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Back to Basics #1 – Advice for Choosing Your Next Global Payroll Vendor

David Leboff
David Leboff
Jul 11, 2019 3 mins

Many years ago I had a plumbing dilemma.

My house is over 100 years old. It had a crazy plumbing system in the basement to pump water from my washing machine up and through some overhead pipes which eventually ran to the sewer connection.

I was constantly cleaning the pump to clear the lint and debris that would regularly clog things up. Water leaked everywhere.

I decided I needed a better solution and did some research. Although I am handy enough with the basics of indoor plumbing, I decided that this project exceeded my knowledge base and that special tools I did not own would be needed to complete it.

So here’s what I knew:

  • If I took this project on myself I might be successful, BUT the likelihood was high that I would fail somewhere along the way and the fix would ultimately cost me a lot more than if I had just hired a plumber from the start
  • Therefore, I needed to define the problem, search for a plumber with the capabilities and credentials to do the work successfully and expect to pay a fair fee for the work

After some personal referrals from friends and phone calls, I found the plumber who fit my criteria.

  • He demonstrated that he understood the problem I was trying to solve, and that he had the knowledge, experience and tools to fix the problem
  • He quoted a reasonable price for the services he presented to fix the problem in the way I described to him
  • He also suggested a much more efficient alternative. It would cost a bit more than I estimated but he convinced me it would be permanent and maintenance-free.

I followed his advice and almost 20 years later it is still working as well as it did the day he installed it.

You don’t need to know my plumbing stories to know how to run a payroll, but I hope that this presents a good way to approach choosing a global payroll partner so that you find one that fits with your organization’s profile and that has a good shot at solving its needs.

If you are reading this article you are likely involved in payroll delivery and may have a set of well-developed, related competencies.

But like my plumbing problem, my primary accountability was getting the laundry done for a family of 7. I needed help to get this done more efficiently.

The plumber brought years of training, experience and specialized tools that helped me fix a critical part of the process that was not in my wheelhouse and that drained (pun intended) my time before he performed his magic.

In relating this process to the world of global payroll, I would suggest that there may be similarities between choosing the right global payroll partner and sourcing my plumber of choice.

First, the global payroll professional has to be able to evaluate their own setup and determine if there is a likely advantage or risk to be mitigated by using a third party to help with some or all of the operation versus doing it all internally.

And once the organization has decided to integrate outsourcing in some fashion, it makes sense to evaluate vendors on

  1. Their fit to your specific needs, and
  2. Them having the service and technical profile you are seeking

Your organizational attributes may include;

  • The overall employee population
  • Countries you administer payroll in
  • The distribution of those employees across them
  • Payroll frequencies in each location.

They may include how mature the payroll infrastructure is in countries where you operate. Your HR and finance technologies are important components of global payroll processing. Your organization’s reporting requirements, turnaround times, funding strategies and more.

You might want your partner to produce operational control certifications (like ISO27001), describe their data management hygiene and prove compliance with data privacy regulations.

You may want the vendor to demonstrate that their technology can integrate with your infrastructure, that it is secure, data protection compliant, and that it can deliver the information and relevant analytics your organization requires.

You may want the vendor to show that they are fluent in payments to any country that you operate in and to expatriates in multi-currencies if your organization has them.

The more specific you can be about your organization’s and expected vendor attributes in the RFP, the more likely that you will find the partner that best meets those precise criteria.

In my example above I was not hiring a commercial plumber, or one that specialized in heater installations.

I did not primarily care about size, marketing or advertising. I simply chose the one that demonstrated the attributes, capabilities and valuable advice that I needed to solve my specific problem.

And I would suggest that as you go through an RFP process, even the most experienced payroll professional should encourage prospective vendors to suggest how they might tackle the project presented differently if they thought there was a better way.

If you want them to do it your way, I am sure that they will. But remember, if in addition to telling Leonardo Da Vinci you wanted him to paint the Mona Lisa, you told him precisely how you wanted it done, then you would have gotten a very different result!

Like my plumber who proposed an alternative solution, the chosen global payroll vendor should be respected for their expertise and be pushed to demonstrate it as you initiate the relationship.

So in closing, here are the steps to choosing the right global payroll partner

  • Define the problem
  • Determine if you need outside help to resolve
  • If yes, send out an RFP
    • Explain the need as specifically as possible
    • Describe your company attributes
    • Define those you want in the vendor partner
    • Choose the partner that fits you best
  • Encourage the partner to offer their guidance and advice before starting the implementation
  • Initiate a strong, respectful and mutually beneficial relationship from the beginning.