With more than 25 years of experience developing global payroll, HCM, and even IT solutions for leading multinational organizations, Eric de Keizer exudes both confidence in his understanding of what’s possible for customers and appreciation for the ongoing evolution of what’s needed to maintain business advantage in today’s markets. As VP of Customer Experience at CloudPay, he’s leveraging that experience to ensure customers can realise the benefits of enterprise-level payroll services. Here, he sits down with me to discuss standardization, complexity, flexibility, and more in global payroll.
David Barak: You’ve dedicated the past two and a half decades to improving operations, solutions, and the user experience in global payroll and HR. How did you get into this industry?
Eric de Keizer: The question really is do you choose to work in a global payroll environment or do you, by accident or fortune, end up being part of it? In 1995 I was working at an IT company, responsible for the IT network and also implementing ISO9001. Through that process, I became more involved with the human resources and payroll divisions, and eventually I ended up running the HRM software development and, later, the HRM and payroll software development departments.
Working in a large, local payroll environment, I became aware of how payroll is at the core of any business but, at the same time, not the core business of any company. As a result, I became very interested in the outsourcing model for HRM and payroll. Years later I became part of the bid team for larger European deals and saw the potential for a more global approach to payroll.
DB: In your years of experience, what have you found to be the most persistent challenge of global payroll for in-house payroll teams?
EDK: It’s important to define the “in-house” versus “outsourced” payroll models. Typically, “in-house” is used to mean you’re doing the payroll yourself, versus having a specialized company do it for you. When you’re working on a local level, in-house could be the most effective choice. You work with a trusted local provider and have easy access and communication in the same language. You could even go as far as using the software of a provider while running payroll yourself. The biggest challenge here is to have and keep the right payroll lead in the company.
However, if you’re running payroll for many countries from one location, many potential challenges may arise, including different languages, different regulations, different filing requirements, and different cultures — not to mention the variety of complex HRM and payroll profiles you may need to support. I think for a local, in-house team to process payroll correctly without using a specialized company like CloudPay is almost impossible.
As soon as a company moves to process global payroll, they need to account for service alignment, meaning how they manage different services consistently across countries, and contract management, which deals with aligning contracts throughout countries. On top of that, the company needs to prepare for communication challenges between different locations and languages, have a plan for secure and effective data exchange, understand differing compliance requirements, and decide how to staff and manage an effective global payroll team.
There are plenty more factors to consider, and it’s easy to see how quickly the needs can escalate beyond the capabilities of even a very effective in-house payroll team. Almost without exception, I think if your company is growing and expanding its global profile, it is necessary to outsource global payroll to a specialized company, where it’s their entire focus, so that you can concentrate on your core business.
DB: You’ve led the implementation of payroll services for a wide range of companies, which must require plenty of flexibility, as each customer and global footprint faces different obstacles. How are you able to create process standardization across such varied environments?
EDK: Running global payroll implementation projects for multinationals requires standardization and flexibility at the same time. To facilitate consistent global payroll for any company, you need to have a well-defined process and clearly established service standards for both implementation and ongoing services. You need to provide the right tools for the client, so they can be effective in running the payroll on their side. It’s important to consider the client profile and provide advice on their payroll organization, process, and the tools they use.
No matter the customer’s size, locations, or chosen payroll system, the most important factors for me are having a standard implementation process that is consistent worldwide and activity driven, giving advice on change management that supports quick change, working with strong implementation teams with global expertise, using cloud-based software to support implementation activities, and enabling strong reporting and analytics capabilities to provide insights to clients.
Very large companies tend to involve greater complexity, which can mean they’re more difficult to fit into a predefined model or require more time to manage the change. In those cases, the outsourcing company can be more flexible as long as they maintain the target of process standardization as a broader goal. Regardless of the precise timelines, having good people management and strong, motivated teams involved and running the implementation will always make the difference.
DB: So you create standardization around the main process items and leave the rest to be flexible?
EDK: Yes. So the core process of what you’re trying to achieve and how that needs to look and function is consistent, but the means of getting there probably varies a bit from customer to customer, depending on their needs.
DB: So when it comes to customer experience and customer satisfaction, payroll delivery is notoriously difficult in that it requires 100% precision to be considered a success. Yet its variability makes it almost impossible to be 100% accurate all the time. How do you ensure a positive experience for global payroll customers in an environment that is, rightfully, intolerant of mistakes?
EDK: During welcome training for new employees, I would often ask, “How precise do you think payroll needs to be globally? Keeping in mind this is extremely complex, with thousands of employees in different countries, would 100% be the only acceptable outcome, or could 99% or 95% be okay if it’s corrected the very next month?”
Almost everyone would begin with 100%, but you’d be surprised how many would go even as low as 95% after some discussion. Then I would say, “Okay, so I will pay only 95% of your salary this month,” and everyone is back to 100%.
So the essential question in global payroll delivery is how to achieve 100% accuracy in a function that is required to provide for changes at the last-minute and with no warning. Someone is out sick, someone left the company, someone gets a bonus. The challenge is in accommodating change while maintaining accuracy.
In the ideal situation, you have a global service provider with top-level expertise around running payrolls in the required countries and a client with the same level of ability and expertise on their side, ready to prepare and sign off on the payrolls. Really that comes down to training — to making sure there is enough customer education, practice, and support ahead of going live with a new payroll solution. A global payroll project is a partnership, so strong collaboration between the customer and provider teams is critical.
DB: At what point should smaller companies that may not yet have sophistication around their global workforce look at an enterprise-level payroll solution like CloudPay? Would you advise them to wait and use local providers until they reach a certain size?
EDK: At this point in the development of technology and what’s possible in the industry, it makes sense for any size multinational to seriously consider outsourcing their payroll to a global provider. The benefits of using a single solution are wide-reaching and should be considered from an organization’s early days if their end goal is global. The intelligence that can be gained through proper analytics, the scalability you can have with an integrated global solution for payroll, HR, payments — they’re real advantages when it comes to expansion into even just a couple foreign markets.
The key is to understand what’s possible and what you need. There are a number of newer, technology-enabled global providers who cater to smaller companies, but when you dig deeper into the solution — which can be difficult to do because all the focus is on global, cloud, et cetera — you find that it’s just another aggregator, just packaged for the smaller, more modern multinational.
DB: So how can a smaller multinational decipher those differences and identify which options will meet their needs?
EDK: It’s a challenge for sure. It’s easy to be misguided in the RFP process, so it’s important to really know what you need and where you’re headed. Some things may seem obvious, like which countries you’re in or will expand into in the next five years, or the fact that you want online access to payroll data. But you have to consider what that means, because it will mean different things to different providers. Does that mean employees can get their payslips online? Does it mean you can update data directly and in real time?
Maybe analytics is important to you. Every provider will say they have analytics or another form of reporting, so you need to know what that means for you. There are SLAs, there are KPIs, there is predictive analytics, there are customizable reports and dashboards — what do you need? It’s essential to have that understanding going into the RFP process, so you know which items are must-haves and what specific information you’re asking of the provider.
For smaller organizations in particular, having global expertise is key when it comes to payroll, tax calculations, compliance, statutory filings, and the rest of the requirements they’ll face. Being able to deliver payslips within a specific country is important, but having the knowledge and experience of how to handle issues and changes is what makes the difference between a payroll provider and a payroll partner you can rely on. At CloudPay, we take a special approach to small business implementation and support for multinationals with entities as small as even one employee, which has brought down the cost while maintaining 100% quality of delivery. And our subject matter experts are there to make sure their payroll is compliant.
DB: What are some of the new developments, whether in technology or services, that you think have impacted the cost and quality of payroll delivery?
EDK: Several developments have really changed what’s possible with payroll delivery. Now provider and customer teams can communicate in real time, data management can be much more secure either through systems integrations or secure transfers, task management is more fluid and collaborative with shared project tools like CloudPay’s Calendar application. Also, customers can have greater visibility of rollout details though a global project plan that is available online and combines all the local implementation plans. In general, I think the availability of a truly centralized, fully cloud-based system makes all desired functionalities available anywhere, anytime. Another key change in payroll delivery is not just better input of payroll data, but better output and reporting. The importance of this is often overlooked. Having real-time data and analytics available for customers as they want them is a tremendous advantage for multinationals looking for greater control and access.
Robotic process automation (RPA) has had a significant impact on global payroll. These days you hear the words robotics and AI used quite a bit, and they get some people excited and make other people nervous. It’s important to understand what they mean for the payroll function. Robotics is really useful for standardized processes, to perform those standard, repetitive steps faster and with greater accuracy than otherwise possible. Robotic Data Validation is a perfect example of this. Larger enterprises could actually save days using RDV, but scale it down to the smaller business level, and the impact is no less dramatic. When you have a smaller internal team to handle payroll or HR, saving half a day that would otherwise be spent checking line after line of payroll data has a big impact.
DB: So if I’m the payroll leader for a company with 1,000 employees in my main location and then another 300 across five other countries, how do I approach paying my employees in those five countries?
EDK: Leading payroll for a smaller sized company like this, your best option is to outsource all payroll to a single vendor, so that all the same tools and processes apply. This way your data is standardized and any analysis will be enterprise-wide. You can consider everything to do with your payroll on one system.
Key to this is getting alignment at the top level. You need alignment of your pay codes, your dates, your data formats, et cetera. Some companies will do an alignment project first, then proceed with the payroll transformation, which is a good approach, although most companies don't do that. In preparation for implementation, you’ll need to evaluate your payrolls to ensure you have not only the right input for the new system but also the right output. You’ll also want to make sure the provider you’re working with has a good roadmap for the process, not just promises of what can be achieved, and always use common sense. For example, is full integration of an entity with five employees really a necessity for launch or is that effort better focused elsewhere?
DB: Eric, this has been a really insightful discussion. Just one last question: What is it about global payroll that keeps you motivated and excited about working in this space?
EDK: This is a simple answer: It’s the global dynamics of working in this space. People may say that payroll is boring, but I see, feel, and think the contrary. Connecting with countries all over the world on a day-to-day basis, being part of core processes for many big companies around the world, helping them find global solutions that work for them and support their business — it’s all incredibly exciting and rewarding for me.