How HCM integration with global payroll can boost ROI

September 19, 2019

Global payroll and HCM integration

For many multinational companies, the case for making an investment in a Human Capital Management (HCM) system likely centered on the business value of the solution.

But if your HCM implementation doesn’t include payroll from everywhere in the world you do business—and many HCM solutions don’t—it’s likely that your organization isn’t realizing the best return on its investment. Uniting your HCM system with a global payroll solution that supports operations from virtually all around the world opens up a world of strategic business advantages.

Global payroll and HCM integration

Let's look at five ways global payroll and HCM integration can help you see more value from your investment.

1. Reduce payroll processing costs

Because of the complexity of multinational payroll, you may be relying on a fragmented network of local or regional providers to process payroll, perhaps even manually. And when you have separate providers—each with its own systems, IT infrastructures and staff to process payroll and ensure compliance with all local wage, tax and employment laws—inconsistencies in data control and management begin to multiply.

Considering that organizations spend 32 hours per week on manual, duplicate data entry, addressing data inconsistencies becomes imperative. So when you centralize global payroll with a single provider and then integrate it into your Human Capital Management system, you not only consolidate costs for processing, you reduce them as well, because you remove redundancies associated with a distributed network. Furthermore, with payroll moving from manual systems to a centralized provider within your cloud-based HCM, you eliminate the need for IT support across the network.

2. Decrease global labor costs

In addition to reducing payroll processing costs, global payroll and HCM integration can also help the organization identify ways to lower global labor costs. A centralized global provider can standardize your payroll data, and when it’s merged with your HCM, you get a single, real-time data view.

This means that no matter the currency in which salaries are paid, the language that benefits are distributed, or the country where taxes are withheld, you can see your total labor costs around the world. And you can use the information to perform workforce spend analyses, potentially answering questions like: Could we shift some roles to lower-cost labor markets? Or, should we redirect hiring efforts from one department to another?

Companies that implement centralized global payroll see an average of 50% in labor cost savings through headcount reductions, which is driven by consolidation, process optimization and automation that allow payroll and HR resources to refocus on more value-added tasks.

3. Strengthen data compliance

If you have employees in the European Union, you know that GDPR includes provisions on employee data. Although payroll data security has always been critical, GDPR has introduced a new, tighter level of compliance to adhere to, so that companies with employees in the EU found to be improperly storing and processing employee data can face fines of up to 20 million euros or 4% of annual revenue, whichever is higher.

Moving from a distributed payroll network to a centralized payroll solution that’s integrated with your HCM gives you a single source of employee data to manage—which is crucial, because 47% of HR and payroll professionals say maintaining multiple, duplicate employee records leads to increased compliance risk.

A single source of data helps reduce potential GDPR violations related to data collection, categorization and retention. Additionally, now that all employee data lives in your cloud-based Human Capital Management system, the possibility of fraud or tampering that’s present in manual systems is eliminated.

4. Improve employee engagement

You’ve probably seen an increase in employee engagement since you’ve implemented your HCM. Moving your global payroll into your Human Capital Management system would help boost it further, because it gives your employees around the world one-stop, on-demand access to all the information that matters most to them, such as:

  • PTO accruals
  • Sick time
  • Payslips
  • Benefits
  • Tax deductions

By making it easier for employees around the world to have access to their important information whenever they need it, you help foster a greater experience and satisfaction with your company.

5. Elevate HR within the organization

This is perhaps the most important way global payroll and HCM integration can add value to the organization—and to HR specifically. With employee payroll and HR data consolidated into a single system, HR spends less time on repetitive data entry tasks and moves from being reactive order takers to proactive, instrumental contributors.

With a consolidated data view, HR can better evaluate gaps and redundancies, and make strategic workforce decisions on things like talent requirements and forecasting, onboarding tactics, and proactive employee recruiting and training.

And as HR spends less time on redundant administrative tasks and more on evaluating the processes that have an impact on the overall business direction and goals, you’ll see an improvement in HR staff morale. With better morale, attrition will decline and you’ll have an opportunity to foster a pipeline of career advancement: HR professionals who leverage advanced analytics are over six times more likely to have opportunities to climb the corporate ladder.

Want to learn more about how your multinational organization can boost the value of your HCM? Contact us today to schedule a free consultation with a global payroll expert who can help you further explore the benefits of global payroll integration.


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