Companies that consolidate their global payroll operations into a shared-services model benefit from the augmented standardized processes and easier data transmission that result, payroll directors said May 15.
Administrative operations that otherwise would be performed in many places, by many people are reallocated under the shared-services model into a unified process that is performed at fewer places, by fewer people or at one location by one team.
For global payroll operations, the shared-services model involves multinational companies replacing numerous country-specific payroll operations with a central shared-services center or a series of regional shared-services centers, said Robert Gerbin, CPP, vice president and global payroll leader at Wells Fargo Bank & Company.
Practitioners working in a shared-services environment can leverage electronic payroll systems to interface with operations in multiple countries rather than rely on the many, different electronic payroll systems that vary among countries, Gerbin said at the annual American Payroll Association Congress in National Harbor, Md.
Reducing the number of electronic systems that a company uses for global payroll processing simplifies for its payroll officers the training needed to operate across the company’s payroll systems, and the electronic standardization also makes it easier to track data that may be used to further streamline processing, Karen Myers, senior director of global payroll at Automatic Data Processing, Inc., said at the conference.
The shared-services model makes accessing relevant payroll data easier, which allows global payroll practitioners to work more effectively with each other and with other departments within their company, Myers said.
“Collaboration is key, and it starts with payroll recognizing it needs to be a better steward of the data,” Gerbin said.
Using third-party providers that may supplement shared-services operations can improve the effectiveness of consolidated operations, Myers said.
Companies that shift to global or regional shared-services payroll processing without incorporating their country-level payroll staff may lose access to some country-specific payroll expertise, but third-party providers can provide country-specific knowledge about compliance and best practices to supplement that of the shared-services staff, Myers said.
“As the world continues to become more complex, and you increase the number of countries where you are operating, complexity becomes more and more difficult to manage, so that’s another key driver when we think about shared-services centers on a global or regional basis,” Myers said.
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