Global Payroll

Tails wagging dogs: six questions on manual global payroll with Ian Giles 

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A few decades ago, manual global payroll meant getting lost in half a million keystrokes every month. For a payroll practitioner (or team) focused on distributing 500 paychecks to pay their employees, that meant a good eight hours spent on input alone, and that’s before double-checking the output, getting it peer reviewed, making payments, printing payslips and managing queries. Each pay period.

Unfortunately, among a lot of payroll teams, not much has changed since then, says payroll veteran Ian Giles, a global payroll leader and advisor with over twenty years’ experience in the industry, despite all the technology that exists to actually solve these problems.

One glaring reason for this is the ‘if it ain’t broke’ mentality that permeates the payroll industry. People simply don’t understand what the big deal with manual global payroll is and how it can be a problem.

In this Q&A, Ian gives his two cents on the manual global payroll debacle, including the biggest consequences, and why companies need to rethink their payroll process.

Starting with a big question here: what would you say is the top consequence of relying on manual global payroll?

One of the biggest obstacles you’re ever going to encounter when doing manual payroll is the element of human error. If you’re not paying attention to what it is you’re doing on two spreadsheets or two screens, the data can go absolutely all over the place. You can be inputting information in one line that really belongs three lines down, for example. And if you’re then keying in the wrong employee number, somebody’s always going to end up getting paid incorrectly, leaving all your employee data susceptible to an erroneous domino effect.

And you can be making these mistakes quite happily for hours and hours without even realizing it. When you finally do spot the problems, you must then decide whether to go back to correct the data (which takes hours) or start from scratch (which also takes hours). Both decisions leave you scrambling for time.

All this to say that what could have been two hours’ worth of work becomes eight hours’ worth of work, and if you don’t pick up on it, you could be paying not only one person incorrectly, but hundreds – your whole entire global workforce.

Do you have any thoughts on manual global payroll’s security risks?

Unless you are using a state-of-the-art system, there is always going to be that element of payroll risk management.

This is particularly true when you’re moving information around in the form of e-mail, where there’s every possibility that somebody will forget to password-protect a document, or that the password chosen isn’t at the level of security that you might like.

Just to give a personal view on that, I think if today I received an emailed document from a particular businesses that I’ve worked with, depending on who is still within that company and that payroll function in question, I might very well be able to figure out what their document password was—even if I hadn’t been there for a decade. That’s because payroll passwords generally tend to include very commonplace information, like the name of the payroll and date, for example.

Then there’s the matter of where these unprotected emails and spreadsheets can end up if you’re not careful. You can end up sending your German payroll to your Australian payroll provider or your US payroll to your Indian payroll provider without even realizing it.

There is huge risk in letting your employees personal information float around. I’ve seen spreadsheets with photographs of passports embedded into them. There’s all kinds of information being sent around in all kinds of manners.

You touched upon a lack of communication between different countries’ payroll providers. Can you elaborate on that?

I’ve worked with businesses who partner with payroll providers in different countries. I’ve worked with one client, for example, who has payrolls in 20 different locations across the globe. They operate in the US on an in-house platform, so there is no need to be sending information to and fro within the US. But in the other countries that they work in, they have a very hybrid solution in terms of what those payrolls look like.

For instance, every payroll provider will require information to be delivered in different formats. Provider A, for example, might have a 27-column spreadsheet that you need to populate, while Provider B may require you to upload all the information into a portal in a separate format.

Another example has to do with holiday pay differences. In the UK, let’s say, employees are required to receive four weeks of annual leave as well as eight days’ worth of public holidays. In Spain, meanwhile, they’ve got 12 or 14 different public holidays, plus 20 or 25 days of holiday time.

But when you actually start incorporating all these different requirements, there is every possibility of making a mistake if you’re relying on manual global payroll. For example, there’s nothing to stop you from going into a Portuguese payroll provider’s portal, clicking on the upload button, and accidentally attaching the payroll for Taiwan, or miscalculating holiday requirements for different countries.

So would you say that with manual global payroll, it gets much harder to manage all these differences?

It does. I’ve owned the BAU process, implementation, standardization, target, and operating models in in well over 100 countries.

I am not an expert in every single one of those countries and I don’t believe anybody on the planet is. You just cannot retain all of that information. If it never changed, you might be able to get pretty good at it, but the fact that legislation regulations are revised whenever a country feels like it means you’ve got to constantly ensure all the information is up to date.

And how does this tendency for constant change apply to compliance issues?

Generally speaking, you have a specific amount of time to report that there’s been a data breach, and, depending on the severity of it, your data protection officer will need to take a number of different actions to respond to these incidents. This includes relaying to your client that you’ve sent their information somewhere it shouldn’t have gone. You’ll also need to confirm with your providers that they’ve deleted the necessary information. All these things end up eating into your payroll cycle, leading to more errors and less time to focus on your real payroll.

So, what would you define as ‘real payroll’?

Simply the things you need to do on a normal cycle—without any errors clouding your to-do list.

When it comes to manual global payroll, there’s often a case of the tail wagging the dog. So rather than knowing what you’ve got to do and owning it, you are being managed by exceptions rather than managing exceptions.

If you don’t have to go off on a tangent to handle breaches and errors, you should be able to easily follow your payroll calendar—and thus apply your efforts to more thoughtful, innovative tasks regarding employee compensation. Reach out to schedule a consultation