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Global HR & Payroll: Are you in control or being controlled?

Posted by: on 12 October 2017 in Human Capital Management, Multinational & Globalization

In part one and two of this series we reviewed the challenges of global Human Resources (HR) and payroll and how they can impact your cost and flexibility. This blog explores how poor HR and payroll systems and processes limiting the control you have over your business.

Having a global view of the workforce is essential for business leaders, but only very few actually have this. With 37% of mid-sized companies’ data left sitting in Excel (ADP Global HCM Study, January 2014) or similar types of databases, the value of putting all data in one system, accessible to not just HR, but also leadership, managers and employees, cannot be underestimated. Information from fragmented systems is simply not accurate or up to date, introducing uncertainty into key decision making processes.

Financial Controller of Yankee Candle, Rachael Merrett, explains the challenge, “We just didn’t know the information we needed (to know) about our people. Our US (head) office was asking us for more and more information about headcount, what type of people they were (salaried or hourly paid, male or female, or average salaries).”

How standardised are your global HR & payroll systems?

Data visibility and a standardised set of processes enables companies to make real time, business critical decisions and focus on the strategy of your company. HRIS Manager EMEA of Covidien (now Medtronic), Dierk Russell, notes, “With consolidated reporting we know obviously a lot more about our payroll than we ever were able to do. Even with a good finance system and good chart of accounts the type of analysis we have today is far beyond what we used to be able to do.”

Visibility into the overall workforce is key to track key metrics and provide insights. A single data repository that enables reporting and analytics requires integration of HR data, common policies, processes and tasks into one platform.

The Webster Buchanan Research report, ‘Multi-country Payroll: Analysing the Business Benefits and Challenges’ identifies that “every international payroll function is geared up to meet unique local regulatory and business requirements, they tend to evolve on a country-by-country basis, with little standardisation around best practices and processes.” Most multinationals will use a mix of in-house and outsourcing. “In a large company operating in a dozen countries, for example, you could easily find 15-20 different processing partners.” It can be difficult to get visibility into individual payroll operations, ensuring they’re all compliant and guard against fraud.

For Yankee Candle there has been a massive impact, “Now, I can run ad-hoc reports, I can write reports, and I can interrogate the data all of the time. We can now extract reports that talk to our finance system. This has paid dividends because now we can easily put wage data into our ERP system,” says Rachael Merrett.

Centralisation is the key to streamlined service delivery and an HR operating model which world-class organisations are seeking to embrace. A network of in-country payroll specialists with deep knowledge of local legislation and HR details would lighten the load of shared services centres or local subsidiaries. By finding new ways to help maintain compliance and mitigate risk, improve business process efficiencies and, ultimately, help to drive organisational growth and international expansion, HR can demonstrate the strategic value they provide to the company.

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TAGS: global HR strategy HR analytics Human Capital management international payroll multi-country payroll

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