The decision and reasons for global payroll outsourcing can often be grouped and summarised into –

–  Compliance

–  Cost effectiveness

–  Control

While compliance is usually at the top of the agenda, outsourcing often comes with the caveat – “…..as long as it saves us money….. or reduces administration and provides control.”

When the cost is the driver, organisations need to capture the total costs from the very beginning of the process.

Typically it is often difficult to extract all this information from an organisation, and, even then, it is not all-inclusive, but invariably based on a ‘cost of payslip’.

The aim of global payroll outsourcing – what are you trying to achieve?

The ‘true cost’ considers all related processes, systems, software, cost of cash, and those involved throughout the organisation in the non-core areas of business.

Costs are regularly over-simplified, but this also causes issues to arise.

There are situations whereby organisations have not been given a full understanding of the needs and have removed the payroll skills required, leading in real terms to far greater costs to the organisation as a whole than simply the ‘payslip price’.

Therefore, the connection between greater administrative control, reduction of administrative work, and improved cost-effectiveness should never be forgotten.

With this in mind, ROI should be strategically defined by specialists with an understanding of all the ramifications of the change, to make sure the desired aim is, in fact, being met.

The total cost to the company involves a number of areas:

–  The people involved

–  Processes, including Tax and Policies

–  Software used, and systems integration costs and training

–  Administrative time

–  Banking and cash flow

–  HR and Finance

Understanding what global payroll solution you require and what the aims are for outsourcing is critical. As with any potential change management process, there needs to be measurable objectives and milestones that support the aim.

But it is vital that they are based on a full and accurate picture of the situation, allowing the organisation to truly achieve the aims they set out for.

If you are currently considering outsourcing your global payroll and require advice and support contact us today on – enquiries@global-ems.com