How to create an effective global payroll RFP

March 10, 2022

As a global employer, updating your payroll strategy and operations is often key to finding the right balance between local compliance and global standardization—two things that often feel like they can’t co-exist.  

By involving the right people and payroll vendors for your multinational business, you will be able to overhaul your payroll for the better.  

The first step in finding the right provider is putting together an effective request for proposals (RFP). An RFP provides you with an opportunity to define your needs and target aligned global payroll providers, narrowing the pool. 

Let’s take a look at what should be included in your global payroll RFP and tips for creating one. 

What is a global payroll RFP? 

A request for proposals (RFP) is a document that defines what you’re looking for in a global payroll solution, giving payroll vendors what they need to submit a proposal that fits your needs.   

A global payroll RFP contains: 

  • Project overview 

  • Project goal 

  • Project scope 

  • Company background 

  • Timeline 

  • Vendor requirements 

  • Budget information 

  • Needs analysis  

  • Questions for potential vendors 

While the list isn’t exhaustive, an RFP should at least contain the above items in order to give providers as much information as possible about what you are looking for. 

Set clear global payroll goals first 

Don’t rush right into creating your RFP. Before you can create an effective RFP, you need to clearly understand what you’re looking to accomplish.  

For global payroll, you should look at metrics that indicate effectiveness, compliance, technology integration, data security, scalability and growth. Identifying your payroll pain points can also help you identify areas you’d like to improve. 

Here are a few examples to get you started: 

  • Achieve a payroll error rate of less than 2%. 

  • Automate timekeeping records across the company, reducing manual labor costs by up to 20%. 

  • Integrate payroll and human resources data into a single enterprise application for real-time data reporting, better retention and more successful initiatives. 

  • Reduce non-compliance expenditures by 25%. 

Outline your gaps, identify your needs 

Once you have clear goals, your next step is to determine what capabilities you need to achieve them. 

Companies tend to start their payroll vendor search by looking at what’s available instead of what they need. This approach fails for two reasons: 

  1. You come to the table prepared to compromise. 

  1. It’s easy to get distracted by new and shiny features. 

Instead, begin by gathering data and objectively assessing what is working about your current global payroll model and what’s not. Be realistic about your resources and capacity, then measure each activity against your goals to find opportunities for improvement.  

These opportunities become the services that the right payroll vendor can provide. You’ll need to detail them in your global RFP. 

Put together your global RFP 

Now, it’s time for the rubber to meet the road.  

You’ve got goals for your global payroll operations, and you’ve figured out what you need from a vendor to achieve them. The next step is to use all of this information to draft your RFP and begin the RFP process. 

Project overview 

The first component of an effective global payroll RFP is a clear and concise overview of what’s in your RFP. It’s essentially the elevator pitch for the entire proposal and lets vendors quickly qualify or disqualify themselves.  

The purpose of this section is to align with the right providers, taking the next steps only with those who might be a good fit. Try to be specific about what countries you need coverage in and whether you’re looking for centralized or decentralized payroll support. More than half (52%) of companies use a centralized approach. 

Tips for writing the project overview: 

  • Keep it short, stick to about 50 to 75 words or three to five sentences. 

  • Spell out your main goal (I.e., exactly what you are looking to accomplish). 

  • Make sure this statement can stand alone and does not require context from other sections of the RFP. 

Project details 

Next, go a little deeper.  

List out your specific goals, aiming for three to five specific and actionable goals. Clearly spell out the scope of the services you are looking for in a few paragraphs, using bulleted lists and subheadings to keep it readable.  

Then, provide some context with a brief and relevant company background. This should include the size of your company, recent growth and plans for future growth, industry, services and specializations. 

The logistics 

In this section of your proposal document, provide an overview of your anticipated timeline. Is this something that you need to get up and running as soon as possible or are you working with a one or two-year plan? There are vendors that can scale to fit either situation, but it is important to communicate your needs upfront.  

Provide detailed budget information regarding how much you’re looking to spend and lay out any specific vendor requirements that are non-negotiable for you. If you have invested a lot of money into your current IT infrastructure, you may require a vendor that can provide integrations to match what you’re already using. Or it may be that you’d prefer a vendor that provides local assistance for your employees in each country that you operate in. 

Vendor questions 

Detailing your needs is about half of the RFP document.  

The other half is a series of questions designed to pull the right information out of the vendor so that you can assess whether or not they will be a good fit. Just like a job interview, these are open-ended questions that provide clues about values, priorities and behavior that are often hidden behind clever marketing language. 

We cannot stress enough how important it is to ask the right questions!  

Compile a formal list of eight to 12 vendor questions that get at the heart of what it means to be your perfect partner. Consider asking about each vendor’s: 

  • Business model 

  • Service model 

  • Willingness to customize solutions to your needs 

  • Values 

  • Technology and integrations 

For more details on formulating vendor questions, download our checklist: 

Package and send 

Don’t forget to package your RFP in a formatted, branded document for distribution. Send out your request for proposals to your shortlist of vendors that you’ve already qualified as potential partners (at least three)—and see what you get back. 

The bottom line on creating a global payroll RFP 

It’s certainly a lot but remember that the RFP is your chance to make sure you’re getting exactly the right payroll service for your needs. Invest the time and effort to create an effective global payroll RFP now, and you’ll be more likely to end up with a highly successful payroll strategy and operation later. 

Learn more about Global Managed Payroll and how a centralized vendor can benefit your multinational business. Or please contact us with any questions you may have. 

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