Change Management in Payroll: 10 Keys to Success

Transformative change is key to growth for today’s multinational companies. Business success now demands constant adaptation: If a global company isn’t continually evolving, improving, and responding to challenges across the entire enterprise, it risks stagnation (or worse, irrelevance).

But change is rarely easy for multinational organizations – especially when it comes to Payroll.

Even as costs and payroll errors grow exceedingly high, enterprise stakeholders may stay married to a disjointed, “decentralized” approach to global payroll for years on end. That’s why, once an organization has decided to make a permanent solutions change in payroll, congratulations are in order: Choosing to embrace transformation (and conquer their fear of change) is half the battle.

The other half is about ensuring that the switch moves as smoothly and effectively as possible, with a smart ‘change management’ strategy behind it.

CHAMPIONING THE POWER OF PAYROLL TRANSFORMATION

Whereas transformation is focused on driving substantive change in a fundamental area of the business – such as Payroll – change management is about facilitating the organization’s journey to a transformed “future state” in a defined aspect of its operations.

In global payroll, the right “future state” is a scalable foundation for growth and expansion. A holistic global, approach to payroll can help organizations reduce operating costs, increase productivity, and cultivate better data to inform expansion plans and business goals around the world. It can also reduce the internal bandwidth dedicated to Payroll and minimize the challenges of staying compliant with country-specific laws and regulations.

As an organization’s stakeholders select a solution to help them conquer their payroll challenges (in compliance and all other areas), they should pay mind to the many advantages it will create for their workforce. By championing the benefits, they will find it easier to achieve organization-wide support for the value of a change in payroll.

Building up that support is just one aspect of change management. In order to effectuate transformational change in Payroll without arousing anxiety, doubt, and resistance in their ranks, stakeholders should follow all ten keys to success outlined below.

Respect the Significance of the Switch: It can be very easy for stakeholders to underestimate the depth, breadth, and impact of a change in Payroll. As they pursue a new solution, enterprise leaders should pay mind to all of the various departments, individuals, and processes that will be impacted (and seek out a vendor-partner that will help them avoid disruptions and achieve stronger interdepartmental alignment via seamless system-to-system integration).
Put Strong Leadership Behind the Project: Without strong leadership, management, and advocacy behind the change project, the workforce is unlikely to see the implementation of a global solution as a common goal they should support. Make sure that a trusted, respected executive and a capable, experienced manager work together to win the support and collaboration of staff members in a top-down manner.
Make Sure the Right Voices Are Heard: When organizations fail to respect the input of employees at all organizational levels during a transformation project, they rarely make the right long-term decisions. Build out a collaborative project team – comprised of individuals from both Payroll and each of Payroll’s most closely connected departments – to ensure there is investment and buy-in from all impacted areas of the enterprise.
Understand Your Starting Point: Before you can build your future-state, you must take an end-to-end audit of your current-state landscape. Be sure to define both where your organization stands in its existing approach to Payroll (how many vendors, how many systems, how many touchpoints, and so on) as well as in its investment in enterprise globalization via shared service centers or administrative outsourcing.
Design the End-State for Maximum Benefit: Shifting your global payroll strategy shouldn’t be solely about shifting your processes to a new system – it should be about eliminating inefficiencies, realizing new benefits, and reaping better business outcomes from improved decision making and intelligence. Spend time rethinking your processes and priorities as you manage the change: Which areas need the most improvement? How will a new solution help you get there?
Pin Down the Project Capacity: Organizations achieve the greatest benefits when they unify their entire global payroll operation into a single managed services solution. Yet an end-to-end consolidation may not be feasible from the outset. Invest time and effort into pinpointing which locations or countries you intend to onboard to a new solution (and when) and which ones you’ll leave out of the project (and why).
Strategize for a Successful Roll-Out: Once they have a firm sense of scope, organizations must map out which geographies to implement first. Consider which approach works best for your needs and goals: Do you want to implement your highest headcount countries first, to realize the greatest benefits in the shortest amount of time? Or do you want to implement your easiest countries (from a compliance perspective) ahead of those with greater complexity?
Achieve Firm Vendor Alignment: Throughout the entire payroll change project, your selected service provider should be communicating with you regarding the many concerns that impact their customized processes for new clients. Make sure your new global payroll provider sets a reasonable implementation timeline and continually pushes the process forward to help keep your overall schedule on track.
Maintain an Open Dialogue: Not only should your project team and vendor team keep a conversation going throughout the project – complete with status updates and pre-planned review cycles – your project team should also stay engaged in an open dialogue with affected parties throughout the organization. If they do that effectively, the workforce will be better prepared to embrace the change once the implementation and onboarding phases begin.
Keep the Evolution Going: By launching a payroll change initiative and investing time and effort into a seamless transition, an organization proves its commitment to continually evolving, improving, and responding to challenges. And once multinational organizations understand the usefulness and value of a global approach to payroll, there’s no going back – creating an impetus for further transformation initiatives across the enterprise. As you implement your new solution, use your payroll change management roadmap as the starting point for further transformation initiatives.