Global Payroll Consolidation: Streamlining Payroll for Multinationals

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Caitlin: Hello, everyone, and welcome to today's webinar, "Global Payroll Consolidation: Streamlining Payroll for Multinationals." My name is Caitlin Alaburda, and I will be your moderator.

Joining us today are Thijs van Ingen and Edwin Rijbroek. Thijs is the Global Head for CSC's Corporate Legal Solutions business based in Amsterdam. Thijs collaborates with global clients, prospects, and business stakeholders to shape CSC's product development, vision, and strategy for CLS. Edwin is the Global Head of CSC Client Payroll based in Amsterdam. For about half of his 22-year tenure in the financial industry, Edwin has been supporting international corporate clients in navigating the complexities of setting up operations in the Netherlands and other European countries. And with that, I'd like to welcome Thijs and Edwin.

Edwin: Thanks, Caitlin. Great to be here. Let me walk you through the agenda first. And so Thijs is going to tell you a bit about CSC, where global payroll sits within our organization and our entity management framework. Then he will pass on the word to me again, where I'm going to tell you a bit and go through the key challenges we have or you will probably be facing when you manage multinational payroll. And then we're going to talk about and I'm going to show you what our model looks like and how it works and then our payroll platform. And then, at the end, we will probably have some time for a Q&A.

Thijs: Thank you very much, Edwin, and great to be here today with you on this payroll webinar. I'm glad to take the audience through the About Us, what CSC stands for. We're really the world's leading provider in business administration and compliance service. Today CSC is present in five continents. We offer services in over 140 jurisdictions. We do that with a workforce of over 8,000 staff globally. And today CSC services multinational clients, fund clients, asset managers, financial institutions, and family offices and private clients. So we really cater towards the entire industry.

What we really like to emphasize on is that CSC has a long history. It's an establishment for over 125 years, and it's privately owned and professionally managed. I think that makes a big difference in the industry today.

What we really offer globally for all our clients is the full life cycle of entity administration. With that, I mean we incorporate entities, we do the full corporate secretarial services and directorship services for entities, the accounting and reporting services we can offer, as well as banking compliance, and of course payroll, which will be the focus of this particular webinar. So we call that our full 360 offering for multinational clients either domestically in each region or expanding from one region into another.

What I'd also like to bring under the attention of the participants today is our General Counsel Barometer, which is an annual survey we typically fulfill in the month May. And the outcome of that was pretty interesting in 2024, where we interviewed over 400 general counsels around the world. We really covered each and every region from the Americas to EMEA to APAC. And one of the key findings was that almost 100% of the multinationals plan to maintain and grow their footprint in other regions or even globally. Another outcome was really that 61% of the in-house legal, HR, and compliance professionals face challenges when putting infrastructure in place to keep pace with the global expansion they foresee. Outcome of the 2025 General Counsel Barometer is expected, as I said earlier, in May, and obviously we're going to be very happy to share that with the people on this webinar today.

On this slide, I'd like to take you through the top challenges of managing legal entities globally or also managing subsidiaries globally. Out of the surveys we do and the day-to-day contact we have with our multinationals, there are several challenges that keep coming back.

One of the main challenges we're being faced with, when we speak to the legal team, the HR team, and the compliance teams within the multinational is that local knowledge and expertise they're looking for in jurisdictions where they're expanding into, but also the governance and regulatory considerations that they're going to be faced with if they venture into a new market. A third challenge that we see coming back is obviously the tax developments, the changing tax developments, and the importance of substance into their international structuring.

Another major challenge for a lot of our clients that have a large portfolio of subsidiaries around the world is that dealing with multiple stakeholders and service providers in all these jurisdictions, service providers on the tax, on the legal, on the payroll side. They all have to manage it. The larger the portfolio gets the more jurisdictions they're in, that becomes a challenge for them. So we see more and more that are looking for a one-stop shop, 360 solution with a few carefully selected service providers.

Also navigating different regulatory requirements and managing the deadlines that are applicable to each of their subsidiaries is a huge challenge and payroll. Payroll, they have a global need on it, but it comes with a lot of local expertise. We're going to talk about global payroll in a lot of detail, but it's definitely a challenge we see coming back.

I mentioned it to you before, but what you really see here is our global subsidiary global coverage. We call it Global Subsidiary Management. A lot of clients refer to it as Global Entity Management. But what it really entails is a one-stop shop solution, a 360 solution for sizable multinational clients that are crossing borders where we, as a service provider, take care of all their legal, all their accounting, and all their HR requirements. Our Global Subsidiary Management model really combines you with one dedicated team that is built around your portfolio, one service agreement that can be used in over 140 jurisdictions where we offer our services, one centralized way of billing, creating a lot of budget certainty for our clients as well, and again, that reach, that global reach we offer clients.

So that results, in the end, in what we call a unique client-centric delivery model. And I think the image you see here, on the right-hand side, really shows how we build that around each and every of our multinational clients.

And then we're going to really move to the payroll topic, which you all signed up for in this webinar. And I'd like to hand it over to Edwin.

Edwin: Thank you, Thijs, for this introduction about CSC and what our Global Subsidiary Management solution looks like. But now it's time for payroll. So first, and I think most of you will recognize the challenges you have in managing multicountry payrolls.

So here are just a few examples of what challenges you are faced with if you manage multicountry payrolls. And when you are a U.S. payroll manager becoming responsible for a UK payroll as well, you probably still can manage it. It's the same language. You're familiar with the system, or you can learn it very easily. But if you become responsible for 5 or 10 countries, it becomes a real challenge because you need to manage all the different deadlines. In each country there are different deadlines, the different templates, different rules and regulations you have to keep track of. Managing the different vendors, just logging in to their platform, getting your password, and all those practical things make it very hard to manage and to make sure all the employees are paid in time because that is the goal, that the employees should be paid in time and, of course, the local authorities. And once you have managed that, you need to create a report for your HR team, for finance.

So to consolidate all those different templates, all those different outputs that you get from the local teams in different languages, currencies, that is really time consuming. So once you have completed that, the month starts all over again, and you need to start right from the beginning. So it is really hard work to manage those challenges. And yeah, as a partner, we can really help you to streamline that process through our coordinated service model.

Thijs already mentioned about our Global Subsidiary Management solution, that it is about a coordinated service model. Well, that is what we apply to our Global Payroll solution as well. So let me show you the following slide, where we're going to talk about this solution.

So this is what our coordinated service model looks like. And I can tell you about this standard or very common situation, where a client has employees in the various different countries. The client can communicate, or we will give the client access to our Global Payroll platform, and through this platform they communicate with the local teams. So, in fact, the Global Payroll platform is the interface between the client and the local teams. And through that interface, the client can communicate safely and securely with the local teams, exchange documents, upload the information, and send payment notices to the local teams. No need to send that information through an email anymore. So also, from a GDPR perspective, this is a big plus.

Then the Global Payroll platform is a workflow tool because you can see how the payrolls are progressing throughout the month, and whether you are on time, whether you're meeting your deadlines, to make sure that all the employees are paid in time and the local authorities as well because that is the big aim of our Payroll team. And then, once all the local teams have uploaded the information into the platform, you can run standardized reports and consolidated reports. And I think this is very helpful because there is no need for you to reach out to local teams if you need some information.

So for the monthly process, we use our Global Payroll platform. So technology in a process where that's always under time pressure. There is always a deadline to meet for making sure the payroll is completed in time.

But you all know that payroll is not just about completing the monthly cycle. It's also that you receive questions from employees, or whether you receive a letter from local authorities, or you have a certain project because you need to run an additional bonus round, or there is somebody going on maternity leave in a certain country. So for those type of questions, you go to the Global Payroll manager because we assign a Global Payroll manager to each client. The Global Payroll manager will, together with the expertise of the local teams, answer your question. So this example about the maternity leave, the Global Payroll manager will provide you with the documents that you need to complete and can inform you about the days of leave that the employee is entitled to.

And thirdly, this is what Thijs also mentioned before, we can engage clients for all those countries by a single service agreement, what we call the GSM customer service agreement. If you want to add a country because you grow into a new country, you can simply make an amendment letter, and there is no need for you to go through a painful process of reviewing terms and conditions and negotiating with the new vendor in that country. Just a simple amendment letter.

So our Global Coordinated Service model is based on three pillars — the Global Payroll, platform, the Global Payroll manager, and the single service agreement. And that will make and that will help you to become more efficient in managing your payrolls.

So here you can see in which countries we can offer our Global Payroll services. We have local expertise across 110 countries, and this number is still increasing. But as you can see, in all the green marked countries, we have presence on all the continents. In Europe we have pretty good coverage, in the Americas, but also in the APAC. And it is different right? So like I said before, if you have a payroll in a single jurisdiction which is close to your home country, you probably can manage. But if you have to manage and are responsible for the payrolls in a completely different continent, it can be very complex. U.S. payroll where you have every two weeks a pay slip is different from Europe or other countries. And also the benefit packages and pension is arranged differently in all those different jurisdictions. So it can be very complicated, and it is very easy to make or to do something wrong. So a good partner is very relevant for your operations.

So let's focus a bit more on the Global Payroll platform. The Global Payroll platform is managed by the centralized payroll team. They are responsible to set up the payroll platform for you, and if you have any questions about the payroll platform, you can reach out to them.

And the payroll platform comes in different packages. So what I discussed earlier is the standard package. It's what we call the Operating Control and Reporting Module. It contains the workflow management, the secured collaboration, and the consolidated reporting tool. But it also has a key performance indicator dashboard. In the key performance indicator dashboard, you get information on how many payrolls you will have processed in a certain month or a certain period. But it also tells you a bit about the quality of the local teams because it gives you information on how many times a payroll has been rejected and what the first time right percentage is.

Then on top of the standard package, we have specialized packages. The Employee Portal is one, and the Employee Portal is a way for employees to get their pay slips. These are the local pay slips in their local language that have been uploaded into the portal by the local teams. Our portal is not an HR information system, so the employees are not able to make any changes to their bank account or change their address. It is a portal just to get your pay slips and annual statements and those kind of documents.

Then we have Accounting Connect, and Accounting Connect is a tool that generates a journal entry. So as soon as all the payrolls have been completed, through the accounting connect you can generate this journal entry that you can upload into your ERP system.

And then, finally, we have HR Connect, and HR Connect makes the data gathering and data preparation phase a lot more efficient. From meetings with clients, we have heard that sometimes more than five different sources feed into payroll, and it takes the payroll teams a lot of time to prepare country-specific files for the local vendors in order to inform them about any changes in the payroll for that specific country. With HR Connect, this is no longer required. You can just upload the files containing the information of your whole population, so all the employees across the world, and then the HR Connect filters from those files, filters the information just relevant for the specific country. So the team in Germany only receives information relevant for Germany and not the information for Hong Kong. And the team in Singapore receives the same for Singapore.

It saves you a lot of time, and you become much more effective and efficient as a payroll team because the HR Connect also has a validation tool in it. So the information that is uploaded, what the changes have been, you can see whether the local vendor has processed these changes correctly. For example, when there was a bonus of 500 and the local team has only processed 50, you see immediately that there is an mistake made there, and you can correct it before approving the payroll.

Now going to the payroll demonstration, unfortunately we cannot give you a full live demo right now because that would take too long. But I have included a few screenshots and will talk you through that so at least you have a bit of a look and feel of what the platform looks like and how easy it is to use. Of course, if you want to have a demo session, we are very much happy to schedule a session with you, which typically takes half an hour to three-quarters of an hour, and to talk you through all the details and you see it live.

So when you look into the platform, and it is a web-based application, when you log in, this is the dashboard that you will see. In this specific demo environment, this client has three payrolls in Denmark, Finland, and Italy. In Denmark, that is what we call a pay group, and each pay group can be set up separately. So we can assign user rights to your team members so you can make persons responsible for Denmark and another one for Finland. And it's all based on a payroll calendar. So that is driving the deadlines and the due dates in our platform and in our workflow too.

And then, in the middle, with the circles, we see the six-step process of the pay cycle. And each process step has a deadline. And with the color coding, you can see whether you are good with the deadlines, with orange whether you are nearing a deadline, and red whether you are overdue. So it helps you to organize your work. And when you open the platform on Monday morning, you see right away where you should start and put your focus on first in order to make sure you meet all the deadlines and all employees in that specific country get paid in time.

One other feature is that you can receive notifications, email notifications if things have changed in the platform. So there's no need to go into the platform and check whether something has changed. Now you just wait for the notification, then go into the platform and do the next steps that you should do.

This slide is the screenshot of the dashboard how you can approve your payrolls. Sometimes we hear from clients that they receive like 10 or 15 pay slips and with a question please approve those pay slips, sometimes not even in a language you can read. And then it's very hard to make a decision whether you agree or whether you are fine with the payroll output.

In our platform, the approval for the payroll and for the pay cycle is done through this view. So you compare the current period with the previous period, and you can see what the difference is between the current and the previous period. So in this specific case, you see that the gross pay is a little more than 9% off compared to last month.

So you want to analyze where is this difference coming from. And by clicking on the lines, you can really drill down to the employee level to see what is generating or what is creating the difference. And you can do that with the gross pay, but also with the employee contributions, and everything can drop down so you really can make an educated decision whether you want to approve or decline the payroll. You see now the variance in percentages, but you can also see the dollar amount. And if you have a query, you just send a query to the local team. For example, the bonus payment is not clear to me because have you forgotten about the bonus of a certain person. If you send a question to the local team, they can answer it. You will receive a notification that the query has been answered, and you can log in to the platform again to approve or decline the payroll output. So here it is a standard way of approving payroll output, and it is really making your life lot easier.

So here you see the reporting dashboard. In the middle, you see some standard graphs where you can see how the gross pay has developed over a certain period. And on the top, you can select whether you want to see this on a monthly basis, quarterly, or a yearly basis, or a custom period. By selecting on the left-hand side the countries or the regions, you can really specify those graphs for a specific country or see it for the whole population. And you can see that for the gross pay, the total employer contribution, employee contributions, or even the number of employees you have in the various jurisdictions.

If these graphs don't give you sufficient information, you can build your own queries. And that is very easy to do by selecting a salary component, a country or a region or a group of countries, and then the period. And just by running the query, you can have that information. All the information is exportable to Excel. So if you have the data, you can very easily build and create your own report of it.

I think the good thing about the platform is that if you need to answer a question that you don't have available and need to run a query, the information is really available. Where if you don't make use of the platform and you work with separate vendors, you need to reach out to them each and everyone individually, wait for the reply if there are different time zones. With our platform, if you receive a question from HR or from finance, you can send them an answer within an hour. And I think this really saves you a lot of time in selecting and reporting on payroll data.