Payroll Diversity
Payroll: What Are We Talking About?
The business process, best practices and applications used to calculate the components of pay, support the distribution of funds and maintain regulatory compliance.
It includes the following activities: data capture and control; calculation of salaries, wages, allowances and deductions; editingand dispatching; third-party declarations; legal maintenance.
It includes the following activities: data capture and control; calculation of salaries, wages, allowances and deductions; editingand dispatching; third-party declarations; legal maintenance.
The business process, best practices and applications used to calculate the components of pay, support the distribution of funds and maintain regulatory compliance.
Definition
Payroll Value Chain
Payroll is made up of multiple sub-processesthat are combined in a consistent value chain.
Each sub-process corresponds to a series of tasks that require dedicated skills and expertise.
Source: ADP
How Much Does Payroll Cost You?
The HR Costs Pyramid
Payroll is a Paradox
Payroll is non-core, but…
is at the centre of the relationship between companies and employees;
is the main – if not only! – tangible part of the company’s rewardfor the skills and work supplied by its employees;
paying employees accurately and on time is more than a legal responsibility for a company. It is a basic commitment to employees and a mandatory prerequisite for internal stability;
payroll data is the foundation of a reliable HR information system;
at the international level, payroll is made even more complex by the variety of legislation. International firms have to copewith different payroll rules wherever they operate;
… mission critical.
Why Do Companies Outsource Payroll?
HISTORICAL DRIVERS
To prevent disruptionTo get accurate payslip on timeTo reduce riskTo ensure business continuityTo keep up to date with ever-changing legislationTo gain flexibility in turning fixed costs into variable costsTo benefit from a secured environment and high level of confidentiality
ADDITIONAL DRIVERS
To focus or get back to core businessTo free up resources for more strategic tasksTo face payroll specialists shortage on some marketsTo take advantage of the most recent technologies
Propensity to Outsource by HR Function
Source: HR Transformation Survey, European mid-size & large companies, ADP-HROA Europe, November 2007
Appetite for Payroll Outsourcing is Getting Stronger
Is Payroll Outsourcing a European Phenomenon?
The Outsourcing Wave In Europe
> 50%
21% - 50%
10% - 20%
< 10%
n/a
Payroll outsourcingadoption in percentageof total number of employees
Source: IDC and ADP
Has Multi-Country Payroll Become a Reality?
Functional Scope Breakdown in Multi-Country HR BPO Deals
Source: Analysis of 50 European multi-countryHR BPO deals 2003-2007, ADP
Models and Service Levels: Identifying Territories
Segmentation of Outsourcing Options
Source: ADP (derived from Gartner)
Processing Services Vs. Managed Services
Processing Vs. Managed Services
Source: ADP
Will Payroll Outsourcing Ever Stop Expanding?
Outsourcing Expanding Beyond Payroll
Source: ADP
Outsourcedfunctions
Getting Ready for Payroll Outsourcing - The Key Stages
Initial Steps of Payroll Outsourcing Journey
Source: ADP
“ Getting the most of payroll outsourcing hingeson preparation and method ”
Let’s Wrap Things Up
Payroll is non-core but mission critical;
Payroll outsourcing is one of the oldest and most developed forms of outsourcing and now offers complete models for going all the way;
These days no sector of activity, from catering to banking and chemicals to automobiles, can claim a lack of suitable offerings;
Outsourcing services can be picked « à la carte » - from basic data processing to the complete transfer of responsibility for a payroll department.
But…despite all those good reasons, the ultimate factor in decision-making also relies on some intangibles:
Outsourcing is much more than a function outside; it’s a partner inside!
Payroll Outsourcingin Europe
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