Building a Global Payroll Model
Charlotte N. Hodges, CPP
Agenda
Challenges
Strategic Factors
Global Payroll Strategy
Global Payroll Model
Key Partnerships
Expatriate Pay Delivery
Resources
Challenges
Diverse Global Payroll Delivery
• Varying levels of quality and controls
• Skilled payroll resources are limited in smaller
countries
• Large range of tools supporting Payroll and HR
processes often not integrated
• Limited or no growth potential
Challenges
Diverse Global Payroll Delivery
• Global visibility of payroll controls
• Achieving “economy of scale”
Strategic Factors
Global Payroll Profile
• Single Country vs Multi-Country
• Number of Countries
• Number of Employees Per Country
• Localized Employees vs Temporary
International Assignees
• Payroll Schedules by Country
Strategic Factors
• Define the Global Payroll Operating Model
What does this mean to your organization
• What is Payroll?
Consistent global payroll definition
• Determine Required Capabilities
Future payroll operating model
• Create Roadmap
Document the vision and build the roadmap
• Identify Quick Wins
Determine objectives that can undertaken quickly and easily
• Develop Business Case
Strategic Factors
• Align to Overall Business Strategy
Corporate
– Provide evidence and justification for continuing with the investment proposition
– Does it make economic sense?
– Will the organization obtain economies of scale? – Will it be suitable in terms of the corporate
environment and capabilities?
IT
– Align with IT infrastructure and support structure
HR
– Support HR transformation strategy
Finance
– Support ongoing efforts to provide financial analysis and insight to support corporate decision making, while also meeting legal and regulatory
Strategic Factors
Service Delivery Options
• Outsourcing Options
Aggregator Model
– Single Vendor – sub-contracted payroll services through the prime contract
– Could be considered within a global or regional hybrid model for smaller population countries
Strategic Factors
Service Delivery Options
• Internal Approach
Utilize organization’s ERP payroll module
Provides a standard platform and integration across HR and Finance
Leverage regional service centers
Global Payroll Strategy
What is a Global Payroll Strategy
• An internal structure that supports paying
employees globally
Why implement a Global Payroll Strategy
• Minimize risk, streamline internal processes and
support the organization into the future
• Align global payroll objectives and strategies
with company initiatives
Global Payroll Strategy
Getting Started
• Outline desired future-state payroll operating
model
Required Capabilities
Roles and Responsibilities
Core Processes
Compliance Factors
Technology Requirements
Financial Metrics
Global Payroll Strategy
• Understand Current Position
Create list of current payroll processes
Further develop incomplete documentation and create any missing documentation
Update or create process mapping documents
– Visual representation of entire process from start to finish
• Research Best Practices
Look at other companies of similar size, market sector, footprint, demographics
• Outline Next Steps
Global Payroll Strategy
• Develop Business Case & Roadmap
Provides understanding of current state
operating model
Captures the reasoning for initiating the
project
Global Payroll Strategy
• Develop Business Case & Roadmap
Defines a delivery framework that provides a
prototype payroll strategy in each region
Details assumptions
Includes a gap/needs analysis
Concludes with recommendations and next
steps
Global Payroll Model
• Considerations
Corporate Culture
– Shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature
Language & Communication
Global Payroll Model
• Considerations
Time Zones
– Keep a matrix of time differences
Global Payroll Model
• Payroll Best Practices
Central Governance Standards
– Policies and practices by which an organization is directed and managed at the executive level, with particular focus on the executive board's
accountabilities to shareholders and other stakeholders
Risk Management and Mitigation
Global Payroll Model
• Payroll Best Practices
Process Standardization
– Provides a means to ensure consistency and
Global Payroll Model
• Consistent Governance Model
Global Approach
– Works for varying markets and local requirements – Standardization driven by a single source of data
• Technology Platforms and Processes
Leverage technology to reduce or eliminate manual intervention
Develop global process blueprints - define standard methodologies and approaches
A means to streamline and reduce overhead costs
• Scalability
Ability to act quickly to changing business landscape Mergers & acquisitions
Global Payroll Model
• Dependencies
Payroll as an end-to-end process has a foot in both HR and Finance (Corporate Accounting)
Technology Platform
– Integrated solution versus interface to separate in-house payroll solution or outsourced payroll solution
– Time and Labor
• Staffing Resources
Skilled payroll resources limited in small countries
– Operate within global payroll model
– Operate within framework of distributed service model
• Identify Key Partnerships
Global Payroll Key Partnerships
• Vendor Consolidation
Make certain that products and services that are purchased meet certain quality and performance standards
Reduces the company’s efforts to manage vendor relationships
Control Costs – costs become a known quantity by dealing with the same pool of vendors on a repeat basis
Expatriate Pay Delivery
• Shadow Payroll
Employee receives 100% of her/his pay in the home country
Payroll is “shadowed” or “mirrored” in the host country for the purpose of calculating, remitting, and reporting host country taxes
• Split Payroll
An arrangement under which funds are paid to an employee from both home- and host-country payrolls
• Split Delivery Payroll
Resources
• Where can you find information?
American Payroll Association
– Webinars
– Guide to Global Payroll Management (eBook) – Global Payroll Management Certificate Program – Annual Congress
– Local APA Chapter Affiliation
– Strategic Payroll Leadership Task Force (SPLTF) Global Issues Sub-Committee
• Subscription Services
Bloomberg BNA
– International Payroll Decision Support Network
Custom Research, Country Primers, Strategic White Papers, News & Updates, Vertical Search,
Questions
Charlotte N. Hodges, CPP
