How to build a first-class global payroll team

Running a global payroll is incredibly complex and comes with numerous challenges. In order to overcome these challenges, multinational organizations need an international team of payroll professionals who are familiar with the unique complexities and requirements of multi-country payroll management.

However, building an efficient, well-structured global payroll team is a challenge on its own. Not only do organizations need to find qualified payroll professionals, but they also need to find a way to structure their payroll function to maximize efficiency and accuracy in their global payment processes.

Here is how to build a successful international payroll team.

The payroll function is responsible for processing payroll, administering payroll taxes, paying employee wages and salaries, and performing a range of different payroll management tasks. Running payroll on an enterprise level requires an extensive payroll team whose members hold different roles and responsibilities.

Here is an overview of the most common payroll professions and their respective tasks.

• Payroll technician/assistant: A payroll technician or assistant is charged with performing different routine tasks that don’t require in-depth payroll knowledge.

• Payroll practitioner: Payroll practitioners take over different payroll administration tasks related to employee timekeeping, payroll processing, and payroll record keeping. As they advance in seniority and experience, they take on more tasks that deviate from established procedures and come with a higher level of responsibility, such as preparing payroll reports, gathering payroll data for financial reporting, and more.

• Lead payroll administrator: A lead payroll administrator typically supervises several payroll practitioners and hence has the responsibility for general payroll processes.

• Payroll supervisor: The position of a payroll supervisor is similar to the role of a lead payroll administrator. The main difference is that payroll supervisors are typically needed in bigger payroll departments where they report to the next higher payroll position.

• Payroll analyst: Payroll analysts are responsible for ensuring payroll accuracy. They oversee the payroll reconciliation process and prepare the documents that are needed for accounting.

• Payroll manager/director: The role of a payroll manager (or director) is also associated with a payroll function that comprises several units. The payroll manager oversees the activities of several payroll units and typically takes over additional tasks, such as tax reporting or payroll system administration.

• Director of payroll: The director of payroll is typically the most senior person in the payroll department and hence has control over payroll processes, strategy, and governance. As the head of the payroll department, the director is responsible for all the company’s payroll-related goals and objectives.

Other common payroll professions are payroll specialist, payroll consultant, and payroll tax administrator. Depending on the organizational structure of the payroll function, there might be several other members of the payroll team who are charged with operating, maintaining, and coordinating the payroll system. These members can include a payroll system coordinator and a payroll system analyst.

When talking about multi-country payroll, there are additional roles that need to be filled in the payroll department. For instance, enterprises need a payroll supervisor for global payroll, a global payroll manager, and a director of global payroll.

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Having a clear organizational structure is very important for every company, but especially with regard to the payroll function. Payroll is critical to any organization, which is why things shouldn’t be left to chance.

The structure of the payroll function should be aligned with the organization’s global payroll strategy and the chosen global payroll model. There are two critical aspects to consider in this context:

• Centralized vs. decentralized payroll

• Outsourcing vs. in-house payroll

Centralized vs. decentralized payroll

The first decision businesses need to make when structuring their payroll function is to choose between a centralized or decentralized approach to managing payroll. In a decentralized payroll set-up, the business has separate payroll departments for each business unit or location.

In a centralized payroll management approach, there is one payroll function which is responsible for overseeing and managing policies, processes, and performance for the entire organization’s payroll operations.

Organizations with global payroll operations often opt for a hybrid approach. In a multi-country payroll set-up, payroll for different entities and locations are typically grouped in regional hubs.

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Outsourcing vs. in-house payroll

The second important decision to make with regard to the organizational structure of the payroll department is whether to keep payroll in-house or outsource some parts of payroll to an external payroll service provider.

Businesses can gain several advantages when outsourcing payroll to a third party. These advantages include time and cost savings, enhanced payroll compliance, reduced risk of payroll errors and increased operational efficiency in payroll.

Ideally, businesses should opt for an all-in-one global payroll solution like Lano. Lano combines the advantages of an automated global payroll consolidation platform with global payroll services.

A consolidated global payroll helps avoid the problems that typically arise with multi-vendor management and data collection for global payroll reporting and improves global payroll compliance.

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Sourcing the right candidates is yet another hurdle on the way to building a world-class global payroll team. Organizations should keep in mind that candidates will need a different attitude and additional skills to operate effectively in an international payroll environment.

Strong organizational skills are crucial for keeping track of legal changes affecting payroll and managing deadlines for payroll reporting, payroll tax filing, and more in different jurisdictions. Only candidates who can think on their feet and thrive in a fast-paced, challenging environment will be a good addition to the team.

Also, it’s important to hire a team of payroll professionals who offer a good mix of technical skills and soft skills and cover different key knowledge areas. Tasks should then be allocated to each team member’s strengths and experience.

There is more to building a leading global payroll team than just hiring some payroll experts with experience in running and managing a multi-country payroll. Here are a few additional aspects to keep in mind:

• Appoint a global process owner: Global payroll is incredibly complex and comprises many different systems, processes, and actors. There should be one member in your global payroll team who acts as an enterprise-wide process owner for your payroll.

• Think long term: A common mistake multinational organizations make when building a global payroll team is to just think about their immediate or mid-term staffing needs. It’s important to think long term. This includes creating detailed succession plans and developing a strategy to ensure appropriate knowledge transfer.

• Keep upskilling your team: Rather than contracting external services for payroll-related problems and challenges you frequently face, build the necessary skills within your global payroll team by creating a detailed Learning and Development strategy.

• Establish proper payroll governance: Payroll governance defines the rules, policies, and regulations for payroll management to apply and execute them. It therefore plays an important role when it comes to risk management and payroll compliance. Enterprises need a detailed payroll governance framework that provides clear guidelines on aspects like payroll audits, payroll reconciliation, and segregation of duties.

• Don’t forget about culture: Managing a multi-country payroll often involves working with payroll specialists that come from different cultural or ethnic backgrounds, speak different languages, and have different approaches to doing things. Cultural awareness is hence another key factor when building a global payroll team.

• Establish strong leadership: Your global payroll team will need a strong leader. A global payroll manager needs to have strong leadership skills and set an example for the rest of the team. Also, they should act as an advocate for the payroll department as a whole.

• Bring together talent and technology: There is no doubt that your global payroll team will need expert knowledge and a broad range of skills to navigate the challenges of managing an international payroll. In order to elevate the performance of your payroll, make sure your payroll team has access to the necessary tools. Payroll automation and a reliable payroll software are two important prerequisites for outstanding payroll performance.

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There is no one-size-fits-all solution when it comes to building a winning global payroll team. What the right approach looks like ultimately depends on the organization’s overall business goals. The structure and composition of the payroll function needs to be aligned with the chosen global payroll strategy and model.

A global payroll function can be centralized or decentralized or follow a hybrid approach where payroll for several geographies is managed via regional hubs. The chosen global payroll model has a direct impact on how the payroll team needs to be structured and how responsibilities need to be distributed among team members.

A key requirement for building a strong international payroll team is finding the right talent. Recruiting and hiring qualified payroll professionals takes time. Not only is it crucial to carefully assess the different team members based on their skills and experience, but businesses also need to ensure that they will make a well-working team in the end.