Article

Struggling to keep control over your payroll vendors? You’re not alone

15 March 2018

Vendor management is an issue that is soaring up the payroll agenda. It’s now the second-most pressing challenge for payroll professionals worldwide.

Service:

More than a third of those interviewed in our latest research with the Global Payroll Association (GPA) believe that vendor management is one of the most significant challenges they face – and it appears to be becoming more of a challenge for organisations as they continue international expansion.

“One of the key benefits that companies expect their vendors to provide is local knowledge and local language,” says TMF Group HR and Payroll Portfolio Director Darren Beal.  “But all too often, their external HR and payroll supplier operates out of a global service centre. Yes, they might offer one contact person as an account manager, but that person doesn’t necessarily have on-the-ground local payroll expertise and local language ability in all countries.  These people regularly interact with third party suppliers to answer queries, but if the message changes through misunderstanding, the true answer is often misunderstood, causing frustration for the customer.

“There is only a small sector of companies that offer direct local expertise, one of those being ourselves.”

Inaccessible contacts

One of the most common problems identified was account managers not being as accessible as they should be. It can be time-consuming trying to get hold of the right person to answer a query or resolve an issue and having to repeatedly phone or face unanswered emails.

Sometimes, there are many layers of personnel or administration to navigate before a satisfactory response to a payroll query is achieved.

Another pain point is the difficulty faced when a client identifies a problem. Escalation procedures in the vendor company can be slow and inefficient, and the issue may become a crisis before help can be engaged. “This is where direct access to the country Subject Matter Experts and Management is a massive bonus,” adds Darren.

Coordination issues

For clients operating in multiple countries, the challenges of vendor management can be risky and arduous. Sourcing a local vendor for each country makes sharing knowledge and coordinating tasks across geographies complex and time-consuming. Different suppliers will deliver different levels of service and output, with no common key performance indicators. This causes problems from a central reporting perspective, and means there is no single view of global payroll processing. A lack of coordination for deliverables negotiated in multiple contracts was another issue highlighted by the global payroll survey.

Sourcing individual contracts locally might provide a cheap solution in each country, but it means negotiating and managing different agreements and service levels. The administrative burden can be heavy, and companies may have to establish an in-house department purely to control numerous in-country suppliers, constantly checking that they are up-to-date with local legislation and regulations.

“This is where an experienced external provider such as TMF Group becomes a trusted partner,” explains Darren. “We can provide local knowledge with global reach, offering a consistent approach to global payroll across as many countries as our clients operate in. Pro-actively alerting clients to the regulatory needs of every jurisdiction that applies to their business, we help to ensure compliance across the enterprise.”

A global provider can offer economies of scale, with reduced risk, maintaining client confidence in their smart-sourced solution and leaving them free to focus on achieving their business goals.
“Many people fail to understand that there isn’t a global payroll system, but there are people such as TMF Group who will manage everything for them,” says Darren.

TMF Group offers a specialist global payroll software solution, TMF Horizon, with one secure, interactive portal to give a clear view of payroll data across multiple countries. Supported by local contacts with know-how, in-market language skills and expertise, the service ensures a well-managed, consistent approach that reduces risk and adds value with analytic capabilities to maximise the potential of a business’s payroll data.

“As companies expand geographically, they look for expert help in managing their global payroll. If working with an external provider is the best option, then it’s essential to engage a vendor that can deliver the service and standards required, without putting the company at risk through poor procedures, communication issues or inefficient processes,” adds Darren.

Learn more about the latest trends in multi-country payroll by downloading the report: Change is coming: the annual global payroll survey 2017.

Find out how our HR and payroll solutions can help drive efficiency in your organisation.

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