Payroll is a crucial operation of every business. When it goes right, managers have access to valuable data about employee equality and well-being. When it goes wrong, employees may feel poorly treated and even leave.
For global payroll, the stakes are especially high. Failure to comply with local laws and regulations can lead to exorbitant fines and a loss of trust.
To multinational organizations, global payroll transformation is a competitive necessity for driving business efficiency and keeping pace with regulatory changes around the world.
That’s why it should be a top priority to failsafe your global payroll implementation. Fortunately, there is much you can do to secure yourself.
As Director of Professional Services at UKG, I recently delivered a webinar on this exact topic. The talk covered several points, including:
- Top Compliance and Implementation Challenges
- Preparing for Global Payroll Implementation
- Stages of a Global Payroll Implementation
- Tips for Success
Top Compliance and Implementation Challenges
Shifting to a modern global payroll system comes with challenges. Addressing these before they turn into problems will help make your transformation go smoothly and effectively.
Inaccurate employee source data imported into the payroll system can lead to false inferences, erroneous models and compliance missteps.
Regulatory compliance changes are a constant, reoccurring fact that needs to be dealt with.
Paying employees on time is the core operation of payroll services and it can be a challenge for a global business with a footprint in many countries. Year-end reporting is especially difficult when data from multiple countries needs to be coordinated.
Paying statutory deductions to tax authorities on time is another compliance challenge global businesses face, especially given different timelines and schedules around the world.
Beyond compliance issues, global payroll is difficult because it demands scalability and data protection on information that would otherwise be local. There are many cases when information needs to be shared across localities that have different regulations and those regulations can change over time as well.
Businesses with a global footprint need to ensure they are addressing all of these issues. It is simply a part of operating in the modern era. It is possible to manage the significant consequences of many challenges, provided that your global payroll provider is capable.
Before forming any concrete plans, you should ask questions about what your true aims are:
- What is our payroll process lacking?
- Are we happy with the service from our in-country providers?
- Is our data formatted in a useful way?
- What kind of reporting do we want?
- What digital tools would our payroll team benefit from?
- What does success look like?Laying the Foundation
- There are several guidelines to follow in forming your initial plans.
- Choose a trustworthy and credible vendor
- Thoroughly plan the implementation with your vendors
- Prioritize countries with the largest populations
- Clean and standardize data
- Understand your current source of truth and be aware that you may need to gather new requirements for statutory compliance.
Preparing for Global Payroll Implementation
Implementing a cohesive global payroll system is an important step for international companies. Before the transformation can begin, an operation of this significance needs ample planning and preparation. These steps include:
- Establishing key needs
- Laying the foundation
- Defining project parameters
Establishing Key Needs
Before forming any concrete plans, you should ask questions about what your true aims are:
- What is our payroll process lacking?
- Are we happy with the service from our in-country providers?
- Is our data formatted in a useful way?
- What kind of reporting do we want?
- What digital tools would our payroll team benefit from?
- What does success look like?
Laying the Foundation
There are several guidelines to follow in forming your initial plans.
- Choose a trustworthy and credible vendor
- Thoroughly plan the implementation with your vendors
- Prioritize countries with the largest populations
- Clean and standardize data
Understand your current source of truth and be aware that you may need to gather new requirements for statutory compliance.
Defining Project Plans, Timelines and Milestones
Give yourself plenty of time to go through the evaluation process, contract with the new provider, and prepare to begin implementation.
Discuss and agree to terms of reference for your global payroll implementation project with your selected partner organization.
Draw up a full project plan, divided into phases for different countries and business areas.
Like any large project, global payroll transformation works best with the right mix of strong initial planning and the ability to adapt and reorient as the project progresses.
What Global Payroll Transformation Looks Like
Every company faces its own unique journey to modern global payroll. But every journey involves several common features:
- Data migration
- Hypercare phase
- Measuring & promoting success
Data Migration
Moving data from one platform is necessary, but can be disastrous if mishandled. Information can be lost, stolen or damaged, much like physical goods. This is especially significant for payroll, as payroll information encompasses sensitive data points like addresses, ID numbers, income and birth dates.
Obtain data from existing providers to migrate to the new platform.
Set accurate budgets and timelines according to the exit process of existing providers.
Align with your new provider to understand who holds what responsibility during the transition.
Ensure clean inputs to support the parallel run.
Hypercare Phase
The hypercare phase is the period of dramatically increased support and communication from your new vendor when starting out on their platform. It is necessary that they do this to ensure a smooth and complete transition.
Be sure to have the same people involved in the implementation to support the process.
Any items that were not critical to the success of the go-live should be addressed during this phase.
Measuring & Promoting Success
It is important to set measurable goals to determine the success of your project. From then on, these metrics can be used to iteratively improve your global payroll system over time.
Some important questions to ask include:
- Did the project delivery meet your expected measure for success?
- Was the project on time and within agreed timelines?
- Have you streamlined processes across countries?
Setting goals is often as much art as it is science. Allow for some flexibility in your assessment of success. Rather than all-or-nothing conclusions, you can judge outcomes on a sliding scale from highly successful to not at all successful.
Tips for Success
There are many small things to be mindful of before and during the transformation process.
Be realistic about what concessions you may need to make, such as the number of payroll countries that are live in each phase and accomplishing specific objectives.
Document everything in a pre-agreed format and share it with all stakeholders for feedback.
Ensure that stakeholders know what to expect in terms of outcomes: the number of countries to go live, deadlines, go-live dates, new reporting capabilities and relevant platform integration deals.
Understand your dependencies, such as ongoing transformation projects, resource constraints and data collection.
Monitor the rollout closely using a payroll implementation checklist and up-to-date payroll performance metrics.
Work with your vendor implementation team to resolve any issues as they arise.
Be transparent with your vendor on projects that may impact the implementation.
Understand the influence and power of each of your key stakeholders influence and power.
Conclusion: A Guide to Payroll Transformation Success
Although no business transformation is without its pitfalls, by laying the right foundation and following best practices, you can maximize your chances of success when it comes to global payroll.
If you are in the process of payroll transformation or are planning to start it soon, consider watching my recent webinar. I present a detailed guide to payroll transformation filled with actionable tips and insights for the process.
