they running at an optimised level of 1:750 to 1:1500, or are you running at 1:200? You may need to eliminate manual processes by automating timesheets, deploying a time and attendance tool, adopting robotic process automation tools where appropriate and using self service or optimised payroll business processes.

Payroll compliance

How compliant are your global payroll services? Do you have an annual global audit? Do you ever receive warning notices or fines from government or taxation authorities? Are all of your payroll team fully trained? When did you last detect payroll fraud?

Payroll business value
Is payroll simply a service, or does it actually deliver a strategic advantage to your business? Do you know what it costs to run payroll and how does this compare to established benchmarks or outsourced providers?

Does payroll add to employee engagement and satisfaction, or is it a barrier to improving this key measure of success? You may find that you would benefit if some of your payroll resources were redirected to strategic initiatives, such as advanced reporting and analytics’ rather than payroll administration.

Organisational capability to execute global payroll

The maturity of global payroll will remain an aspiration if you do not make the decision to invest in payroll transformation to deliver global project. Equally, there is a very good chance your new cloud HR vision may fail. Is your organisation 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 and adopt new business processes and to support the project?

These five measurements all contribute to the overall maturity of global payroll - current and aspirational. They should be used to enhance the overall business case for a change in payroll. The business case must address the financial costs and expected benefits.

However, if it also addresses the current and ideal future maturity across payroll technology, payroll processes, payroll compliance, payroll business value and your organisation’s ability to execute a global payroll programme, the likelihood of the project actually delivering is much greater.

By Rob Hill, vice president sales UK - enterprise, NGA Human Resources. Rob has 16 years of experience in global HR and payroll transformation, consulting, system design and technology selection. He specialises in global workforce administration, talent management and payroll solutions supported by payroll and HR outsourcing services and shared services. Rob has spent the past 12 years working with NGA Human Resources across the world but is now based in the UK.