Alan Moidel: Managing mobility at BMC Software Alan Moidel: Managing mobility at BMC Software

Alan Moidel: Managing mobility at BMC Software
31 Jul 2015

With 15 years in global payroll, Alan Moidel, senior director, worldwide payroll and mobility at BMC Software has sound advice for global payroll professionals on managing global payroll, global mobility and working with the aggregator model. He shares his insights with Dawn Gay.

We know that you are a veteran of global payroll with over 15 years’ experience, can you tell us how you came to be in your current role at BMC?

I’m the finance guy in the HR department. I was at Mobil Oil for 15 years and in the early 1990’s I moved into the HRIS organisation and eventually managed the company’s expatriate tax and accounting matters. After leaving Mobil in 1995 I had a variety of industry and consulting roles.

In 1995, I went to work for Deloitte where we developed the first versions of their expatriate software package. I was at Deloitte for about five years and then moved over to Ernst and Young where I had expatriate compliance and outsourcing responsibilities.

I’ve spent a lot of time around payroll - initially involved with US benefits and back office transactional work, then later in an expat role where I got learned about local country and cross border payroll best practices. In the 2000’s I went to work for BearingPoint where I had my first global payroll ‘designation’ and dealt mostly with payrolls in North America and in the Nordics.

I was also with The Hackett Group as the payroll advisory programme leader, which is where we conducted some of the first benchmarking and research into corporate needs around global payrolls. This was also around the time the Sarbanes-Oxley legislation became effective, which heightened interest around payroll compliance, efficiency and effectiveness.

As I was going back and forth between consulting and industry, I saw very complicated global payroll issues and how the industry was trying to cope with them. These issues got more complex, especially with multi-state and cross border work, which was something with which I had considerable experience.

The expat side was traditional at first - the three to five year assignee that went on assignment then repatriated. Nowadays it is more complicated with people going across borders for short-term projects and triggering all kinds of tax and payroll liabilities and issues.

And now you are managing global payroll and mobility for 6,000 people in 30 countries…

I don’t know how many companies are doing this, but at BMC we’ve combined the global mobility function with global payroll because there is such interplay with people going across borders that results in compliance concerns around payroll and taxation (corporate as well as personal).

You really have to be conversant about so many aspects of these assignments to be effective, including payroll, personal and corporate tax considerations and visa and immigration requirements. In most companies, mobility may be owned by staffing or recruiting, but not part of payroll, which can make for a challenge to tie all the pieces together.

What challenges do you see facing today’s global payroll professional?

The global payroll professional today really has to have a cross-functional background and fairly deep knowledge in a lot of areas, including tax, multi-country payrolls (not maybe the specifics of any particular country but certainly how the delivery model works and whether it’s effective), legal employment relationships, immigration and visa handling, accounting chargeback and transfer pricing methodologies etc.

You have to have some understanding about tax, legal, finance and accounting in addition to payroll so that you can converse and really understand the compliance impacts of people working across borders. It’s one thing to handle payroll in a particular country, but as a global payroll expert you really need to have an understanding of multi-country and cross border compliance issues.

There’s a lot of tax involved. It’s not just personal tax or payroll tax, its corporate tax and the implications that people have for the corporation when they work across country borders and do business where you may or may not have a legal entity.

On the immigration side, you have to understand how to enter a country legally to conduct your business activities. There are implications on payroll depending on the visa type under which a person is performing services. So this is like a spaghetti ball of facts and circumstances that the global payroll expert has to understand and assimilate.

You own global mobility, should payroll own it?

Global mobility is like an orphan in a lot of companies. Sometimes it stands by itself and that’s ok and/or as part of a shared services centre or transaction processing activity. But I don’t think many companies have connected the dots.

The implications of a good mobility programme and interplay with your payroll activities are very closely linked. You don’t find a lot of people that have that breadth and depth to understand the interaction between mobility and payroll and the risks for not structuring assignments effectively.

It used to be that the payroll professional made a career of being a local payroll expert. Now mobility and payroll people have shorter job durations, maybe two or three years or less, before switching to something else. So, in a lot of cases it’s hard to get experience and gain a long-term perspective when you haven’t been in your job very long.

But when you are making strategic decisions it’s important to have ownership of global mobility…

You need a long-term perspective and understanding of the strategic drivers for your organisation and the key decision makers - who to go to, who to talk to about a tax issue, recognising a payroll issue or when an immigration issue is going to trigger something.

Ultimately the global payroll professional strives to be a good business partner. When you can work closely with a business unit at the time when they need to deploy resources, you can make an impact that reduces costs and makes your organisation much more effective and tax efficient.

Once you’ve accomplished this, you really have a grip on your global payroll skills and can add considerable value. When you are invited ahead of time to the resource planning sessions, the global payroll and mobility professional can positively impact the company’s profit models.

Could you outline the obstacles and challenges involved when relocating expats?

Believe it or not, compliance isn’t always the number one concern on everybody’s radar screen! I think a lot of times you will find that people want a quick solution, especially when you have a business unit that wants to drive revenues quickly and deploy resources as fast as they can, but may not be cognizant about implications the various visa types can have on their compliance programmes.

Compliance with immigration rules will facilitate corresponding payroll compliance. Often, these situations require a case-by-case analysis, which can take time to do it right. Frequently, a business may make commitments to clients to be on-site within a very short time (ie within the next few days) erroneously believing that a short-term business visitor visa will have no consequences even though your resources are performing client chargeable work.

The message has to be delivered that proper visas can take more time, which can become an uncomfortable conversation for the payroll and mobility team in dealing with the business unit and ultimately, with the customer who may have been given unrealistic expectations.

When you are performing work-related activities rather than just attending business meetings, often a different type of visa is required that takes more time to acquire. All the extra time and costs are almost never understood by the business unit when they made commitments to the customer.

So, if you surprise people with extra costs and longer lead times, it can be a difficult discussion with your business unit. But as a global payroll professional, you need to be ethical and compliance orientated and able to dialogue delicately and effectively on these issues.

To complicate matters, business units turn over their people fairly regularly. So, just when you think you have finished training your contacts, a change occurs that requires you to revert back to training mode again.

Do you find working in any countries particularly challenging?

Our biggest challenges are in some of the more traditional countries where there are work councils like France and Germany. Italy is usually pretty challenging. Russia is getting more challenging with their new data privacy law that will probably cause some extra headaches!

The aggregators are also struggling with providing a standardised delivery model on a consistent basis that’s price competitive.

Tell me about your experience working with the aggregator model…

At the beginning, there weren’t aggregators, just a company or multiple payroll companies that handled payrolls in one or more countries. Nothing got pulled together, you just had one contract per country with a single provider.

Although this seemed to work to a degree, a need for more visibility, better controls and efficiency gave rise to the aggregator models that you see today. A lot of this was driven by the Sarbanes- Oxley legislation in the early 2000’s. Many would say that the aggregator model hasn’t yet quite delivered on the promise that people were hoping to achieve by now.

The larger aggregators are extremely adept at selling their service delivery model. They have had considerable success approaching a variety of American-headquartered companies and made convincing arguments about providing exactly the same level of service in every country where they are doing business, just as they have done in the US.

Companies may have no reason to believe otherwise and may not have applied the same level of rigor and due diligence in evaluating their global payroll requirements and matching them up against the vendors’ service delivery models. So, in many respects, they just plunged ahead on a leap of faith that it was going to be the same good experience as in the US.

However, often it’s only after a contract is signed and the transition is well underway that they realise this is not at all the same thing and that the aggregator may not be able to provide the level of consistency and infrastructure you expected.

You are also looking an over-arching way of getting data to them and also receiving consolidated reports and data back to you. All this can become quite elusive and many of the aggregators haven’t quite delivered on their promises yet.

Large providers are still honing their service delivery technologies that were promised maybe years ago. In the meantime, what they have delivered, in a lot of cases, has not really panned out to the point that we expected.

Consequently, smaller aggregators continue to see a window of opportunity to step up and show they can deliver. So instead of locking down the market and closing everybody up, the field still has room for aggregators who can deliver on promises established long ago.

What does the future hold?

My opinion is that the future will evolve to some sort of a cloud-based model as I don’t believe the aggregator model will be here forever. We might see it for the next five or 10 years, but I think ultimately you are going to find very good in-country providers who are on solid cloud-capable platforms that can connect into the corporate ERP systems.

Companies will find a way to easily build their own databases and interchange mechanisms and build their processes and methods the way they want without relying on a third party aggregator to do that for them. At that point, I think we’ll see the aggregator model start to disappear.

With 15 years in global payroll, Alan Moidel, senior director, worldwide payroll and mobility at BMC Software has sound advice for global payroll professionals on managing global payroll, global mobility and working with the aggregator model. He shares his insights with Dawn Gay.

We know that you are a veteran of global payroll with over 15 years’ experience, can you tell us how you came to be in your current role at BMC?

I’m the finance guy in the HR department. I was at Mobil Oil for 15 years and in the early 1990’s I moved into the HRIS organisation and eventually managed the company’s expatriate tax and accounting matters. After leaving Mobil in 1995 I had a variety of industry and consulting roles.

In 1995, I went to work for Deloitte where we developed the first versions of their expatriate software package. I was at Deloitte for about five years and then moved over to Ernst and Young where I had expatriate compliance and outsourcing responsibilities.

I’ve spent a lot of time around payroll - initially involved with US benefits and back office transactional work, then later in an expat role where I got learned about local country and cross border payroll best practices. In the 2000’s I went to work for BearingPoint where I had my first global payroll ‘designation’ and dealt mostly with payrolls in North America and in the Nordics.

I was also with The Hackett Group as the payroll advisory programme leader, which is where we conducted some of the first benchmarking and research into corporate needs around global payrolls. This was also around the time the Sarbanes-Oxley legislation became effective, which heightened interest around payroll compliance, efficiency and effectiveness.

As I was going back and forth between consulting and industry, I saw very complicated global payroll issues and how the industry was trying to cope with them. These issues got more complex, especially with multi-state and cross border work, which was something with which I had considerable experience.

The expat side was traditional at first - the three to five year assignee that went on assignment then repatriated. Nowadays it is more complicated with people going across borders for short-term projects and triggering all kinds of tax and payroll liabilities and issues.

And now you are managing global payroll and mobility for 6,000 people in 30 countries…

I don’t know how many companies are doing this, but at BMC we’ve combined the global mobility function with global payroll because there is such interplay with people going across borders that results in compliance concerns around payroll and taxation (corporate as well as personal).

You really have to be conversant about so many aspects of these assignments to be effective, including payroll, personal and corporate tax considerations and visa and immigration requirements. In most companies, mobility may be owned by staffing or recruiting, but not part of payroll, which can make for a challenge to tie all the pieces together.

What challenges do you see facing today’s global payroll professional?

The global payroll professional today really has to have a cross-functional background and fairly deep knowledge in a lot of areas, including tax, multi-country payrolls (not maybe the specifics of any particular country but certainly how the delivery model works and whether it’s effective), legal employment relationships, immigration and visa handling, accounting chargeback and transfer pricing methodologies etc.

You have to have some understanding about tax, legal, finance and accounting in addition to payroll so that you can converse and really understand the compliance impacts of people working across borders. It’s one thing to handle payroll in a particular country, but as a global payroll expert you really need to have an understanding of multi-country and cross border compliance issues.

There’s a lot of tax involved. It’s not just personal tax or payroll tax, its corporate tax and the implications that people have for the corporation when they work across country borders and do business where you may or may not have a legal entity.

On the immigration side, you have to understand how to enter a country legally to conduct your business activities. There are implications on payroll depending on the visa type under which a person is performing services. So this is like a spaghetti ball of facts and circumstances that the global payroll expert has to understand and assimilate.

You own global mobility, should payroll own it?

Global mobility is like an orphan in a lot of companies. Sometimes it stands by itself and that’s ok and/or as part of a shared services centre or transaction processing activity. But I don’t think many companies have connected the dots.

The implications of a good mobility programme and interplay with your payroll activities are very closely linked. You don’t find a lot of people that have that breadth and depth to understand the interaction between mobility and payroll and the risks for not structuring assignments effectively.

It used to be that the payroll professional made a career of being a local payroll expert. Now mobility and payroll people have shorter job durations, maybe two or three years or less, before switching to something else. So, in a lot of cases it’s hard to get experience and gain a long-term perspective when you haven’t been in your job very long.

But when you are making strategic decisions it’s important to have ownership of global mobility…

You need a long-term perspective and understanding of the strategic drivers for your organisation and the key decision makers - who to go to, who to talk to about a tax issue, recognising a payroll issue or when an immigration issue is going to trigger something.

Ultimately the global payroll professional strives to be a good business partner. When you can work closely with a business unit at the time when they need to deploy resources, you can make an impact that reduces costs and makes your organisation much more effective and tax efficient.

Once you’ve accomplished this, you really have a grip on your global payroll skills and can add considerable value. When you are invited ahead of time to the resource planning sessions, the global payroll and mobility professional can positively impact the company’s profit models.

Could you outline the obstacles and challenges involved when relocating expats?

Believe it or not, compliance isn’t always the number one concern on everybody’s radar screen! I think a lot of times you will find that people want a quick solution, especially when you have a business unit that wants to drive revenues quickly and deploy resources as fast as they can, but may not be cognizant about implications the various visa types can have on their compliance programmes.

Compliance with immigration rules will facilitate corresponding payroll compliance. Often, these situations require a case-by-case analysis, which can take time to do it right. Frequently, a business may make commitments to clients to be on-site within a very short time (ie within the next few days) erroneously believing that a short-term business visitor visa will have no consequences even though your resources are performing client chargeable work.

The message has to be delivered that proper visas can take more time, which can become an uncomfortable conversation for the payroll and mobility team in dealing with the business unit and ultimately, with the customer who may have been given unrealistic expectations.

When you are performing work-related activities rather than just attending business meetings, often a different type of visa is required that takes more time to acquire. All the extra time and costs are almost never understood by the business unit when they made commitments to the customer.

So, if you surprise people with extra costs and longer lead times, it can be a difficult discussion with your business unit. But as a global payroll professional, you need to be ethical and compliance orientated and able to dialogue delicately and effectively on these issues.

To complicate matters, business units turn over their people fairly regularly. So, just when you think you have finished training your contacts, a change occurs that requires you to revert back to training mode again.

Do you find working in any countries particularly challenging?

Our biggest challenges are in some of the more traditional countries where there are work councils like France and Germany. Italy is usually pretty challenging. Russia is getting more challenging with their new data privacy law that will probably cause some extra headaches!

The aggregators are also struggling with providing a standardised delivery model on a consistent basis that’s price competitive.

Tell me about your experience working with the aggregator model…

At the beginning, there weren’t aggregators, just a company or multiple payroll companies that handled payrolls in one or more countries. Nothing got pulled together, you just had one contract per country with a single provider.

Although this seemed to work to a degree, a need for more visibility, better controls and efficiency gave rise to the aggregator models that you see today. A lot of this was driven by the Sarbanes- Oxley legislation in the early 2000’s. Many would say that the aggregator model hasn’t yet quite delivered on the promise that people were hoping to achieve by now.

The larger aggregators are extremely adept at selling their service delivery model. They have had considerable success approaching a variety of American-headquartered companies and made convincing arguments about providing exactly the same level of service in every country where they are doing business, just as they have done in the US.

Companies may have no reason to believe otherwise and may not have applied the same level of rigor and due diligence in evaluating their global payroll requirements and matching them up against the vendors’ service delivery models. So, in many respects, they just plunged ahead on a leap of faith that it was going to be the same good experience as in the US.

However, often it’s only after a contract is signed and the transition is well underway that they realise this is not at all the same thing and that the aggregator may not be able to provide the level of consistency and infrastructure you expected.

You are also looking an over-arching way of getting data to them and also receiving consolidated reports and data back to you. All this can become quite elusive and many of the aggregators haven’t quite delivered on their promises yet.

Large providers are still honing their service delivery technologies that were promised maybe years ago. In the meantime, what they have delivered, in a lot of cases, has not really panned out to the point that we expected.

Consequently, smaller aggregators continue to see a window of opportunity to step up and show they can deliver. So instead of locking down the market and closing everybody up, the field still has room for aggregators who can deliver on promises established long ago.

What does the future hold?

My opinion is that the future will evolve to some sort of a cloud-based model as I don’t believe the aggregator model will be here forever. We might see it for the next five or 10 years, but I think ultimately you are going to find very good in-country providers who are on solid cloud-capable platforms that can connect into the corporate ERP systems.

Companies will find a way to easily build their own databases and interchange mechanisms and build their processes and methods the way they want without relying on a third party aggregator to do that for them. At that point, I think we’ll see the aggregator model start to disappear.