Who we spoke to for this case study:
- Robert Falkner, Group Head of Payroll of Mercury Engineering
Mercury Engineering is a fast-growing engineering company based in Dublin, Ireland. Founded in 1974, the firm specializes in complex engineering projects for high tech businesses, such as the design, construction and maintenance of hospitals and hyperscale data centers.
Over the past few years, Mercury has achieved substantial growth, going from being a primarily Irish company to a truly global one, capable of taking on bigger and more complex projects in many new countries. Of course, headcount and geographical footprint have grown in parallel, presenting new challenges for Mercury’s payroll department.
As part of the company’s maturation, leadership decided to put greater focus on payroll, developing and implementing a concerted global strategy and critically examining its existing vendor relationships and processes to detect opportunities for improvement.
The challenge: Poor responsiveness, lack of local expertise, and strict cutoffs, all within a complex payroll environment
Like many multinational businesses, Mercury Engineering used a global payroll aggregator to run its payroll. However, they suffered from poor quality of service and restrictive conditions that put the in-house payroll team under an undue amount of stress.
In addition to the regular monthly payroll that covers roughly 40% of the company’s employees, Mercury also operates a weekly payroll for over one thousand employees working in the execution of the firm’s engineering projects.
With the global provider they used for the monthly payroll, they had very early input dates, so the monthly cycle took 3 weeks, while weekly payroll was continuous. Because of this, payroll couldn’t operate at the same speed as the business, causing operational inefficiencies and friction in its expansion.
For payroll to be delivered on time, data needed to be submitted during the first week of the month. This meant the payroll team had only one week between the end of the previous month’s cycle and the beginning of the next to compile data, prepare it, and troubleshoot any issues.
However, even though Mercury adapted its internal processes to accommodate their provider’s very strict requirements, the resulting payroll was still of poor quality.
“One of the issues we were facing with the global provider was a lack of local knowledge. Some countries were great, whereas with others it wasn’t there, just robotic programmed answers from people without that specific knowledge.” – Rob Falkner, Global Head of Payroll
Mercury’s provider lacked local expertise in certain countries, which meant they delivered payroll with errors and were unable to respond satisfactorily to time critical queries.
Customer service was also too slow for Mercury’s needs. The relationship with the local experts doing the processing was mediated by a middleman, which meant processing time was even slower due to no direct contact.
It sometimes took weeks to get queries resolved, which meant Mercury often had to pay for services that they knew might not be 100% accurate, but didn’t have time to edit because of the tight deadlines.
What’s more, many of these issues were reported by the Mercury team, but the provider was unable to fix them due to the locked-in model with many inter-contractual relationships. Because of this, issues became chronic and the team was forced to work around them.
To address these challenges, Mercury decided to radically change its global payroll strategy. Instead of working with a single global provider for all of its payrolls, leadership decided to migrate to a group of best-of-breed local providers managed through a payroll management technology platform.
The solution: Improving local expertise, responsiveness, and customer service with specialized local providers
Due to their negative experience with an aggregator model of outsourced payroll, Mercury decided to change to a different approach: using best-of-breed ICPs for each country and running their payroll operations through a global payroll management SaaS platform.
To be able to support this model, Mercury needed a technology platform to bring together all of their providers and payrolls and establish strong central governance.
“Our two requirements: Local experts, but one centralized piece of software. That’s why Payzaar ticked both boxes for us. We get the local knowledge, but we can also pick and choose who we go with, we’re not stuck with what the providers choose.” – Rob Falkner, Group Head of Payroll
To accomplish this, Mercury decided to work with Payzaar, implementing our modular global payroll management solution and integrating its newly chosen providers into the Payzaar platform.
By working with specialized in-country providers, Mercury was able to benefit from much better local payroll expertise, which eliminated the accuracy issues they had been experiencing.
Likewise, by removing the middleman between Mercury’s payroll team and their providers, they were able to shorten incident resolution and query response time to a maximum of 24 to 48 hours instead of days to weeks as it had been with the previous provider.
But most importantly, they were able to gain a huge increase in deadline flexibility, pushing back monthly deadlines by 7 to 10 days, which made the work of the payroll team a lot easier.
The Results
1. Massive processing time savings: Mercury has reduced processing times by 7 to 10 days every month, and they have been able to push back cut off dates by 10 to 14 days. Thanks to this, the internal payroll team is under much less time pressure, which has allowed them to work more comfortably and improve accuracy and performance.
“We’ve saved between 7- 10 days per location on processing time, which is huge, it's basically gained us a week.” – Rob Falkner, Group Head of Payroll
2. Costs reduced by half: Cost per payslip has been reduced by 50-60% in comparison to Mercury’s former aggregator provider.
“In fact, our quarterly Payzaar costs are the same as what our monthly costs used to be with the previous provider.” – Rob Falkner, Group Head of Payroll
3. No more second runs: Mercury has been able to eliminate additional payroll runs that used to be necessary to get accurate outputs. Currently everything is processed in a single run because the accuracy of their new providers is much higher and queries are answered in a timely manner, allowing the team to make corrections before cut off instead of fixing issues after payroll has been processed.
“It makes a huge difference that we don’t have to do supplementary runs anymore, now we can trust that all of our payrolls are being run 100% correctly the first time around.” – Rob Falkner, Group Head of Payroll
4. Improved general ledger accuracy: GL files are now accurate on first run thanks to better quality data and integration. In the past, Mercury had to generate double the number of reports to get accurate GL’s, but that is no longer necessary because the payroll outputs these are built with are much more accurate now. Additionally, GL production is fully automated as part of the regular payroll process thanks to Payzaar’s GL automation function.
5. Reduced employee queries and self-service incidents by 10x: Since implementing Payzaar, employee queries about access to documents, payslips, and device incompatibility issues have decreased by 10x.
6. Adding new countries has become much easier: Since implementing Payzaar, Mercury has added two new countries, Finland and Israel, and spin up has been fast and frictionless. Payzaar provided some enablement training, but the entire setup process was handled by Mercury’s payroll team.
Conclusions
By adopting a hybrid payroll model, decoupling technology from service while at the same integrating data and processes better, Mercury Engineering has been able to resolve the serious issues that were hindering its global payroll operations.
The results have exceeded expectations, improving efficiency, processing speed, accuracy, and employee experience while drastically reducing cost – a slamdunk business case for a successful payroll transformation project.
“It’s a lot more flexible and easier to use than the old portal we were using. And it saves time, it saves work, and we know where everything is as it’s all in one place.” – Rob Falkner, Group Head of Payroll
