Multinational company? Then global payroll transformation is no longer optional. It’s a competitive necessity for driving business efficiency—not to mention keeping pace with all the regulatory changes around the world.
But overhauling payroll with a centralized solution is complex, and it’s no cakewalk to bring together and standardize payroll processes and technologies across multiple countries, languages and currencies.
How can you ensure your global payroll implementation goes smoothly?
Here’s what you need to know.
What is global payroll implementation?
Just so we’re clear. Global payroll implementation is the process of centralizing a company’s payroll systems around the world with one provider to standardize data, streamline processes and ensure global compliance.
The implementation process typically spans over several months, depending on the scope of the project, which may include HRIS or HCM integration, and requires close collaboration between the company and global payroll provider.
What your internal team needs for global payroll implementation success
Although most of the technical aspects of implementation are handled by your payroll outsourcing partner, your internal project team will need to understand the importance of communication and collaboration to get ahead of change management.
Continuous, centralized communication and collaboration
Centralizing global payroll typically includes a lot of people. With projects and subprojects divided by country or region, it is easy to get overwhelmed and lose track of the deliverables from your payroll provider.
This may sound trite, but when it comes to global payroll implementation, communication is key. Your process should include regular project meetings to bring every team member together to review progress against goals and milestones—for each and every country that will be included in the implementation. This keeps everyone aligned and on track, while also allowing you to head off any challenges as they arise.
Top-notch change management
Overhauling your payroll system to meet global needs will impact most of your workforce. From top-level human resources and accounting personnel right down to hourly workers using your timekeeping system—everyone will feel the ripples of change.
Many companies underestimate the impact of these changes on productivity and engagement. Stay ahead of the curve by keeping everyone in the loop. Roll out training and support programs alongside your payroll program to ensure that all features are understood from the get-go.
How you approach change management will say a lot about the success or failure of your project. With something this big, you need everyone on board to see the intended effects of the change all the way through the organization. What will your employees need from you during this transition?
- Clear and regular communication (we’ll say it again!)
- Training and support
- Standardized procedures and consistency
The role of HCM integration when implementing payroll
Properly integrating global payroll with your HCM or other global HR technology can help your company:
- Ensure compliance with a single source of employee data
- Increase ROI through better user adoption of your HR systems
- Reduce inefficiency by streamlining global processes
- Save time by minimizing repetitive data entry
But proper payroll and HCM integration requires clean and accurate data transfers—a difficult achievement for some multinationals. Why? Some companies customize their HCM data fields by country or region based on local employee data requirements. And these customizations can interfere with data standardization at the global level, creating a more complex integration process.
You can simplify global payroll integration by avoiding HCM data configurations whenever possible and working with an international payroll provider that offers pre-built or country-specific integrations with your HCM.
Implementation best practices to look for from your payroll provider
You need an experienced provider for your global payroll implementation. But how can you judge a multinational payroll provider’s experience? Start by asking about their implementation success rate.
Additionally, ensure they follow these best practices for payroll implementation.
Prioritize countries with largest employee population
The larger your employee population in a certain country, the more complex the payroll transition will be. Prioritizing your biggest countries (population-wise) will help you knock out some early wins. It will also help you to quickly establish a global standard that can be rolled out across the rest of your locations.
Take a phased approach
If your payroll vendor pushes for a “big bang” approach to implementation, that’s a red flag. When too many regions undergo implementation at the same time, you increase complexity and your risk of noncompliance. By focusing on a few countries at a time, you and your provider can reduce the risk of critical mistakes when navigating in-country nuances like currency conversions and data and reporting requirements.
Time things wisely
When it comes to large-scale payroll projects, timing is key. Ensure your new payroll provider avoids mid-quarter deployments to avoid unnecessary complications and errors when reporting to local tax authorities. You’ll also want to align tax quarter and year-ends whenever possible.
Cleanse and standardize data before conversion
At many multinationals, HR and finance teams share ownership of payroll data leading to issues with version control and reliability. To reconcile data discrepancies and initiate a plan for global standardization, your payroll provider will need to work closely with your treasury, finance and HR teams. Ensure your provider comes to the table with a collaborative and transparent process for aligning and signing off on global payroll standards.
With the right partnership, global payroll transformation is achievable. Collaboration with an experienced team of global payroll experts and comprehensive change management help ensure a smooth implementation process and achieve desired outcomes.
Ready to learn more about how your company can ensure a successful global payroll implementation? Get in touch to speak with one of our global payroll experts who can walk you through best practices for implementation success.