Editor’s Note: Michelle Vass, CPP, PHR, MBA, is Managing Director for Sikich LLP.
She has more than 35 years of progressive experience in many core areas of financial and human resources (HR) operations. Her areas of expertise span a broad range of shared services operations, which include strategic HR planning, financial operations-payroll, accounts payable, accounts receivable, mergers and acquisitions, project management, and technology. Vass has worked for many industry-leading global companies in the fields of consulting, accounting, education, technology, engineering, defense, energy, media, manufacturing, retail, and medical. She has successfully managed numerous large and technically complex shared services projects that have encompassed systems and teams in both a domestic and global environment.
What is the changing role of the payroll professional in regard to greater interaction with HR, data analysis, and managerial and strategic planning?
Often, payroll activities and HR issues are interrelated. It is significantly important that these teams maintain open communication and align their efforts. Since both groups are privy to confidential information, it is essential that they work together to ensure data is protected.
The payroll process used to be manual and very singular in focus. With the evolution of payroll tools, data can be dissected and analyzed for purposes beyond just meeting the current pay cycle.
Years ago, it was common for the payroll department of a company to be made up of one person. In recent years, we have seen a pivotal shift for the payroll professional becoming responsible for more than just the “payroll process.” Increasingly, payroll professionals manage teams, which includes performance appraisals, boosting team morale, conducting meetings, and so forth.
The payroll professional’s function used to be very transactional, in the weeds, primarily focused on the day-to-day operations. Today, the payroll professional needs to be more strategic and involved in planning. They need to be able to be proactive and plan for the future.
What emerging trends in global payroll are demanding your attention? How will they exert impact?
Two important trends are ever-increasing compliance requirements—some countries more so than others —and the growing regulations around data privacy. Payroll professionals must have a system in place to become aware of regulatory changes as timely as possible to help mitigate a company’s exposure to negative regulatory incidences. Payroll should work together with its company’s IT department to ensure that employee and payroll data is duly protected.
What are the chronic challenges for companies that have moved or are moving into global expansion?
These include understanding compliance complexities in a new culture, reporting gaps, integration challenges, and vendor management. It is critical that a company initiating global expansion dedicate sufficient resources to overcome these challenges.
What resources do you use to stay current on the latest trends and legislation in payroll?
The American Payroll Association (APA), Global Payroll Management Institute (GPMI), SHRM (Society for Human Resource Management), and Bloomberg BNA.
How can a payroll department provide support on a strategic level to corporate finance, HR, and other departments?
One of the most impactful areas is during a merger or acquisition (M&A). It is critical that payroll is brought in early during these discussions as there are numerous challenges a company will face. Payroll systems and processes need to be integrated and compliance and tax liabilities need to be managed, while still ensuring the workforce is paid accurately and timely. Having a solid M&A playbook is essential for overall success.
What are the biggest challenges for payroll teams and what is emerging to address these challenges?
Technology can pose a challenge to payroll teams, especially if the team members don’t have a solid understanding of the system they are using or are upgrading to a new system. Companies need to invest in both technology and their most valuable asset—human capital. The skill sets of the payroll practitioner has been slower to change than the dynamic changes happening on a global level.
What strategic advice would you give to a company moving from a domestic to a global payroll?
Appoint someone to become the team’s expert on compliance for each country where the company plans operations. Of course, a bilingual employee is preferred, but not at the expense of expertise. A relationship should be established with the various regulatory agencies that oversee issues related to payroll and employment as well as become involved in local resources related to payroll. Bridging local employees onto the payroll team will help alleviate cultural and language differences and aid in the acceptance of a foreign entity. For overall management of the operation, it is best to have only one system of record for human capital management (HCM) across all countries. Ensure that vendors can meet your needs in the countries in which you will operate and require solid service level agreements (SLAs).
What is the difference in responding to urgencies in global payroll versus U.S. domestic payroll?
Global payroll faces many challenges that U.S. domestic payroll is not subject to. These requirements mandate special attention in the areas of: potential money movement delays, multiple currencies and time zones, differing holiday calendars per country, language and communication gaps, and country-specific challenges. U.S. domestic payroll has one currency, fewer time zones, far fewer communication problems, and clear regulatory structures.
What have been your experiences in successfully navigating cultural and other differences on a worldwide stage?
My experience has been that to be successful you must build solid relationships with people from different cultures. Trusting and understanding relationships are the keystone that holds effective teams together as they work on a common objective. I have managed many large teams in remote countries as well as in Russia, India, and China. Some of the challenges that I have faced with managing remote teams are time zone differences, language barriers, cultural differences, and technology challenges. To help bridge these gaps, global travel to visit these teams is a must to help build synergy and trust.
What is the consequence and value of effective communications in global payroll—internal and external?
Effective communication is both what the sender sends and what is perceived by the receiver. In a global setting, there is more opportunity for miscommunication when language barriers and differences in cultural norms exist between people from different parts of the world. The sender must take additional care to ensure the correct message is being conveyed, and the receiver must understand that what they initially perceive may not have been the intended message. Just a little extra care is needed until members of different cultures get used to each other.
What would you like to see payroll vendors address in the next three years?
First, let me address my wish list related to payroll vendors. Global payroll vendors need to have stronger SLAs with their in-country partners and hold them accountable to a higher standard if SLAs aren't met. I would like to see more flexibility with money movement options for global payroll and development of better training for new and existing customers.
What are the values and limits to emerging technology, robotics, and artificial intelligence (AI) in managing a global payroll?
One area where robotics and AI could be beneficial is processing various transactions that are administratively burdensome to payroll teams as well as manipulating large sets of data. With the elimination of manual processes, robotics/AI can help payroll teams reach higher levels of accuracy more consistently.
What are the internal synergies you think may be strengthened in companies with a global workforce?
To succeed in global payroll, focus on building teams that offer the best functional expertise from around the world, combined with deep, local knowledge of the countries in which the company operates. This can be accomplished by drawing on the benefits of international diversity and bringing together people from many cultures with varied work experiences.
What are some essential practices and strategic choices to manage risk and compliance?
Implement a system to stay current on changing regulations and tax laws. If a company doesn’t have the expertise in-house, then partner with a reputable accounting or consulting firm to help provide guidance. The key is to mitigate your overall risk.
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