GLOBAL PAYROLL MAGAZINE
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a potion than hammering out pay slips in a manufacturing chain. Also, disproportionate penalties tend to be priced into the proposal by the supplier and, once applied, generate a vicious spiral of effort reduction to contain the damage, further impacting performance. Rather, payroll contracts should focus on a critical few performance metrics and have a thorough process to review the root causes of any issues and implement continuous process improvement actions, both on the supplier and on the Client side Not involving all stakeholders in the decision early on: A payroll provider change is often driven by a single function: most typically HR, but often also Finance, and at times IT. Each of these actors – and others - needs to be consulted in the process, because a payroll provider change will impact them all profoundly. Impacts will be felt on cost of labour accounting, inbound and outbound integrations with the application landscape, IT security and data privacy, employee and industrial relations, relationships with third-party entities and public bodies, etc. Each of these need to be fleshed out in advance of initiating a consultation or publishing an RFP. A payroll provider change is a journey that will have a professional impact on the people involved for many years, and it can be a very enriching experience. Taking care of the basics early on can make a big difference on the success of the initiative.
layman’s perspective a payslip is a payslip, in fact the payroll process is complex and a provider should be seen as a long-term partner. Underestimating the complexity of payroll can lead to: choosing solely based on price compressing the payroll transition project into too short a timeframe Not dedicating enough client- side expertise effort to the project
Overengineering contractual metrics and penalties: this is a
sensitive subject, but I’ll give you my take on it. I’ve seen Clients attempt to introduce dozens of metrics and KPIs into payroll contracts, and then apply heavy-handed penalties, assuming that this creates an “incentive” for the supplier to do their best in delivering service. In fact, metrics are often complicated to measure, difficult to understand and hard to connect directly to the root causes of issues. Payroll is not a linear, mechanical process in which each input has a causal relationship to a single output. It is more similar to boiling
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