HR functional perspectives
Is your organization concerned by how little is known about global payroll management, compliance, and operations? Would an inability to protect employee data and keep up with complex regulatory changes affect your brand in the marketplace?
Many multinational organizations seek to improve their global payroll operations, but they are paralyzed by what they do not know:
- How many vendors are managing our operations globally?
- Do we have the appropriate contract and legal protections to promote business continuity and data security?
- Which countries should I consider in-scope? Do I have a problem?
- How much does global payroll cost? Is the benefit worth the effort?
Is the effort to answer these questions too large? Is the approach unmanageable? Many organizations have answered in the affirmative before. But now, many are reconsidering that position.
Defining global payroll and the delivery models
What is global payroll? Does it mean payroll is outsourced to one vendor globally or moved to one global payroll system? Potentially. Does it mean a global governance structure is put in place and that vendors are consolidated or managed by shared services regionally, either in-house or through outsourcing? More likely. Most organizations cannot take a “one-size-fits-all” approach.
Effective global payroll management evaluates the organization’s business needs and typically blends the following delivery models to cover the globe:
Country-specific servicing models:
- Operations are managed at the local level
- Systems can be in-house or outsourced
- Payroll is often the system of record for both HR and payroll data
- Global governance is rarely in place
- Processes and policies vary from country to country
Regional servicing models:
- Operations are managed at the regional level
- Organizations use in-house systems, outsourcing, or a hybrid approach, and reduce vendors by continent
- Regional governance, processes, and policies are in place
- HR and payroll system of record definitions are in place at a regional level
- The largest markets may be served regionally with small markets using country-specific solutions (due to cost of migration)
- The Asia Pacific region is typically preferred to standardize operations
Multicontinent or global delivery model:
- Operations are managed at the regional level with global oversight
- Organizations use in-house systems, outsourcing, or a hybrid approach
- Global governance, processes, and policies are in place
- HR and payroll system of record definitions are in place at a global level
- Organizations reduce vendors globally
- Large multinational organizations rarely standardize 100 percent of employees onto a single platform or provider
- The global delivery framework typically includes country-specific solutions for small markets.