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23 September 2022
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5 minutes

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

Colleagues working together in a busy casual office room

Payroll outsourcing provider management is a key issue for many companies. How should payroll professionals ensure they keep on top of outsourced payroll management and get the best out of their provider?

More than a third of payroll managers interviewed in TMF Group’s 2017 research with the Global Payroll Association (GPA) believed that vendor management is one of the most significant challenges they face – and it appears to be no less of a challenge now, as organisations continue with M&A activity and consolidation of business functions.

Among the key benefits that companies expect their vendors to provide are local knowledge and local language ability. But all too often, their outsourced HR and payroll supplier operates out of a global service centre. Such providers may offer a single contact person as an account manager, but that person is very unlikely to have easy access to on-the-ground local payroll expertise and local language skills in every country. They might interact regularly with third-party suppliers to answer queries, but if the message gets ‘lost in translation’, the true situation can often be misunderstood, causing frustration and errors.

TMF Group is one of only a very few payroll outsourcing providers that offer direct local expertise.

Let’s look at some of the key issues payroll managers face when running global payroll in partnership with a payroll outsourcing provider, and how they can be addressed.

Inaccessible contacts

One of the most common problems identified by payroll managers is their account manager within the payroll outsourcing provider not being as accessible as they should be. It can be time-consuming and frustrating to have to repeatedly phone or send emails that remain unanswered, in an effort to get hold of the right person to respond to a query or resolve an issue. Sometimes, there can be many layers of personnel or administration to navigate before a satisfactory response to a payroll query is received.

Another pain point is the difficulty faced when a client identifies a problem. Escalation procedures in the payroll outsourcing vendor 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 (SMEs) or account manager is a massive bonus.

Coordination issues

For companies 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 (KPIs). 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 is another issue frequently highlighted by the payroll managers.

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

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

A global provider can offer economies of scale, with reduced risk, maintaining client confidence in a smart-sourced solution and leaving them free to focus on achieving their own business goals.

Global visibility

A key challenge for payroll managers operating on a global scale is being able to drill down into the performance of the payroll function at a local level in real time. All too often, access to such information is hampered by incompatible payroll platforms and laborious manual reporting processes. 

TMF Group offers a specialist global payroll middleware 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 solution ensures a well-managed, consistent approach that not only reduces risk but also adds value with analytics 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, 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.

Learn more about the concerns of multi-country payroll managers 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. Contact us to find out how we can help you, or visit our Global Payroll and HR services webpage.

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