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David Bernard | Senior Business Development Manager, CloudPay
Efficient and reliable payroll functions are vital to the success (and compliance) of any business. Achieving that, however, is often easier said than done, and understanding the problems that need to be resolved can often be just as difficult.
This blog will explore how efficient payroll can be held back, how detailed data can help pinpoint exactly where the problems lie, and the actions you can take to develop smooth, reliable global payroll operations.
The problem: what’s making your global payroll inefficient?
Payroll teams use a variety of processes and systems to get their work done day to day. This isn’t a problem in itself, but for global organizations, where different countries sometimes use entirely different systems, data, and processes, it can become a major issue.
This is because it becomes nearly impossible to get an accurate, business-wide view of performance through reporting, meaning that opportunities to improve efficiency and overall processes can’t be identified. Additionally, without standardized systems, data, and processes across all regions, opportunities to deploy automation can't be fully taken advantage of.
All of this results in a more manual, less efficient payroll process - which can leave staff feeling increasingly frustrated and cause knock-on effects on payroll costs as well as performance.
The solution: standardize, integrate, automate
To resolve these problems, and begin to improve the efficiency of global payroll operations, payroll teams should first follow this three-step process:
- Standardize: data should be standardized across payroll, HR, and finance, so that similarly standardized processes can be implemented, along with the same workflows, payroll systems, and data management protocols business-wide
- Integrate: bringing global payroll, HR, finance and other business functions together means that an entire organization can rely on a single source of truth, and remove the risks of disrupting that consistent data, such as email attachments, manual entry, and file uploads
- Automate: labor-intensive and repetitive processes can be automated and simplified once data has been standardized and integrated. This makes it far easier to manage large volumes of data and avoids the frustration staff feel with heavily manual and error-prone processes
The importance of global payroll KPIs
Implementing these steps should enable organizations to delve much deeper into their payroll data - going beyond standard SLAs such as accuracy and timeliness to garner real insights that help improve the performance of payroll.
Without standardized data, processes, and systems, payroll reporting is typically limited to these standard SLAs that only give a broad overview of performance. The problem here is that these service level agreements aren’t anywhere near detailed enough to provide the insight needed to flag up specific issues in real-time. Standard SLAs may give a view of how well global payroll is operating, but they do not identify why or where the process is falling down. And therefore offer no insight into how the process can be improved.
This is an issue that we’ve explored in detail in our recent Global Payroll Efficiency Index report. Within it, we looked beyond the normal KPIs to explore five more granular indicators, which have helped uncover global and regional trends: first-time approvals; data input issues; issues per 1000 payslips; calendar length; and supplemental impact. Applied at an individual business level, these five detailed KPIs can highlight problems that may occur at any stage of the payroll cycle.
Conclusion: trust the data and act on it
Achieving all this does require a certain level of trust to be placed in the data, and for decisions and actions to be taken on the strength of that data. This trust needs to be built within customers, vendors, and the cross-functional teams within each party in order for the move to be fully successful.
As an example of how this might work, a payroll operational team can hold service reviews on a monthly basis to examine these key metrics, actively looking for issues and coming up with aligned solutions for improvement. By holding these reviews on a regular basis, process improvements can be approached on a continuous basis, and ongoing trends can be backed using specific benchmarks.
Take a more detailed look at important payroll KPIs, and understand how they can identify issues in your operations, with the new edition of the CloudPay Global Payroll Efficiency Index. Download your copy of the report today.
