Masterclass Confronting the Challenges of Multi Country Payroll

Transcription

1 Masterclass Confronting the Challenges of Multi Country Payroll Payroll Services Alliance Carsten Staehr Cintra HR & Payroll Service Joeri Mariën SD Worx 1

2 Who are we? Carsten Staehr CEO of award winning Cintra HR & Payroll Service. Over 23 years experience in the fields of payroll and software development. Dedicated to nurturing emerging talent and developing innovative and productive business networks. Recognised in Payroll World s Top 50 Most Influential People in Joeri Mariën International Alliances Director of HR services provider SD Worx. In 2010, Joeri Mariën set up the Payroll Services Alliance, together with Aditro. Today the Payroll Services Alliance is the answer to the needs of Pan European companies who are looking for a genuine European payroll solution. 2

3 Payroll Services Alliance Established in countries 63,000 clients 5,7M payslips/m One contract, single point of contact European + local expertise Managed Payroll Services in 28 countries European reporting 300 years of experience in payroll services! 3

4 Payroll Services Alliance Aditro (Nordics): DK, EE, FI, NO, SE Espoo, Göteborg, Malmö, Oslo, Stockholm, Trondheim Cintra (UK): UK, ROI, Channel Islands Belfast, Dublin, Newcastle Elanor (CEE): BG, CZ, HU, PL, SK, SL, RO, RS, RU, UA Beograd, Bratislava, Budapest, Bucharest, Katovice, Ljubliana, Moscou, Orel, Prague, Vienna SD Worx (Western Europe): BE, DE, FR, LU, NL Antwerp, Berlin, Breda, Brussels, Frankfurt, Luxembourg, Paris Seresco (Southern Europe): ES, PT Asturias (Oviedo), Barcelona, Galicia (Vigo), Madrid Trianon: CH Lausanne (Renens), Zürich 4

5 Multicountry Outsourcing is increasing HR outsourcing: CAGR of 5,5% through 2017, same for payroll outsourcing (Gartner) Why? A lot of surveys, one that keeps coming back is cost control (SD Worx, Gartner, E&Y,...) due to the uncertain economic situation & competition Lower total cost of ownership (but is this a real driver?) Flexible adaptation of costs (M&A, restructuring, growth,...) Focus on core business (it s all about added value, professionalization) But certainly as important: Risk reduction: outsourcing as an insurance (get rid of liabilities) Legal complexity: legislation is a fast moving, difficult and expensive to manage Consistency and governance of the payroll/hr processes in different countries (e.g. analytics) (and what about the US: trend back to SaaS, away from services outsourcing...) 5

6 Multicountry Outsourcing... Many organisations have an international payroll model which has simply evolved without any co ordinated design. Historically, organisations have typically dealt with the payroll aspects of their global expansion on a country by country basis, resulting in: In effective internal reporting Governance issues Lack of standardisation Increased cost Lack of perceived alternatives in the market Many companies are now going to market for the second time and know what they don t want! 6

7 Multicountry Outsourcing: What s in it for you? (in theory...) Central contract negotiations & economy of scale Global governance (with global sla s, kpi s) Consistent processes in all countries Global reporting Single point of contact for delivery... 7

8 Multicountry Outsourcing: What s in it for you? (in theory...) Central contract negotiations & economy of scale Global governance (with global sla s, kpi s) Consistent processes in all countries Global reporting Single point of contact for delivery... 8

9 Do you know what this is? 9

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11 Vendors often produce a lot of fog... And try to sell as much as possible (because you need it of course...) 11

12 They also like state of the art solutions. Because they are very nice. And never an overshoot... (Or too complex.) 12

13 In short: we see a lot of prospects that feel like... 13

14 What should be the Central Questions? What do you as a client really need? What helps you forward? 14

15 Our Experience What to bear in mind for a successful Global Payroll Strategy 15

16 Myth 1 Does a Global Payroll Engine Exist? No! 16

17 Hence No Enterprise System such as Oracle, SAP exists in the Global Payroll world But Global reporting Global input screens What is your preferred process for Global Management Reporting Interface to Your Enterprise system Use the tools of Global Payroll providers 17

18 Myth 2 I will provide a full interface from my ES solution to the Payroll vendor 18

19 HR Department / Management / Employee Spain France Germany Telephone SLA SAP HCM System Client SAP Standard Client Spain 1 st Level Single Point of Contact (SPOC) Servicemanager SAP HR Maintenance Payroll Services 2 nd Level Client France Client Germany Client Payroll System Vendor 3 rd Level 19

20 Payroll Complexity Varies Rank Country 1 France 2 Italy 3 Germany 4 Holland 5 Belgium 6 India 7 United States 8 Luxembourg 9 Spain 10 New Zealand source: NorthGate Arinso,

21 Hence Great Difference in cost per country Cost per payslip Implementation cost What is included and not (Hidden cost)! Different price models Lead time varies Planning ahead essential More and more difficult to have speedy set up Solution sophistication varies A new trend of an all inclusive price per employee No hidden surprises or cost! 21

22 Issues faced by Global Payroll Departments Rank Problem Reply 1 Legislative compliance 23% 2 Organizational consistency in in payroll process 18% 2 Finding the right global payroll talent & resources 8% 3 Administration cost 5% 4 Management reporting 4% 5 Regional capability 4% 6 Organisational consistency in remuneration and benefits 3% 7 Manging Mobile Employees 0% 8 Audits, information requests and remediation 0% Other 35% Source : Ernst & Young April

23 If you were to select a new vendor for Global Payroll what would be your top three criteria? Rank Problem Reply 1 Cost 19% 2 Geographic/Global Capability 18% 2 Technology Platform 10% 3 Managing Mobile employees 8% 4 Accuracy of Payroll delivery 6% 5 Relationship Management Model 6% 6 Standardisation of service delivery model 4% 7 Ability to reduce compliance risk 3% 8Customer support avalibility 3% 9Cultural intelligence 1% 10 other 22% Source : Ernst & Young April

24 Conflict? Needs versus buying criteria Important to ensure you know what you want and what is driving your decision Is it a cost exercise versus better control and compliance? Does the technology platform matter? 24

25 Examples of where we see it go wrong The HQ of a European MNC decides to switch provider in all its subs. The subs however don t feel like changing. They see no added value, extra work coming up and their local relationships disappearing. 25

26 Examples of where we see it go wrong RFI / Tender Do you understand what you want and where you need to be What are the key drivers of change? What are the objectives of change? Do you have a clear view of your payroll costs and potential budget? What is the appetite for change internally? Have you identified any barriers? Does your organisation have a culture and history of outsourcing services? Do you have a clear view of what is available in the global payroll market and what service offering is right for you? Tendancy to over complicate RFI and concentrate on non essential requirement Use the global players/current providers to help before issuing a RFI. 26

27 Examples of where we see it go wrong We all use the same words, but they mean something else... Payroll, HR, managed services, BPO, outsourcing,... no common framework 27

28 Outsourcing Degree varies per region & country source: Nelson Hall, Targetting Payroll Outsourcing, 2013 source: SD Worx,

29 Some Advice Talk to your subs! (detect their needs and local situation, culture and legislation) Look into what you really need and what you re willing to pay for (before sending out RFI s) use providers expertise in this process (but don t let you talk into complexity) One size fits all? SOX? Integration of HRIS, Time & Attendance,...? Mobile applications? Paperless?...? Make sure you understand the different levels of outsourcing: commitments and liabilities (SaaS, bureau services, online, managed services, BPO, comprehensive services,...) 29

30 Looking to the Future... What is next? 30

31 What is next? We don t know! but Technology will have a greater impact More sophisticated analysis of Payroll data Hybrid solutions 31

32 Thank you! 32