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Case Study: Flexibility and standardisation key to KLM’s payroll requirements

About KLM

  • Headquarters: Amsterdam, The Netherlands
  • Founded: 1919
  • Employees: 28,500

The international airline KLM operates in the fiercely competitive airline industry. As a result it needs to operate as efficiently as possible. This means everything in the company needs to be optimised including its HR function.

One HR challenge for the airline is paying its 28,500 people. This is a complicated task due to the many rules around pay in the company. We have worked with KLM since 2000 and our longstanding relationship means we truly understand the needs of KLM’s payroll.

What was/were the main issue(s) with KLM’s payroll?

Payroll is a major challenge for KLM, due to the complex rules within the company. It pays 28,500 employees (ground and flight staff) through its Dutch payroll system.

However, many roles in KLM are protected by numerous unions. As a result regular consultations are required with each union to discuss the complex rules around pay scales.

These scales are across the whole organisation from top to bottom. Grades and pay scales differ by job type, location as well as various other parameters.

Furthermore, salaries and other rewards need frequent adjustment.  Bonuses or ad hoc agreements add further complexities to an already challenging payroll process.

According to Jan Kool, Payroll Manager at KLM. “Existing, standard payroll solutions are not able to cope with KLM’s highly complex and fast-changing payroll needs.”

How we helped KLM’s payroll?

In 2000, KLM selected SAP’s on-premise payroll to replace its existing payroll system. At the time, it offered the standardisation and flexibility needed by KLM.

We were brought in at the same time to manage the SAP payroll platform. This ensured all required changes were made and payroll was always compliant.

KLM’s employee payroll is run centrally from their Amsterdam offices and we provide a team of specialists dedicated to running their payroll.

In addition, we undertake impact analyses before KLM makes a decision on pay or benefits proposals to or from the unions.

This calculation reviews the potentials costs in a range of different circumstances. It means KLM can see the effect agreeing to new conditions would have before entering discussions with the unions.

We work with KLM to ensure the SAP HCM solution configuration can be rapidly adjusted following negotiations with the unions. This ensures the payroll processing system is efficient and compliant.

Integrating our consultants with the KLM team, maximises flexibility. KLM is freed up to focus on its core business instead of worrying about payroll.

And, because we bring in specialists as required, maximum continuity and flexibility is assured.  Both KLM and Alight teams use agile working to ensure that everyone is aligned with KLM’s expectations.

“Alight understands our complex issues perfectly. Its team has the skills and knowledge to offer constructive solutions to the problems we encounter, due to our complex pay environment. They made the challenges of frequently adjusting our payroll, incorporating exceptions and effecting new requirements seem effortless. We look forward to working with them for maybe another 20 years!”

Jan Kool, Payroll Manager

Results and the future

We will continue to support KLM’s payroll team as the company completes its digital transformation journey.

In 2018, KLM introduced SAP SuccessFactors, a new digital self-service HR model in the Cloud. This meant KLM staff can log in and amend their personal details where necessary. Together with innovative chatbot technology, this can greatly improve the employee experience.

KLM will continue to put its employees first to maintain its competitive advantage in the airline industry.

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