If you then think of a global payroll (i.e. a multi-country payroll), you operate a hybrid strategy: in-house and outsourced payrolls with varying, fitting service levels. You cannot just meet the local providers to get acquainted if you outsource your payrolls and manage and coordinate those from a centralised or regional location. Yet, you trust them with taking care of your baby.

Your providers are the nanny to your baby.

So would you not want to know them? If they don’t take good care of your baby, would you not wish to replace them quickly? Well, we asked this question to our followers:

• Is controlling who your in-country payroll provider is crucial to you?

After a week of having the poll open and hundreds of votes, the results are clear:

• 80% voted “Yes”
• 20% voted “No”

While the results leave no room for interpretation, is this also how global payroll professionals are acting in reality? And, why does this even matter? You're invited to explore this with me!

Why would you not want to control who your in-country payroll provider is?

In the post where I asked our followers to vote, I included this underlying context for those choosing ‘No’ (20%):

• ‘No’, means you do not want to control this and leave the choice of who the in-country provider is to a central, regional, or global provider.

I can sympathise with those who voted no (although, as a Global Payroll Manager, I don’t entirely agree). You still have a lot of companies who choose (a mix of) central providers or even have the utopian idea of one single provider. In that mix, you will have providers who deliver coordinated services, like aggregators or accountancy firms.

They offer a central coordination platform and link up their local services, either delivered by their offices, strategic partners, or just in-country providers to fill in the gaps. Nothing new here. But you can’t control who your local provider is, so you’d have to rely entirely on that central contract, governance, and supply chain management. When you get into challenges, it is super tough to make changes. I have been there.

You follow escalation processes through a central contact and follow those escalation levels until you either see improvements or hit a boiling point. You are brave enough to say: I want to replace this specific country provider. But then what… would they indeed replace them, and if so, do you still not have a choice who they are? And if they don’t replace this in-country provider, you’re left to find your own and break your standardisation from a platform, process, and data perspective.

To give you some real-life examples, we had a customer (and I can relate to this) who shared: 

• Some countries are really bad, with a central team managing that country who just have no clue what they are doing.
• They expect the client to provide all the calculated values (e.g., severance, etc.) and give no input advice or guidance.
• Communication is slow, and can’t get to the real expert.
• Getting the answer, “That’s out of scope” very often, which either means they need to contract for it separately and pay more OR they can’t get that deliverable at all
• They will not be responsible for or support communications with government authorities.
• They charge extra for every report even though the requirements are fundamental and should just be included in the service.

And this is your baby we are talking about. So you’ll want access to the expert.

Why would you want to control who your in-country payroll provider is?

I included this underlying context for those choosing yes (80%):

• ‘Yes’, means you want to choose who the in-country provider is, and you can make changes if needed.

Of course, I fully agree with this, not just because I am now part of the Payzaar family but also because I have the scars to prove it (almost literally).

This probably goes back to the topic of standardisation and flexibility, which you will have read about in previous blog posts. You want to be able to choose the partners that best suit your needs and service levels, down to the local level.

When you are coordinating and managing outsourced payrolls, you work with an in-country payroll provider each payroll cycle. If you are lucky, you may have access to them however some central providers force a middleman to coordinate all data and communications. You want to be in control of the platform you are using (e.g. Payzaar) and who processes the local payroll; you will need them more than you might think.

So, the counterargument I offer here is: Do we have to maintain all of those direct local contracts and contacts? Yes, you do. But how much effort is this really compared to the clear benefits (cost, resources, quality, flexibility, agility) that you gain? Don’t just believe me, believe our customers.

So, what’s next?

I encourage you to evaluate the performance of your payroll providers down to the local level and engage your teams that deal with the operational processes. Are they happy with ALL the local providers, or who would they swap out if they had the choice? Does the business demand you to be flexible and agile to changes? Are you at the risk of breaking standardisation with portfolio changes? Think about it.

Treat the payroll as if it is your baby.