As multinational organizations become more complex, with larger workforces and more payrolls to manage, the amount of manual revision and data reconfiguration required to process payroll grows exponentially.
Reviewing every line item by hand, eyeballing all elements to locate missing data or possible errors, and double and triple-checking each employee file for each entity becomes a Herculean task in this context –but what if it didn’t have to be this way?
Let’s look into how a technology-enabled, Platform-as-a-Service (PaaS) approach to global payroll can help teams reduce the time invested in administratively heavy tasks by surfacing issues within payroll automatically.
The challenges of managing global payroll
Independently of the specifics of each organization’s setup, global payroll is not short on challenges.
The Payroll department is expected to get the payroll process right every single time, so the strive for perfection never ends.
To get there, having a greater amount of control over the whole process is essential, and therefore becomes the goal of most Global Payroll departments, where dealing with multiple platforms, providers, and stakeholder partners, all of them with different timelines and jurisdictional complexities, is the norm.
The result? The Global Payroll team has to face complications such as:
- Fragmented and manual processes;
- Lack of central governance and control;
- Lack of consolidated reporting;
- Information security and data protection risk;
- Constantly changing compliance obligations;
- Many challenges connecting Payroll with HR and Finance systems.
“We are primarily responsible for ensuring that people are paid correctly, although many of the elements necessary for calculating an individual’s pay, the accuracy of every payment, relies on data and data sources that are often -nearly always- beyond our direct control and within the wider business”, explains Payzaar’s VP of Global Sales, Alan Moratelli. “Here lies the key challenge we have to manage daily: data and its volume, its uniqueness, its formatting, its existing sources, and, of course, its ownership.”
In the current context, in the post-pandemic world, “payroll is more challenging than ever; especially managing multi-payroll instances, stakeholder expectations, and mixed infrastructure landscapes. Businesses don’t need to be convinced of the need for the right tools to keep pace, become more agile, and deliver stakeholder ‘on-demand’ services that are plug and play.”
The challenge is, then, explains Alan, “figuring out how do we put all these tools and services together coherently. And what I hear lately is that there is a lot of smoke and mirrors, but not enough tangible support for payroll’s daily operations, not enough to deliver real value at pace.”
What options do we have? Re-engineering, Managed Services, and the PaaS approach
The importance of data in payroll, which was previously referred to, is clear. “If data is the key to unlocking many advantages, then all we simply need to do is turn that key and start our engines! But nothing is that simple, right? There are many keys across the organization and they all work differently”, states Moratelli. “One option to address this situation would be, of course, getting everybody to use the same key: re-engineering the whole organization or, at least, those components critical to driving payroll and HR data along the employee lifecycle into the processing engines. Only then, end-to-end control would be consistent, measured, and timely, with data ownership and validation. The exchange of information along this process would then be seamless”.
This could be a solution to many, if not all, global payroll challenges. But this is not an easy solution, and in most cases, not even a realistic one. “There are far simpler approaches that can deliver transformation without re-engineering or going through unnecessary changes”, explains Moratelli.
“Data is the single biggest reason why in-house processes fall over or fail, so the situation could be addressed by outsourcing through a BPO/Managed Services option, which would make a third-party responsible for the process.”
But does this actually solve the problem? As Alan explains, “outsourcing mainly passes the problem for another one to solve it. And they may succeed at it, but at a significant cost in both terms of time, investment, and employee satisfaction.”
None of those two choices comes without their challenges, so let’s look into a third option: deploying a Platform-as-a-Service approach.
“When working with an open-standards platform, the existing processes, tools, partners, and infrastructure can remain the same. What we are doing is applying a layer of controls that provides options to smooth those areas that need the most attention.”Alan Moratelli
This layer of controls we are referring to could be, for instance, operational controls across the globe for all partners involved in the payroll process.
Or a reporting and analytics layer that gets plugged into your existing infrastructure to consolidate data relevant to Payroll, HR, and Finance. This would offer great opportunities to report on all of the organization’s employees, regardless of processing options, partners, or vendors used.
Deploying this over your existing infrastructure, clarifies Moratelli, “can be as simple as providing integration and automation options with your existing HRIS and Finance system.”
“These are options delivered simply by automating data flows to and from your existing HR and Financial systems, allowing you to connect not only your corporate central tools like Workday, or Oracle, but also local tools used for your benefits or expenses, time, leave, bonuses, equity… all those elements that we have to gather in addition to the central tools –all at an automated standard. And the same for your corporate general ledger, regardless of your Finance system.”
“The PaaS approach, I think, answers so many questions quickly, simply, effectively, and without the pains of the other two options. Only this approach provides organizations with time to value and agility to change out the underlying technology at the pace that suits them… that is, if a change is even needed, since with this very technology on top of the layer that you already have today, you can actually bring about change without change,” confirms Moratelli. “This type of transformation is very forward to implement and returns both time to value and tangible benefits quickly“.
Would you like to know more about the benefits the PaaS approach could bring to your organization? Book a demo today and one of our specialists will show you our platform in action!