The remote-first work culture has enabled companies to hire without borders, propelling many organizations into hypergrowth mode. But with this growth also comes the realization that the status quo might not be working for current business systems or processes.
As the holes in these systems become more evident, companies will need to repair them versus patching them up—and payroll is often one of the processes most impacted by global growth.
In fact, "Organizations outsourcing multiple [payroll and HR] functions to a single vendor see cost efficiency—on average 32%—versus organizations using multiple vendor or "best in breed" in house approach,” according to PwC.
If your multinational business is dealing with impaired payroll processing, then it may be time to think about hiring a payroll transformation professional to standardize your global payroll process.
What is a payroll transformation manager?
The role of payroll transformation manager is on the rise due to the need for companies to transform their broken payroll processes—which starts withhaving someone dedicated to identifying and fixing payroll issues.
The payroll transformation manager or director will take the lead on auditing the current payroll process and creating an actionable improvement plan. This usually leads to them having to research new payroll vendors, whether it be HCM or a multi-country payroll vendor, to figure out which one is the best fit for the company to move forward with.
The payroll transformation manager will be tasked with aligning stakeholders on the new vendor, implementing the vendor, and training the team on the new payroll process. In rare cases, some companies may have a new vendor purchased that they’d like to move forward with, and the transformation professional will be brought in to implement the new vendor.
But before you decide whether to undergo a payroll transformation project, you need to look at your current payroll process and determine what can be improved.
Identifying payroll issues
As your business expands, your payroll process can become impaired due to...
- Lapses where payroll stops being handled by software and relies on manual intervention (cue spreadsheets )
- Manual payroll processing leading to security issues (i.e. un-sanitized payroll data getting passed along chains of custody that exposes sensitive employee information to people who shouldn ’t be seeing it)
- Utilizing a one-size-fits-all approach by trying to use payroll processes designed for one country in another country where different pay practices and data exist
- Outgrowing your current multi-country payroll vendor or Human Capital Management (HCM) services— or not utilizing their services in the best way possible for your business
By measuring a few key performance indicators (KPIs), you will be able to identify the state of your current payroll process.
A few KPIs you should look at include :
- Accuracy rate/number of errors
- Time to run payroll
- Total cost of running payroll
These KPIs will help you determine how many errors your team or current vendor
is making when processing payroll, how long it’s taking to process payroll,
and how much it’s costing you—especially if you are being charged fines and
fees due to non-compliance issues.
By looking at these three KPIs, you’ll have a good understanding of how your
payroll processing is currently going and if it needs improvement. When it
comes to the total cost of running payroll, this can be a great thing to weigh
when trying to decide if you should move forward with a payroll transformation
project and hire a payroll transformation professional to lead it.
Benefits of a payroll transformation project
At the end of the day, improved payroll processing can lead to:
- A happier workforce due to payroll accuracy (no one likes to get paid incorrectly!)
- Strategic business growth due to ease of access of centralized global workforce data
- Time savings, thus allowing HR to focus on more strategic business tasks versus time manually processing payroll and/or fixing processing errors
- Cost savings by eliminating compliance errors
This is why it might be time to consider hiring someone to spearhead a payroll overhaul.
A payroll transformation manager will help you develop a payroll roadmap. This road map will answer key questions like:
- What global payroll vendor do we currently utilize? Does it deliver value for us now and will its features be sufficient for future growth?
- Do we have the knowledge and expertise within the team to deliver effective global payroll?
- Are we compliant in each country we currently operate in? How do we stay ahead of future compliance needs? How fast have we adapted in the past, and did we have to pay any fines?
This road map is just one small portion of the payroll transformation project but is one step in the right direction to providing unequivocal value and knowledge for your multinational business.
Enable business growth with improved payroll processing
Whether or not you have accessed that your payroll process needs improvement
currently or you're planning further business growth and know that the status
quo won’t work for you much longer, a payroll transformation professional is
certainly a hire to consider.
The business case for payroll transformation is practically undeniable as
global payroll is a business-critical function that is crucial to your
business reputation and employee morale. A payroll transformation can lead to
time and money savings, employee satisfaction, and enabling your view of
global data.
Another advantage of implementing a global payroll provider—or utilizing the
right services by the one you already have in place—is the ability to hire
beyond your own backyard or even borders . It’s no secret that there is a
significant and ongoing global talent shortage. In fact, companies risk losing
$8.4 trillion in revenue by 2030 if this global labor shortage continues,
according to Forbes.
But, by working with a payroll vendor in countries where you have an entity
that can also function as an employer of record or having access to a payroll
vendor who can act as the legal entity across 170+ countries, companies
will feel less of a hit by being able to find skilled talent across the globe
(especially when it comes to such a niche role like this one).
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