Some people revel in change, others revolt. However, regardless of how you feel about change, it must be approached with deliberation when it involves something as critical as payroll. Transitioning to an entirely new payroll technology and system is huge, and if it goes wrong, the consequences are severe. Potentially people will not receive their pay, and this could result in missed mortgages or rents and, for organizations, missed statutory deadlines and fines, and reputational damage.
It is essential that any global payroll change project is strategically planned and the following are prioritized:
- Building the right team of skilled professionals
- Defining requirements across data, technology, and processes
- Understanding implementation and training needs.
According to Amalgam Insights’ research, the following departments and roles are essential for a successful rollout:
Chief Human Resources Officer’s Office
This group will ensure the correct information, including paid time off, retirement-plan contributions, bonuses, insurance benefits, and other government deductions, remain accurate after migration. They are also responsible for communicating with employees to let them know when and how they will get paid after the switch- all of which falls under HR’s remit.
Chief Financial Officer’s Office
This party reviews and approves all spending needs. Plus, they will oversee the legal documentation needed around legal structure, taxation, and compliance required in each country.
Chief Information Officer’s Office
Payroll revolves around sensitive data. No one wants a breach or to be hacked. The CIO’s team ensures that all security measures are taken and deployed. Additionally, this function is responsible for compliance with data privacy regulations such as GDPR. They will lead compliance and security due diligence to ensure that the new vendor meets international standards for their security measures and protocols.
I see this role as the lynchpin. The project manager ensures all the moving parts of the project are in sync and operating smoothly. This individual also works with stakeholders across the organization – both internally and externally- to best represent the needs and expectations of the organization.
Technical architect/implementation success manager
This individual manages the specification, design, development, and testing of all integrations and makes sure the global payroll initiative goes live, aligning with the business’s processes and technical requirements.
Head of Global Payroll
This person is deep in the weeds and, therefore, best positioned to liaise across departments and get buy-in from the internal team. Again, their expert knowledge of local country legislation and languages is critical to the success of the transition.
As highlighted by Amalgam Insights, the following are needed to ensure a successful implementation:
Relevant global payroll data
Entries must include direct data such as employee name and date of birth in addition to the documentation that shows the trail of data accessed, entered, edited, and used. This data must be cleansed, formatted accurately, and error-free. No one wants bad data in the new system.
In-country compliance requirements
Look for software that does this work for you – as in it includes the ability to check and validate what country specific information/details are needed to complete payroll. It is also hugely beneficial if the technology integrates with other systems, including finance systems and human capital management. As noted by Amalgam Insights, it is also best if you look for a payroll provider that shows the status of each payroll run, by global region, country, and stage.
Country specific project timelines
When planning global payroll, set timelines by country. Regions operate according to different regulations and reporting requirements- so aiming to roll out all payrolls at once is not always viable. Typically organizations will need to stagger all payroll activities. The right payroll technology will provide up-to-date compliance guidance along the way.
Implementation and training
Moving to a new global payroll solution means new everything – new systems, new SOPs. To minimize disruption to both payroll teams and employees, bear in mind the following:
Phased approach – Delineate payroll runs by geographic similarity, or even by tax year or pending legislation. Then, you could, for example, group 10 countries into different phases (based on a model of 50) and prepare for parallel payroll runs.
Parallel runs– It is best practice to perform a simulated run alongside the legacy payroll system to validate setup and calculations. This gives both the organization and the provider time to correct any mistakes or understand where the new platform may have produced more accurate results.
Training – Education and an understanding of the new system will directly impact on the success and optimization of the new software. Look for a provider that supplies this training to all users.
Getting it right
Global payroll has evolved significantly in the past few years from historically manual processes to highly automated solutions that are more efficient and accurate, and less costly to operate. Many organizations are saddled with legacy systems, losing out on cost and time savings they could realize with a more modern global payroll system that has been purpose-built for the digital age. Change is complex, and there are many obstacles across people, processes, and technologies that need to be addressed. Nonetheless, this is the age of digital transformation, and payroll operations is no exception. When an organization has reached the moment when they’re ready to make a change in payroll providers, it’s essential to have realistic expectations at every step of the process. This requires the proper executive visibility, data integration, and understanding of project stages and scope.
For a more in-depth overview, download the Amalgam Insights whitepaper.Back to all posts