Global Payroll: Organization Health Check

Global Payroll: Organization Health Check

Is your business prepared for 2021?

| Global Payroll: Organization Health Check

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Table of Contents

Introduction 01

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2020: A payroll year like no other

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What this means for the future of global payroll

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Your 2021 Global Payroll Checklist

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Page 9-11

Be prepared with Payslip

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Page 12-16

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Introduction

The world changed in 2020 and global employers across the world faced a series of challenges that no risk assessment or business continuity plan could possibly have accounted for.

COVID-19 created a shock to the economy that was unprecedented on many levels- the impact of the global pandemic has been devastating to many traditionally strong industries like aviation and tourism, but no person or business has escaped it. Businesses are adaptable, and in a technology driven era defined by rapid change, they have begun to embrace a new normal that relies heavily on the remote delivery of business- critical services. The full impact of the virus on bottom line profits remains to be seen, but the outlook is far from positive. The actions that global employers take in the coming months will likely have a major influence on how their business performs in 2021 and beyond. This is not a passing phase and it is clear to everyone that going back to the way things were done before the pandemic is unlikely to be an option.

When the global economy last experienced a major crash back in 2008, many of the more enterprising companies looked on it as an opportunity to change track and look at ways to pivot and go in a different direction. History has shown us that innovative, progressive and forward-thinking enterprises can carve out a competitive edge in a market populated with too many companies still reeling from the shock. When it comes to global payroll technology, now may be the perfect time to act and put in motion a digital transformation project to place your global payroll department on firm footing for the remainder of this decade. In this paper, we will reflect on what has happened this year to global payroll operations and processing. We will then attempt to draw some conclusions about what this means for the future of global payroll. And finally, we will provide you with an important checklist that enables you to test and gauge the ability of your global payroll department to meet many of the challenges coming down the line.

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2020: A year like no other

Business practices in 2020 were characterized by the remote delivery of critical services to achieve some degree of continuity. It was a year like no other, where business continuity procedures and plans were severely tested, and technology became the main driver for service delivery. Those who found themselves without innovative technology or relying on legacy systems, struggled to move with the same pace and efficiency as other organizations. Global payroll processing is a mission critical service, so lessons need to be learned from 2020 and warnings need to be heeded if multinational companies are to hit the ground running in 2021. The right mix of people, technology and innovation is needed for the continued delivery of essential payroll services and global employers need to ensure that they are properly prepared to meet demands.

At Payslip, we have learned the following from talking to global payroll professionals and industry leaders during the COVID-19 crisis:

Many payroll departments were not adequately prepared for remote service delivery Many professionals were unable to access the key payroll data and documents they needed

Non-standardized data flows and practices across multi country payroll made it harder to deliver payroll

Visibility, oversight and control issues were exacerbated by COVID-19

There was an increased need for comprehensive global payroll reporting, in particular, country labor cost comparison reporting

Local payroll provider failure was an issue for some employers

The need for global frameworks to be applied, followed, and monitored was highlighted

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Payroll workloads increased as professionals had to deal with local government responses to COVID-19 – e.g. job retention pandemic payments, furloughed staff etc.

HCM/ERP and wider ecosystem platform integration is becoming a priority

Manual inputs and work duplications are no longer sustainable, automation is required now more than ever before

Employee payroll experience was not consistent across countries

2020 has created some clear implications about the future of global payroll delivery, mainly that, to manage it with visibility and control, a technology solution in the form of an integrated platform will very likely be needed. It is unsustainable to continue delivering multi country global payroll with existing legacy systems and a continued reliance on manual processing of global payroll data in a multi- vendor environment. There is too much room for error and too little time in the monthly payrun cycles for efficient delivery. Change is needed, and the sooner the better because nobody knows what the next major economic shock will look like. Now is a good time to take stock, assess options and develop a plan to ensure that the global payroll department is equipped with the right tools and technology to deliver in challenging circumstances. Every multinational company in the world accepts that global payroll failure is simply not an option. It is time to take proactive steps to ensure you are prepared.

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What this means for the future of global payroll

Global payroll faced a growing list of challenges long before the global pandemic hit but the events of 2020 suggest that people in the global payroll industry now understand that technology will become the key driver of payroll operations in the future.

Global payroll leaders are now focusing their thoughts and resources on two key questions:

Do I have in place a sustainable model for the continued delivery of global payroll services?

Is my technology stack fit for purpose and ready to help me manage global payroll operations in 2021?

We already have very strong indications that things will not simply go back to how they used to be in 2021. Some of the biggest names in the industry like Amazon, Google and Facebook have already announced the continuation of their remote working policies and a general question mark hangs over the future of offices. It is now a certainty that global payroll professionals will need to access and deliver payroll services remotely, ideally from a cloud deployed environment. Multinational companies now have a responsibility to ensure remote access to global payroll data and services for business as usual delivery, and also for payroll continuity. Anyone who struggled with remote access and delivery in 2020 must now ensure they are fully prepared for 2021 and beyond. Moving to a cloud-based platform, where employees share access to folders, data and procedures is now a necessity.

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Global employers may also need to consider changing the global payroll model they currently use. Now is a good time to decide if the model in use is the correct fit for the remainder of this decade. Outsourcing payroll or choosing an aggregator services model are popular options among many employers- but these models lack the level of flexibility and innovative technology required to manage a complex multivendor payroll landscape that is subject to change. Evidence suggests that these traditional models are no longer best positioned to meet the employer needs or adapt to a new technology driven normal. These models lack standardization and automation, offer limited reporting, restrict employers to specific local payroll providers, and do not result in centralized management for the level of visibility, control and operational oversight needed by global payroll managers. We are seeing that the current trend is moving away from these traditional models as employers seek a new model that solves current problems in global payroll management while also preparing for a post COVID-19 future. A model that:

Standardizes payroll data and processes

Organizes, stores and safeguards confidential payroll data

Automates workflows to reduce manual error and human risk

Enables cost savings and productivity gains

Delivers consolidated global reporting

Offers centralized management and visibility over global payroll operations

Comes with compliance & data security governance and controls

Builds global payroll process scalability and flexibility

Is flexible enough to accommodate local country requirements

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This model also needs to unify disparate groups including payroll, HR, and IT to create a cohesive global eco-system.

The future of global payroll is a technology platform capable of delivering all of the above. A platform that can integrate seamlessly with existing technology frameworks, manage global payroll complexity while meeting the new demands being placed on payroll professionals as a result of the pandemic.

Multi-country payroll adoption will continue to be driven by demand for modernized, globally consolidated, compliant, and consistent payroll, with vendors differentiating through digital transformation enablers (e.g. breadth of integrations offered, use of RPA, AI/ML, predictive analytics

Next Generation Payroll Services, NelsonHall HR Services, March 2019

Global payroll innovation has often fallen behind due to lack of leadership and executive sponsorship. Covid-19 has served to highlight the essential nature of global payroll delivery. Management level executive support is now more visible, and COVID-19 has resulted in the fast tracking of global payroll digital transformation projects at many global employers. Progressive, forward-thinking companies pride themselves on being ahead of the curve and many are embracing the future of global payroll by moving to a technology platform. Those who do not move with the times will find themselves stuck with an inflexible payroll model featuring technology that is not capable of adequately meeting existing demands and is not at all equipped to deliver in a post COVID-19 environment. The time to act is now.

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Your 2021 Global Payroll Checklist

2021 is likely to be a pivotal year in the global payroll industry as more and more multinational companies look to adopt a global payroll model that features technology innovation as part of an integrated platform that connects global payroll with HCM systems and the wider company ecosystem. In preparation, it is prudent to look at a checklist and ensure your global payroll department is fully prepared to hit the ground running in the new year. Remote delivery and global payroll continuity will be crucial, and the first few months of the new year may well form the basis for the delivery of global payroll for many years to come. We have created this checklist below to help you gauge the suitability of your current resources, technology and global payroll model. This checklist can be a useful guide when putting together a plan for the kind of people, technology and platforms you will need for the successful delivery of multi-country global payroll in 2021.

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Checklist :

Payroll professionals have full, secure remote access to payroll data and can share information using cloud deployed platform tools

C h

C h C h C h C h C h C h C h C h C h

We can change, remove or switch payroll providers onto our platform

We operate with standardized payroll data across all of our entities and countries

Our delivery model uses automation for speed and efficiency

Our platform enables centralized management, full visibility and control

Multiple payroll vendors are managed on a single platform

Visibility is enabled via a single dashboard view and digital calendars

We have self-serve global consolidated reporting and metrics

Clear audit trails exist for task tracking and compliance confirmation

We offer employees self-serve access to their personal and payroll data

Our model enables process scalability and flexibility to support business growth

C h

Local country requirements are accommodated within a global payroll framework

C h

Our payroll data is stored, managed and accessed in a secure environment C h

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Technology, Process and People

If these are the fundamentals needed to process global payroll during business as usual times, then they become truly critical during times of payroll continuity. If you can develop a single platform approach with your technology, this is the foundation for innovation and flexibility when it comes to process. Both global payroll professionals and your network of local payroll providers can leverage the technology and platform to establish a set of processes that can be duplicated across countries. Ensure that the entire payroll department is adequately trained and understands the nuances and capabilities of the technology they are working with. You want the technology to do the heavy lifting and scale the process instead of the man hours. This helps to ensure valuable additional time in the monthly payroll cycle.

Global payroll transformation has become a critical priority as many are now are seeking to futureproof payroll operations by consolidating payroll to a single global platform and vendor governance model.

Next Generation Payroll Services, NelsonHall HR Services, March 2019

This is about aligning your resources with purpose and clarity - ensuring that everybody is on the same page and contingency plans are in place to cover a range of eventualities – e.g. If operations in Germany are experiencing a failure, everyone knows exactly which team will take over payroll processing there on an emergency continuity basis. Powerful technology coupled with standardized data and practices can result in the one thing that is really needed during continuity - employee responsiveness. Global payroll professionals who are part of a clearly defined process and working with capable technology can respond quickly in a proactive manner to emergencies or unexpected developments.

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Be prepared with Payslip

Payslip provides Automation & Integration technology that delivers standardized Global Payroll Management to multinational employers. Payslip technology integrates with HCM & Accounting/ERP systems: automating payroll processes, standardizing payroll data and consolidating payroll reporting. Our platform helps companies to centrally manage their global payroll operations with visibility, control and governance while scaling easily into new countries.

Take a Free Trial

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Payslip helped many clients in 2020 who were struggling to deliver global payroll remotely during COVID-19. We help set these companies up on our platform and ensure that their global team members had full remote access to all data, documents and procedures they needed for effective payroll continuity. The digital tools on our platform also helped ensure visibility of team actions, specific workflows and overall process. Our approach in many cases was to immediately standardize data and practices across all of the international payroll countries so that these employers could implement a global framework of standardized payroll practices. This helped reduce multi-vendor complexity and make it easier for them to manage multi-country payroll when teams were adjusting to a new remote delivery environment. We work fast and our clients are pleased to discover that as soon as a standardization framework is established in one individual payroll country, then a similar process can be rolled out to the other countries in a matter of days. We worked with clients to get the essentials in place so that they could ensure continuity of payroll across all locations- after this, we worked with them on their consolidated reporting needs so that they could see exactly what was happening across all of their payroll countries and make informed decisions based on data.

Payslip Recommendations

Right now, we are advising all our clients to be 2021 ready by ensuring they have all essential global payroll provisions in place:

Identify backup resources internally or externally in different countries Identify vendor countries at risk or underperforming vendors Develop fast track ICP sourcing & setup process in case it is needed Identify key performance indicators for process, team, vendor and payroll health Ensure reporting can show consolidated view of payroll costs and headcount

Cloud platform with structured data & document storage according to country, entity & payroll

Agreed list of ICP contacts and emergency contacts

Agreed internal owner per payroll to take decisions in case of unplanned internal or ICP absence Agreed process for emergency payroll processing in case of payrun delivery failure

Agreed way to switch tasks internally and externally

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Now is the time to move to an integrated global payroll platform and ensure that all data inputs from your HCM system, finance software and payroll providers flow in a standardized format into a single, manageable platform.

This platform should be deployed in a cloud environment where confidential payroll data is stored managed and shared in line with information and data security best practices.

You should be automating workflows so that multi country payroll input, checking and validation needs minimal human contact. You should have digital workflow calendars across all your global countries for a clear line of sight of all tasks as well as significant compliance dates in each country. Your reporting should be global, consolidated and accessible by all authorized team members in a self-serve capacity. We recommend regular scheduling of country cost comparison reports for useful analytics and trending information. Your employee base should be empowered with self-serve access to their personal and payroll information on the device of their choosing. The employee experience should be the same across all of your payroll countries. Above all, you should be implementing a global framework across your multi country payroll operations. This framework should operate on a global level but be flexible enough to accommodate local country nuance. Operational processes within this framework should be scalable and efforts should be made to ensure that multi country global payroll teams are fully trained on these processes so that they can be duplicated and applied quickly in any new country setup processes resulting from rapid scaling activity.

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β€œTo run global payroll as a globally managed function, it requires a common standard or framework across countries. Platform integrations are needed to accommodate local country requirements. We represent a transformative leap from the aggregator service management platforms and standard reporting tools. Payslip enables global employers to unify and integrate multiple local providers onto a single platform while also facilitating comprehensive reporting on a global level. Payslip CEO and Founder, Fidelma McGuirk

Payslip technology will prepare your global payroll team for the challenges of 2021 and beyond. It is designed to solve complex global payroll management problems and help global employers deliver multi country payroll in a smart, secure, compliant and efficient way. Our integrated cloud-based platform is an example of digital innovation in practice. Our experienced team are here to help you get started. For more information, talk to us today.

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