Optimizing Your Global Payroll SSC

By iiPay | Updated February 27, 2020


For many years, Shared Service Centers (SSCs) have operated as a cost-saving method to centralize work for certain departments including payroll. In the past, the functions of Global Payroll SSCs has been limited to redundant manual tasks, but with the explosion and accessibility of automation and analytics in the payroll world, companies are reevaluating how to make the most of their SSC and gain additional efficiencies.

The old methods of payroll have worked for a long time, but their continued existence hinges not on their functionality but on a reluctance to change. This attitude hinders greater business growth and hidden costs pile up. Payroll now differs from the payroll of the future, and the technological advancements can be implemented immediately for greater efficiency.

The State of Payroll Today

Our experience sees three common models for global payroll SSCs in the marketplace today. Each has its pros and cons and one may be a better fit for your organization than another:

The Competency Approach

The competency approach says to seat your global payroll team within the office best-equipped to handle it. If your most experienced employees with the greatest skills are in one location, it makes sense to run those functions from that office. 

The Regional Approach

The regional approach groups your operations into regions, so that there are different SSCs covering each region. This can be a very efficient model that relies on the similarities between regions and reduces inefficiencies with varying time-zones and cultural differences.

The Centralized Approach

The centralized approach is quickly becoming the most common approach we see, with one single office operating payroll for all of countries within your company. Centralizing your global payroll management in one office can result in substantial cost savings for your organization, yet it is one of the most difficult to manage and may require reorganizing a large part of your company structure.

A Scalable SSC

All of these models have their own individual constraints and benefits, but the truth of the matter is that payroll efficiency with SSCs has hit a plateau. The technology that most SSCs use is outdated and can’t handle the growing global landscape, especially if the company has not transitioned to cloud-based technology. These older systems and the people operating them are pushed to their limits to accommodate expansion. 

It may be time to take a good look at your current Global Payroll SSC, because you may have hidden costs that are becoming a huge drain on your resources. “Because we’ve done it this way for years” is not a good reason to continue with your current payroll system, and more and more that is the only reason that these systems continue existing. The future of global payroll, like other technology systems, is in the cloud: it’s easy to implement, simple to use, and scalable to keep up with your business.

The Future of Payroll

Saving money is a worthy goal, but that is not the only thing you should focus on when looking at your Global Payroll SSC. Payroll is not just about getting your employees their hard-earned money, it can also bring valuable insights about your business performance. You can create value with your global payroll by paying attention to five different aspects:

1. Cloud Technology

The world is moving so fast today thanks to technology, and your global payroll can lag behind if your platform isn’t up to speed. Cloud-based platforms are the best path to greater standardization, scalability, and efficiency. The immediacy and interconnected nature of the cloud allows for analytical insights not possible with a manual system. Utilize the new technology permeating business to bring value not only to your payroll but to your business as a whole. 

2. Centralization

When operating as a global business with branches or entities in different countries, having all the payroll data at your fingertips is a necessity. In the past, local or regional offices have reported their data in to the SSC, who then has to manually compile the data using different formats and currencies. With a centralized system, you gain access to all of the raw data in one format for meaningful reporting and analytics, allowing decisions to be made on the most up-to-date data around the world.

3. Communication

Isolating your global payroll deprives you of valuable data. Payroll does not exist in a bubble; other departments such as HR and Finance influence payroll, and vice versa. Regular communication between these departments allows you to glean valuable insights, and enables your global payroll team to become a more strategic function in the business.

4. Automation

Reducing manual workload is a major driver of automation in today’s marketplace and global payroll is no exception.  Many people fear the very thought of robotics and automation, but it’s important to understand that it makes certain tasks simpler and frees up time to perform other parts of the payroll process. Additionally, automation reduces the possibility of human error and thus, re-work. All of this can add up to significant cost savings. 

5. Audit-Ready Compliance

Managing laws and regulations in one country is hard enough, and the cost of non-compliance is rising. A cloud-based centralized system ensures that your risk managers and internal auditors are able to track company movements versus new regulations, implementing changes and compliance across the board, and in each of your countries. A centralized and up-to-date system will be able to provide you with proof of due-diligence and help you better prepare for your next audit. 

The Future is Now

Don’t let aging technology hold you back from adding value to your company. Break away from the way global payroll has been done in the past to achieve better efficiency for the future. Take a good hard look at your global payroll and determine if it really covers all the bases – is it technologically forward, automized, centralized and compliant? Is your payroll bringing you new insights into your company? Talk with iiPay about the possibilities that a truly global payroll provider can mean for you.

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