Background – A key component of a Peeriosity membership is the ability to benchmark quantitative performance in eight key process areas, and the ability to see differences in structure and design for 28 different business processes that are often candidates for Shared Services. This research abstract looks at the composite results of the structure and design survey as it relates to the Payroll process.

Payroll Organizational Structure – Looking first at the results related to the organizational structure for Payroll, the majority of companies (58%) include Payroll as part of their Shared Services operation.  This is clearly the dominant design, with the second most popular response (Combination of Two or More) only being utilized by 18% of the companies participating in the research.  The corporate model and the decentralized design had 11% and 13% of the responses respectively.

Clearly, the Shared Services design is becoming increasingly popular as companies continue to expand the scope and scale of their Shared Services operations, with Payroll being a natural candidate to be part of that type of organization.

Payroll Geographic Design – Statutory differences between countries certainly create a number of obstacles to a global approach to Payroll (4%) and that is reflected in the results of this survey.  While many organizations take a country-specific (36%) or multi-country (18%) approach to geographic design, a fairly significant percentage (33%) have either a regional center or multi-regional structure to take advantage of the inherent efficiencies that can be realized when utilizing that type of design.

Payroll Process Standardization – Process standardization in Payroll has many of the same inherent challenges as does geographic design when borders are crossed, such as regulatory issues, cultural practices, language barriers, and the particular demographics of the workforce.  As a result, 39% of the companies utilize a single-country approach to process standardization.  However, 43% are taking on the cross-border challenge, with the multi-country (16%) approach being the most prevalent.  Surprisingly, 18% of the companies have not yet standardized the Payroll process.

Payroll Labor Sourcing – Outsourcing of the Payroll function has been prevalent for many years, with the split between outsourced and captive now being fairly even, with 54% using a captive model and 46% using some type of outsourced model.  The location of Payroll processing activities favors onshore locations, with 58% of the companies using this approach.

Further details regarding these survey results, including company-specific responses, are available to Peeriosity members in the Benchmarks section of the Shared Services Leadership research area.

How does your company’s Payroll design match up with other major companies from across the globe?  Is it time to take another look at your approach to Payroll operations and standardization?

Who are your peers and how are you collaborating with them?