“Embrace the coming disruption,” said best by Rob Bernshteyn, CEO of Coupa.
In the world of international payroll, disruption is here. We’re in the thick of a global payroll revolution which could leave some companies obsolete. Here’s a bit of data to back this theory.
Eighty-eight percent of the companies on the Fortune 500 from 1955 to present day have disappeared. The average life expectancy of a Fortune 500 company has dropped from 33 years in 1965 to 18 years in 2012. The rate of disruption is so explosive it’s changing the game for all industries. Moreover, I’m thrilled disruption has come to global payroll.
Hi, my name is Angela and I’m an advocate of disruption. At the end of this article you’ll walk away with two things:
- How to identify “status quo” payroll
- How to fix your global payroll process
First, let’s address the elephant in the room and talk about what’s broken with global payroll. For many years, global payroll has remained a broken system. International payroll options were lacking. As companies expanded into new markets they were forced to grow in a fragmented strategy.
The common challenges to this system are: disparate technologies, language barriers, lack of standardization or consistency and lack of global reporting. Through the years, we’ve seen global payroll evolve from singular providers to aggregators which solved some of these challenges. However, it’s a temporary Band-Aid and not enough to make a difference. It’s referred to as “status-quo payroll” simply because nothing better was available.
Identifying status quo payroll:
Let me guess: You work with local payroll providers in 10 countries, with 10 different people, who speak in different languages, who ask you to provide payroll data in 10 different ways, and who work in different time zones. That’s status quo payroll.
You naturally want a provider that will give you a one-stop shop. A single point of contact for all countries, who’s fluent in your language, who gives you a standardized method to input all payroll and who works in your time zone. That’s when you hear of an aggregator model and think it will solve all of your problems, but its complicated. Here’s why.
An aggregator works with pre-selected local providers in the countries you’re in. Therefore, the aggregator is still faced with the challenges you were once faced with; different languages and different time zones, etc. The “fix” for status-quo payroll has always been duct taping the broken system with technology rather than revolutionizing the system. How can this be when we live in a day of autonomous driving and home management systems like Alexa?
This is why I’m passionately fighting in the revolution to ensure status-quo payroll becomes a thing of the past. So, how can you make a difference for your company?
- First, you should know what you’re getting for your money. You should be able to point to a specific return or value, and if not, you’re wasting your money.
- Make sure the value is tangible. It’s not always about how much money you can save, but it needs to be something explicit you can point to. Tangible value is repeatable, measurable, and simply makes things better than before. After all, if it’s not going to improve anything for you and the business, why do it at all?
By seeking tangible value, you are helping your company do well, and in return, you will do well.
Fixing your global payroll process:
Disruption is moving at the speed of business. Your company leaders are all trying to stay ahead of the competition they’re doing what it takes to be more innovative, creative, diverse, faster and better than your competitors. Do you think they wait to see what their competition does and then follow as laggards? Of course not. They want to be seen as visionaries and disrupters themselves
They’re looking for revolutionary solutions to transform their business. And guess what, they want to surround themselves with people who are the same way. The fastest way to becoming obsolete is recommending and implementing a status-quo service for your employees because it feels safe. This impacts your valued employees, and when they’re not happy—it’ll affect your retention strategy and your attrition will quickly escalate. Attrition means losing intellectual property, reduced morale, low productivity, added recruitment costs… and the list goes on and on. In this talent shortage we’re in, recruiters on LinkedIn are circling your most valued people waiting for the right time to talk to them about a “better opportunity.”
Status-quo payroll providers are all the same. They don’t have real technology to offer, there’s no reporting capability and everything is manual.
My thesis is this: If you inherited a status-quo system or service, change it. Don’t be comfortable being ineffective and waiting for change to happen. Just as you expect tangible value from your payroll provider, your leaders are expecting it from you. Push your current provider to relay the value they provide. If they can’t explicitly tell you, it’s time to look up when their contract is up for renewal because you don’t have to accept the status quo anymore.