Global Payroll Maturity Assessment

Multinational organizations with IMMATURE payroll models operate with a siloed focus on executing the payroll process. Unlike companies with more mature payroll models, these organizations operate in a tactical manner with little or no visibility into payroll operations. Teams and processes are typically focused exclusively on performing current tasks, rather than on any forward-looking opportunities or preventive measures.

The processes of IMMATURE payroll departments tend to be high-touch and heavily manual. Error rates are high due to minimal organizational adoption of ‘best practices’ such as self-service transactions, data validation, and process monitoring or auditing. Payroll cycles lack harmonization and cycle times for processing are often five days or more. Payroll compliance related updates are regularly delayed due to...

Multinational organizations with REACTIVE payroll models are generally focused on maintaining payroll expertise, compliance, and overall administration. Unlike companies with less mature payroll models, however, REACTIVE payroll departments apply some of their resources into addressing issues, mitigating risks, and preventing major failures. Unlike those with more mature models, however, proactive activities may only be in place across a limited selection of countries or business units.

The processes of REACTIVE payroll functions are medium- to low-touch and involve a moderate level of manual effort. Error rates are moderate, as is the organization’s adoption of ‘best practices’ such as self-service transactions, data validation, and process monitoring or auditing. Some payroll cycles are harmonized (globally or regionally) and cycle times for processing are generally around four days. Payroll compliance related updates are monitored by REACTIVE payroll departments and applied to systems when time permits, though delays are frequent due to...

Multinational organizations with CONTROLLED payroll models are focused on improving payroll execution, boosting technical expertise, and achieving administrative excellence. Unlike companies with less mature payroll models, CONTROLLED payroll organizations are fully proactive in addressing issues, minimizing risks, and preventing major failures across most countries and business units. Employee satisfaction and organizational trust with payroll tends to be high and the average cost per employee paid is low.

CONTROLLED payroll functions keep the number technological systems involved in global payroll to a minimum, with sophisticated technology solutions in place among their centralized payroll locations. Error rates within CONTROLLED payroll models are generally low due to organizations’ embrace of low-touch processes and workflow automation. ‘Best practices’ such as self-service transactions, data validation, and process monitoring or auditing are in place among centralized regions or shared service centers, but adoption is low among locations that operate independently. Most payroll cycles are harmonized and cycle times for processing are generally around three days...

Multinational organizations with STRATEGIC payroll models operate with a focus on delivering value to the business and its global HR function. Unlike companies with less mature payroll models – which must maintain an exclusive focus on the execution of payroll tasks and processes – STRATEGIC payroll departments use value added activities, analytics, and reporting to support broader business objectives.

STRATEGIC payroll functions are also highly proactive in preventing issues and failures. Employee satisfaction and organizational trust with payroll is very high in STRATEGIC payroll departments, and the function tends to be well respected and highly regarded by senior management. The average cost per employee paid is generally low and very competitive when compared to third party providers and industry benchmarks. STRATEGIC payroll functions are centralized globally – either through a comprehensive shared services model, or through a strategic mix of shared service centers and outsourcing providers. A single global platform for HR, payroll, and Time & Attendance (or selection of well-integrated administrative systems) is in place globally, allowing for full...