Multinational employers should strive to streamline payroll processes as much as they can among the countries where they operate, but country-specific payroll considerations should be recognized when planning and implementing standardization plans, a group of payroll directors said May 17.
Before implementing a planned payroll process standard to be used in all of an employer’s countries of operation, the employer should examine whether any of the countries or local jurisdictions within the countries have a legal requirement or custom that would cause implementation of that process there to be inauspicious, said Alex Chudnovsky, vice president at SAP SuccessFactors.
Payroll personnel should actively communicate with human resources colleagues to acquire country-specific data that may be relevant for determining the degree to which a planned payroll process standard may be feasibly implemented, Chudnovsky said at the annual American Payroll Association Congress in Orlando, Fla.
Employers should analyze how the global payroll process standards they would like to implement may be adjusted to accommodate a country-specific or local requirement or custom, said Kathleen Williams, CPP, regional payroll lead at NGA Human Resources. For cases when it would be less efficient to adjust a planned process standard to accommodate a country-specific or local element than to not modify the planned standard and separately comply with the country-specific or local element, employers should develop a sufficient compliance plan for that situation, Williams said.
“Go global where you can and local where you must,” Williams said. “With that approach, most organizations looking to globalize can be quite successful.”
When there is an abundance of country-specific or local requirements that conflict with practical implementation of an employer’s planned global payroll process standard, the employer’s payroll team should evaluate whether implementing the planned standard without modifying it to accommodate country-specific or local requirements still would enable the employer to achieve its qualitative or quantitative targets regarding standardization, said Jeffrey J. Brown, a partner at Ernst & Young LLP.
Global payroll process standards should not be arbitrarily established, and instead should be designed to fulfill discerned strategic goals, said Laurent Botella, senior director of product strategy at Workday Inc. It is tactically advantageous to acquire support of an employer’s country-level and local leaders for implementing a proposed payroll process before that process is initiated, as their advance knowledge of the proposed process and input regarding the process can increase efficiency of the implementation, he said.
Assessing the comparative viability of third-party vendors for implementing country-level or local solutions to accord with an employer’s desired global payroll process standards is an integral part of implementing the standards, Botella said.
Determining the comparative priority of country-specific and local payroll data elements that an employer wants a third-party vendor to collect as part of achieving global payroll process standardization and overall compliance may assist employers with discerning which vendors would be most helpful to their global payroll operations, said Mary Brumm Holland, CPP, global director of strategy, development and training at the Global Payroll Management Institute, an affiliate of the American Payroll Association.
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