Going Global: What Does That Mean?
You’ve received the call. You’re going global! But what does that really mean to a payroll professional?
Global, in the literal sense, is defined as relating to the whole world. However, for payroll, it’s much more.
Many multinational organizations have tackled “global” payroll. For most, this has been a laborious process of determining where, what, how, and when to make changes. For others, it has been a series of starts and stops without a holistic strategy or much success.
What makes global payroll so different? The following is just a starting list:
- Culture—Going into a country that you have not experienced
- Language—Understanding the different language requirements
- Benefits and contractual requirements—Differences by country and employee type are common
- Social structures and taxes—Differing social schemes and tax schemes
- Works councils or collective bargaining agreements—Many exist in multiple forms
- Compliance requirements—Data, labor, and tax compliance requirements and the political and economic stability of the country
It is common for organizations to view going global as only an opportunity for consolidation of payroll vendors but, while that is necessary, that is not the only goal. In payroll, global should be a mindset for management of an organization’s worldwide payroll operation.
Going global in payroll really means consistency in process, reporting, compliance, technology, and above all, consistency in service delivery to all employees. The strategy around this approach has a multitude of benefits far beyond the definition of global. But it is not without its difficulties. Making a change in mindset is a challenge in and of itself. To truly make the change to a global payroll organization, one must be committed to the changes that will be needed within the organization. The due diligence, strategy, and planning of the change is by far the most difficult piece of work and the most important.
So, how do you go global? There are a few very important parts to creating a successful global payroll operation.
Making the move to managing a global payroll operation requires a different type of collaboration with all aspects of the business and stakeholders. Understanding the people involved and the culture is paramount to success.
For example, in the United States, you may have one or two stakeholders for finance or HR representing all of the employee base. But in a global environment that could increase dramatically depending on the footprint and layout of your organization. You may have a finance person and HR person for each region or country and each business line. Payroll may be embedded within the business or a different area.
So, working toward a global transformation may involve communication with many more leaders and stakeholders than you are used to and many cultures you may not have been introduced to. How you work with another culture will also lead to the success or potential failure of the transformation. There is a great book on doing business in other cultures called “Kiss, Bow, or Shake Hands.” I highly recommend you read the chapters on the countries you are working with to make sure you know how to communicate effectively within that new country’s culture.
Thoroughly educate yourself on the rules of the new country, how the payroll is currently set up, and how it’s processed. Understanding this information will help you determine where you can add value and what the next step should be for the country in question. Remember that the Global Payroll Management Institute (GPMI) is a great, free resource.
Document Your Processes
This is by the far the greatest miss by many companies. As you work to determine your overall plan, you must understand what your current process is and what the future process will be. You cannot transform what you don’t understand, and you cannot understand what is not documented. As you work to standardize your processes from a global perspective, this pre-work will be invaluable.
Don’t underestimate the amount of communication this step takes. You will need a plan for each of your stakeholder groups. Not only will you have to sell your ideas but also commit to service level agreements and show the value the change will bring. Whether they’re vendor changes, organizational changes, or process changes, they all require a high level of communication and buy-in from your stakeholders.
Create a Talent Management Plan
Understand the competencies of the team. Get to know the strengths and development opportunities of each individual. It’s important for your team to understand that you have thought about them and their careers, as well as how they will learn the intricacies of the new country and stay abreast of changes in legislation, business, and process. Creating a global job family with details that you can share goes a long way in helping them manage their own careers. Be sure to include continuing education and development as part of your talent strategy.
Develop a Compliance Model
Compliance needs to be front and center to payroll. Based on your new footprint, develop a model that follows the requirements of your company while adhering to the requirements of the country. Standardization of the model will help the team process consistently regardless of the country. Keep in mind you will need to partner with your payroll vendor(s) to ensure that they are compliant and providing you with the information you need.
Create a Dashboard to Communicate
How the information is communicated varies from company to company. However, it becomes imperative to provide this information when you are dealing with a global operations organization. Some of the information is in statistics such as total gross payments, total taxes, etc. Some of it is in key performance indicators (KPIs) such as accuracy, timeliness, overpayments, and customer satisfaction. The combination of these two sets of data will tell the story of your organization. You may want to consider a couple of different dashboards depending on your audience. However, don’t miss this step. It’s your chance to tell your story.
As you embark on your global payroll journey, know that this type of transformation is not easy. There’s not just one way of doing things. There are many variables, and there will be bumps along the way. Keep an open mind and a humble heart and remember, it’s payroll, and YOU are a payroll professional.
Deveri Stines is a Global Consultant who has spent more than 30 years in the payroll industry. She has extensive experience in improving and scaling operational performance for large multinational companies—leading global teams comprised of internal and outsourced HR operations, global payroll, and HRIS. She is also a member of the APA’s Board of Contributing Writers for PAYTECH, the Hotline Referral Service, Shared Services Task Force, Strategic Payroll Leadership Task Force (SPLTF) Best Practices, Emerging Technologies, and Global Issues Subcommittees.