Global payroll implementations can be more successful by following ten “golden rules” around planning and managing available resources, a payroll consulting manager said May 12.
The ten rules originated in observations that implementations often did not keep to timelines and budgets, as well as conversations with global payroll managers about their experiences, David Longworth, a manager of global payroll consulting at PwC UK, said.
“I’m here to tell you that global payroll projects really are special and different,” Longworth said at the American Payroll Association’s 40th Payroll Congress in Las Vegas.
Global payroll projects require input from IT, HR, finance, and vendors, and employees are of course interested in the outcome, Longworth said.
All global projects have some characteristics in common, including working with multiple countries of different sizes, multiple systems to integrate with, and some level of outsourcing, even if “it’s just the system,” Longworth said. The business remains responsible for compliance even though vendors are involved, he said.
Businesses should monitor the quantity and quality of resources on the vendor’s side, including response times because of location, and ensure continuity if personnel may be switched out, Longworth said. Negotiation and compromise is required from both sides, he said.
When trialing or demoing a project, or creating a proof of concept, it should not be separate from the project, Longworth said. “When you complete that successfully, it should roll into the project,” he said.
Businesses do not always document the scope of the project, Longworth said. “I’ve lost count of the times that we’ve asked clients for the scope of work or their contract and just don’t have one, they can’t find it, or maybe it’s just a letter of intent they signed,” he said.
A letter of intent will not have enough detail to be useful to the project, and businesses should not make assumptions about roles and responsibilities, Longworth said.
Payroll projects are frequently pushed back in favor of other projects, whether for those critical to the business, for other payroll obligations such as year-end, or because of unavailability of other company stakeholders such as finance, Longworth said.
“This is an inevitability, it’s a fact of life that we have to come to terms with in payroll, I’m afraid,” he said.
Businesses should “plan for the unknown” and consider what other resources they can call upon in such situations, Longworth said.
A lack of alignment between central teams, who are more remote and more reliant on local teams, and local teams, who are less subservient and less connected to central teams, can be mitigated by involving local teams in projects and process design, Longworth said.
The business can design a global standard process and ask the local team if it would work in their country, Longworth said.
Additionally, some global payroll managers reported attempting to continue their day jobs during a project implementation, rather than fully taking control of the project, and admitted either burning out or performing suboptimally at their day job, Longworth said.
“The best person for the job is you as a payroll person,” who understands the requirements and has the connections for the project, “but also the worst person to do this job is you distracted,” Longworth said.
Fundamentals and Data
Businesses still do need the fundamentals common to every project for global payroll projects, including setup, preparation, planning, process design, data migration and testing, documentation, and consideration of lessons learned, Longworth said.
Payroll borrows data from other areas of the company, such as HR, finance, and IT, Longworth said. Project participants should not make assumptions about data, including its accuracy or consistency, that it is suitable for payroll processing, that it can fit into templates, or that it can be sent directly to local systems, he said.
However, 80% of payroll processes are common across countries, Longworth said. “There is a huge value to be delivered if you can standardize those common processes,” he said.
When designing processes, Longworth recommended coming up with a global process and then allowing exceptions for reasons of statute or customs.
Finally, the business should go beyond normal risk analyses and “make provisions for specific contingencies that you think might be material” to a global payroll project, also taking lessons learned from each country or group of countries to the next, Longworth said.