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How do you integrate payroll when moving to the cloud?


This is an often-asked question. Whilst it’s an easy one to answer, it’s not so easy to do. Why? Because payroll is complex, and it is getting more so especially when HR is moving to the cloud.

This article outlines four steps businesses should take to solve payroll challenges as well as being able to:

  • Deliver compliant, accurate and reliable payroll services
  • Rapidly scale up or down when required
  • Solve payroll integration challenges when moving HR to the cloud
  • Gain insights into employee costs to optimize ROI

Managing the complexity of local payroll and standardizing payroll processes for a global workforce isn’t easy.

Consequently, when your organization is moving to the cloud, integrating and running payroll solutions is always going to be a challenge. This is especially the case if you want to deliver a seamless employee experience.

Moving HR to the cloud can be very straightforward, so why is the payroll element always so challenging?

HR is ideal for the cloud

The cloud computing model is ideal for delivering HR services. So much so, it has revolutionized the HR software landscape beyond almost all recognition. With HR, the processes and services needed lend themselves well to being delivered ‘as-a-service’.

Why is integrating payroll so challenging?

Even with the most sophisticated IT infrastructure in place, payroll is complex. The more countries a business operates in, the more complex it becomes. It’s not unusual for businesses today to operate in multiple countries.

Some companies have employees in almost every country in the world and they’re likely to have as many payroll systems, as they have country locations. If this were not enough of a challenge, there is rarely a standard workforce structure.

Payroll is even challenging for software providers

Where we might say that the cloud is ‘made’ for the delivery of HR processes, it’s not necessarily the case for multi-country payroll. Yes, there are many cloud software providers developing single country payroll engines. However, this can take years to get right.

Again, why?

Payroll legislation and collective agreements never stand still. There are always changes being made in one country or another. While there are rules for changes in some countries, in others, there is no set pattern.

This is no easy task to manage. There is no sensible way to manage this without local knowledge in each domain. It’s for this reason that so many businesses continue to use their existing payroll engines.

Already proven to work, when it comes to payroll, ensuring it works is the number one priority. If you don’t pay your employees on time, the consequences for your business can be dire.

Build your payroll case

Do you know which payroll service delivery model best suits your organization? Before you do anything, it is vital you understand this.

There are many tools that can help you understand the challenges your face and outline solutions to many of these, for example:

  • How complex is payroll in the countries you operate in?
  • How mature is your payroll landscape?

Although starting with a standard approach is recommended, sometimes this does not meet a company’s needs. In these circumstances, a unique payroll service delivery model is required.

Payroll must accommodate change

  • A business fit for the future needs a payroll infrastructure capable of supporting an increasingly disparate workforce. One that can for instance factor new office locations as the business grows.
  • Management teams also need a payroll infrastructure that provides visibility into the efficiency of the business. This means unifying data and the only way to do this is by moving to the cloud.

Resource heavy

Moving to the cloud is not easy from a technical or legislative point of view. Specialist skills are required for both. These skills are needed in every country where payroll is being delivered. Even where there are only a handful of employees.

Everyone from the consultants who plan and implement the payroll solution right through to the local knowledge needed to ensure the payroll is set-up correctly. Moving forward, people are needed to guarantee the technology is maintained and that all local legislative changes are made.

Not only does this require a huge resource investment from the customer side, the people with the greatest knowledge may be distracted from their vital role of delivering the regular payroll process.

This is a huge and costly requirement for any organization, especially where there are limited HR internal resources.

It is why so many organizations are looking to partners to move their multi-country payroll processes to the cloud.

4 Essential steps to successful payroll integration

Integration with HR is essential

Before anything else, review the integration possibilities available. The right HRIS will be able to connect to your payroll engines. Not every HRIS will allow this.

Secondly, design and build a solid framework. The right architecture is key to payroll integration success.

Build in time during the country roll out phase to ensure data fields are correctly stored.

Pre-configure for rapid success

A pre-configured set of best practices, such as FastTrack, saves time and cost. The deployment model can be selected depending on specific HR requirements.

This is not solely templates here. Ask your software provider how pre-configuration is done as well as how generic and legal patches should be applied at a global and local level.

This is particularly relevant if you share an environment with other customers, but still applies if you have a dedicated environment.

If you’re happy to accept small changes in the naming of wage types, paycheck design as well as harmonizing some of your local agreements, deploying a pre-configured solution will be even faster.

Flexible and future proofed

When sourcing a payroll solution, don’t just look at the cloud solution. Look at what more the partner can offer you.

Will you want to outsource your payroll as your business grows, or payroll gets more complex?

Would a partner that can run your payroll process in the cloud for you and deliver to HR processes to your employees as a service (a so called BPaaS, Business Process as a Service) be the right choice?

It is very important to ask these questions; Is your payroll software provider able to grow and develop with you? Is outsourcing your payroll the best option?

Think global

Don’t let your payroll partner limit your success. Choose one that can support payroll in all the countries you do, and might potentially, have workforce.

Look for a solution that can run payroll in all the countries you operate. A global payroll solution will offer you global reporting and reconciliation possibilities, all accessible via the cloud.

It will also give you a single service delivery model, without losing the local variations you might need per country.

Companies that connect their cloud HR solutions to a solid payroll engine, will however be successful with payroll in the cloud!

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