Implementing global payroll can be an overwhelming undertaking, yet the benefits outweigh the temporary challenge of gaining local buy-in. One of the biggest benefits to global payroll is the automation that simplifies formerly manual tasks such as data aggregation, decreasing their processing from days to minutes. Other benefits include stronger compliance, global visibility into payroll, a standardized platform, the ability to analyze data and cost reduction. This leads to a more strategic approach of using payroll data to align with corporate objectives regardless of location.
But how do individual countries buy in to the upfront work that achieves global payroll? Given the wide range of benefits, it seems like a simple decision to make, but many of your local payroll departments may have misgivings about the new initiative. These insights provide advice on establishing a collaborative process with each country within a company that is pursuing a global payroll strategy.
Significance of Country Buy-In
With local support, the implementation process will save time and money (and headaches). One step many companies overlook is communicating up front about commencing such a large project. Each country’s payroll team needs to understand the big picture about what global payroll will accomplish, what this means to their day-to-day role, what time demands will be expected and how their role changes after implementation is complete. Seems like a pretty basic concept, but this is often one of the key failures that lead to long, drawn-out implementations fueled by lack of engagement and confusion, and often turnover.
As a first step, engage with each country (preferably in person) and interview the leadership team with these types of questions:
- What features and functions will help them be more productive in their daily responsibilities?
- What are their primary pain points?
- What types of information would they like to have more readily on hand?
- What are the advantages of knowing other country’s payroll procedures? (i.e. ex-pat payroll, regulations and compliance, etc.)
- What processes are inefficient?
Use the answers to these questions to drive the framework for communicating the decision to implement an integrated payroll system. Involving the in-country payroll departments results in more buy-in, better cooperation, active engagement and smoother implementation. We like to think of it as building partnerships. Supplemented by a rigorous change management plan, these are the driving forces to a successful global strategy implementation.
We recommend a virtual global forum of all key stakeholders that addresses these topics:
- Present the business case: why this makes sense, why now, how this helps them as a company and as individual payroll departments
- Benefits of standardized processes and technology: automation that helps in-country payroll managers become a more strategic role within the company
- Change management process: how the implementation will work, how they provide input, where they submit questions, who is sponsoring the project
- Employee experience: address the goals of payroll as they relate to paying employees on time and accurately, the impact of missing payroll – from fines to morale or turnover
As a best practice, we believe transparency and accessibility are absolute “musts” in projects that impact multiple countries and so many stakeholders. One means of accomplishing this is publishing a project plan on a company’s intranet where employees can access announcements, progress and key milestones. Transparency is key. Celebrate important milestones to keep everyone motivated and on task.
Empowering Key Stakeholders
Power as a Tool
A local payroll team has a lot of power and control over their current processes. Typically they’re used to doing things their way with their own oversight, and a global payroll initiative can be perceived as taking some of that control out of their hands. Appoint a key stakeholder in each country so they have a voice. This leader will be a liaison with the central project management team. This helps the centralized team gain valuable insight into the nuances of each country’s payroll process, such as tax legislation, compliance, pension, social security or sick leave.
Power Users as Enablers
Part of a global payroll initiative is the introduction of new processes. It will take time for your local team to learn new payroll processes, which can be difficult when you take into account how busy they are, as well as how long your current payroll process has been in place – how ingrained the current habits are.
One successful implementation method is training ‘power users.’ These team members have extensive experience with the new payroll system and can help other users better understand the system. Your power users can also work with the local SMEs to help each team best use the system. This also has the benefit of getting more employees behind your new system, advocating its benefits to others.
Understanding Budgeting and Cost
Implementing a global payroll system will save your company a lot of money in the long run, but it does involve incurring up-front costs to do it right. Realize that this can be a concern for some local payroll teams who have tighter budgets. The company needs to plan for this in advance so it’s not a barrier to success. We typically suggest that the company subsidizes the costs at the local level rather than burden each country’s budget with an unplanned expense.
Despite the up-front cost, it’s important to emphasize the long-term cost-saving nature of global payroll. A centralized, cloud-based global payroll solution saves costs by streamlining processes and lowering error rates.
As a preliminary step, it’s critical that each country begins collecting documentation to understand unique country-specific requirements. These are examples of what types of information helps pave the path for the global payroll solution to work effectively:
- Withholding tax policy (sometimes per region or state within a country)
- Holiday, sick and leave policy (including if fraternal leave is included)
- Double taxation
- Employment contracts (including independent contractors)
- Pension and social security
- Legislation changes
- Employment and labor laws
At iiPay, it’s not just about the business of executing payroll, it’s about knowing a company’s employees are taken care of. Errors in payment can impact morale, leading to disengagement or unnecessary turnover. Employee satisfaction is critical to retaining talent. Employees rely on proper payment for retirement savings, putting kids through schooling, paying medical bills and protecting their credit scores by paying bills on time. Employees need to rely on their employer for on-time accurate payment, not a stress inducer. Beyond that, a company can face legislative penalties for incorrect payment, incurring unnecessary cost.
Rolling Out a Successful Implementation
While the key stakeholders are obviously the payroll departments in each country, a global payroll solution involves other essential functions. Bringing these functions in at the planning phase yields better results so they are just as “bought in” as the payroll employees. And like getting local buy-in per country is key for the payroll managers, it is likewise important for other functions that will be impacted, such as IT and Finance. If this is an after-the-fact surprise that their involvement is needed and may “bump” other priorities, they are less likely to provide the level of engagement necessary to complete the implementation on time and within budget.
Other key functions include these roles:
- Corporate Finance, VP of HR, CHRO – usually one of these roles signs the contract
- Finance Shared Services
- C-suite (especially CEO, CAO and CFO) – need to be aware of the changes and appoint an executive sponsor
- Payroll managers per country
- IT and HR directors at both the corporate and country level
- Risk, compliance and audit team
- Internal communications to roll out the announcements (or HR)
- Business unit leaders
The Power of Buy-In
Imagine a time when a big change was announced and it was a surprise. Most people react unfavorably, wondering “Why wasn’t I made aware?” “Is my input not valuable?” “Am I not as appreciated to the company as I thought?”
When in-country employees understand the potential of a global payroll implementation and they’re asked their viewpoint, the implementation goals become much more achievable. Naturally, employees want to understand “what are we doing and why?” Through that understanding gains the confidence to succeed. This keeps the team focused and moving steadily towards a shared goal.
In our recent Driving Change Management white paper, we address the steps to embarking on far-reaching change. iiPay partners with companies to offer our knowledge to help smooth the global payroll initiative process with local teams and to better understand the vision. We can also, alongside in-country SMEs, provide insights into local legislation to improve compliance. Contact us today to find out how global payroll improves your business.