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Payroll Risk mitigation is another main consideration, particularly given the challenge of maintaining compliance within the varying legislations of multiple countries. (See "Laying Down the Lay," page 28.) NelsonHall's report ranks it the third driver, and last year it was fifth. "With the average multinational firm using more than 20 HR and payroll systems, a single global payroll solution helps increase operational effectiveness while reducing the payroll compliance risks across multiple geographies," notes Steve Hardy, vice president of multinational client marketing for ADP. Patersons' Verrone agrees. "The laws and regulations that govern payroll have become extremely complex, and many organisations are now seeking a global payroll provider who has the expertise to maintain an understanding of local payroll rules and statutory changes and that can help them navigate the complexities and minimise their risk." Activity in EMEA A landmark contract announced in June further secured global payroll's foothold in the market. ADP struck a deal with computer and printer maker HP to deliver global payroll across 40 countries in Asia Pacific (excluding India), Europe, and the Americas (excluding the United States) via its business solution GlobalView. NelsonHall's Amy Gurchensky observes that GlobalView is available in some 80-plus countries: "Outsourcing to ADP will deliver greater process efficiencies to HP because of GlobalView's extensive delivery capabilities. Additionally, the deal will reduce HP's transactional cost of managing multiple country solutions while increasing compliance. While HP does provide multi-country payroll services, it has its limits in smaller countries where it partners with Patersons and Acrede. HP will also benefit from GlobalView's new user interface." Gartner's 2012 Magic Quadrant for Payroll BPO Services offers some more specific growth outlines in EMEA. The research firm shows that at least 50 per cent of companies in Western Europe already outsource payroll, with that number expected to rise due to the global recession. Emerging areas include China and India, with Latin America, the Middle East, Southeast Asia, and (on a smaller scale) Africa following close behind. Payroll outsourcing adoption should strike these markets. Gartner points out that as tax compliance continuously becomes more complex, organisations will become more ready to transfer the risk of it along with payroll administration to a third party. France and Spain have proved this point with accelerated adoption. In-Country Argument As with many chicken-and-egg arguments, the question is whether there ever will be a "right answer" on the value of outsourcing payroll via an in-country provider? It depends on whom you ask. An organisation with a single-country operation seems to make all the difference. "It depends much upon the needs of the client," notes Nick Laird, chief commercial officer, Ceridian UK. "If the customer is a single-country operation, then the deals are often won by major players in that country." "There will always be a market for best in-country providers that are servicing companies that are primarily based in a single country. Organisations whose desired outcome is to achieve visibility and compliance at a local country level would look to source deals of this nature," says Verrone. Not having local expertise can be a deal-breaker for some buyers. "It definitely does have an impact. Companies need local knowledge for outsourcing to deliver effectively," explains Neil Sutcliffe, BPO sales, HRO at Logica. "They want in-country experts on the ground that speak the local language and have the cultural understanding of how things work. This is especially important when it comes to matters relating to tax." Top Payroll BPO Drivers Source: NelsonHall's November 2011 Payroll Market Analysis Report 1. Reduction and control of costs 2. Global/multicountry platform managed by a single vendor 3. Compliance/risk management 4. Improved quality of payroll with a specialist 5. Better technology with regular updates 6. Process improvement 7. Focus on being a strategic HR partner to the business 8. Lack of resources 9. Reduced risk 10. Bad experience internally with payroll SUMMER 2012 | www.hroglobal.com [33]