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From the Desk of Bjorn Reynolds

As we move into the second half of 2016, we are excited to announce the launch of our revitalized newsletter: “Making Global Pay.”

Each issue will bring you insights from across the industry and within SafeGuard World. I have the benefit of working with some extraordinary Guardians who witness first-hand global business challenges and help global HR and payroll organizations create innovative ways to help their companies drive strategic growth.

Whether you are planning an expansion, hiring new workers in new countries, or planning on changing your global payroll processes, there are plenty of things to consider. Often, when managing a global operation, what deters companies from capitalizing on the business strategy is a lack of expertise, resources or the right data. But it needn’t deter them.

“Making Global Pay” will help you identify some challenges finance, HR, IT, legal, and of course, global payroll folks regularly encounter. Regardless of the scope and size of the challenges you face over the coming months, SafeGuard World is on-hand to navigate you through your global journey.

Our hope is you find this information useful as we work to innovate how the world gets paid!

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China NGO laws impact work laws. Regulation changes can have an impact on your workers in other countries. Read about what happened in China recently.

Embezzlement by global payroll manager makes the case for more centralized controls. Managing global payroll has many moving parts, which is why companies that have greater visibility into what is being processed can reduce fraud.

New revenue recognition standard emerging as concern for companies. Read more about the approaching deadline for public companies to comply with new regulation.

CIOs say outsourcing is about filling talent gaps, not saving money. Read more about this survey.

New overtime rule prompts considerations on compliance, payroll procedure changes. Deadline to comply by Dec. 1, 2016.

New EU data protection rules come into force. Learn about the 10 facts your business needs to know.

India overhauls foreign ownership rules to attract more overseas investment. New rules expected to create more jobs in India.

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Compliance on a Global Scale

By Nick Stanton, SVP Global Workforce Solutions

In international business, staying in compliance can seem like a minefield. It’s layered with complexities spanning employment and payroll practices where any regulatory misstep can result in serious implications.

For example, it’s not unheard of for companies who are setting up shop in a foreign country to experience one or more of the following scenarios:

  • Regulations are usually documented in the native language
  • Social expenses and tax calculations are unfamiliar and often confusing
  • Banking processes can be undependable
  • Diverse cultural and business approaches are difficult to adopt
  • Different time zones and currencies make transactions more complex

Consequently, companies quickly learn that specialized knowledge in compliance is required in order to minimize the risks and costly penalties associated with global employment and payroll practices.

A Crash Course in Compliance
Compliance for multinational companies typically starts with the global employment process. Whenever an employee joins or leaves an organization, companies are responsible for registering or deregistering employees with the appropriate authorities to ensure their right to work in a particular country.

Organizations must also obtain the appropriate visas and paperwork for every employee, and they need to register them for the appropriate social and company-affiliated programs. There are also different rules that mandate the specific types of data a company is permitted to maintain for its employees.

Another area of concern for global organizations is compliance with various tax codes. While all countries offer tax relief and require similar documentation for filing, each country is different when it comes to the following tax laws:

  • Every region has particular rules for how taxes are calculated
  • There are numerous processes to work through to determine which types of tax filings are required
  • Tax filing deadlines can vary, as can the timeframes for filings to be withdrawn or adjusted and resubmitted

Simplify with Support
According to Thomson Reuters, regulators update a whopping 155 rules a day. With this number only expected to increase, it should come as no surprise that organizations are finding it difficult to stay current with new rules and implement them seamlessly.

Take, for instance, the questions companies must answer with any new change that may arise:

  • Do the changes apply to our organization and our current environment?
  • What must we do across the board with each particular change?
  • Are the changes retroactive?
  • Can we catch up on these changes later?
  • What is the best way to manage these changes?

Given all of this, maintaining employment data and tax information in-house within a single environment can be a struggle for companies working in multiple geographical territories. Disparate systems fail to provide a single view into local laws and regulations, and staying up-to-date on local employment and tax knowledge can be nearly impossible without in-country experts.

If your company is struggling to achieve compliance on a global scale, consider partnering with a global payroll provider who has country-specific HR and tax regulations. The provider you choose should have a global network of in-country experts selected according to stringent criteria and a robust vetting process, with continuous reevaluation of performance. Only with resources like these can your organization mitigate global employment risks.

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Major Multinational Distributor Gains Unprecedented Visibility of Their Global Payroll

DistributionNow (DNOW) is one of the largest distributors to the energy and industrial sectors, providing a comprehensive line of products for the upstream, midstream, downstream and industrial market segments, as well as value-added services including supply chain management, project management, and e-commerce solutions.

DNOW’s roots are derived from two oil well industry giants — National Oilwell and Varco International, which merged in 2005 to create National Oilwell Varco (NOV).

The Challenge
In late 2013, NOV decided to divest its distribution services to create DistributionNOW. As a result, DNOW had to determine how to pay all of its employees in 24 countries spread across over 300 processing and plant locations.

Seeking a more streamlined approach and improved access to data, the newly independent DNOW first selected Workday Human Capital Management (HCM) as its global HCM and Workday Payroll for U.S. and Canada as its payroll solution for those countries. Next, DNOW quickly needed to ensure its international distribution employees could get paid properly and on time.

DNOW had to address some fundamental operational questions before fully deploying a solution such as:

  • Where is the payroll data housed?
  • What would it take to access and retrieve the data?
  • How must the payroll calculations be done?
  • What is the best way to integrate the data with Workday HCM?
  • Who would be supporting the operations internally?

Additionally, DNOW management wanted access to underlying payroll data to support strategic decision-making, something previously unavailable. However, the expertise to assist with these questions resided in NOV, and was no longer available to DNOW.

Consistent with DNOW’s recognized “Do it NOW” mentality, the challenge was to have all payroll distribution processes live within three months to pay the employees in the first set of countries — without any interruption.

The Solution
SafeGuard World International, along with DayNine, a leading Workday implementation partner, were selected after an accelerated, three-week evaluation. SafeGuard World’s contract stipulated that the initial phase of the countries outside the U.S. and Canada, constituting approximately 100% employees, had to be fully operational within three months. This had to work alongside DNOW’s deployment of Workday HCM and Workday Payroll for over 5,000 employees in the U.S. Additionally, the international-based employees had to be integrated within the Workday HCM system of record.

SafeGuard World was selected because of its longstanding relationship with Workday as a Global Payroll Cloud Partner and its success with other Workday HCM clients. As a Global Payroll Cloud partner, SafeGuard World offered Workday certified pre-built connectors for each country in which DNOW operates. This meant that DNOW could take advantage of Workday’s seamless and proven bi-directional integration capabilities. Payroll data could now move from Workday HCM to the international payrolls and back.

The Approach
First, DNOW and SafeGuard World had to tackle their fundamental questions. In some countries, no one person had the experience to gather the necessary requirements within SafeGuard World’s project methodology. SafeGuard World responded by structuring a global team — a combination of global solution designers and regionally based payroll experts aligned with DNOW’s needs.

SafeGuard World deployed its team to conduct onsite discovery meetings to rapidly gather requirements for the new solution by reviewing existing payrolls, end-to-end processes, resources and constraints. Because future global reporting and data analytics were an extremely important business outcome, SafeGuard World’s global solution designers worked to harmonize the data across all the countries as granularly as possible, especially given many country variations.

Simultaneously, the DayNine integration team worked on the Workday HCM deployment. To meet the deployment time lines and ensure that employees were paid, clear and constant communication between all parties was crucial. This deployment quickly became an orchestrated dance with all parties ensuring that the downstream payroll processes were synchronized so that accurate and timely payment of employees would not be jeopardized.

Turning Global Payroll Results into Actionable Labor Expense Data

Using dashboards and Workday’s Cloud Connect For Third-Party Payroll, DistributionNOW (DNOW) has turned payroll results from 14 countries into easily understandable labor expense data used to make informed investment decisions. DNOW has reached the optimum level of Human Capital Management (HCM) and payroll integration with Workday Global Payroll Cloud Partner, SafeGuard World International.

The Results
The new payroll deployment was a resounding success, the proof being that there was no interruption, no missed payroll, no missed filings, no pushback or complaints. Essentially, there were no problems.

Wave one, covering seven of 14 countries, sped through a two-month payroll implementation, going into “live” payroll production in the third month. The Workday integration followed the next month after integration testing was completed — a timeframe almost unheard of given the complexity involved. The next payroll waves mirrored a similar path.

What did DNOW gain from the seemingly astonishingly quick implementation approach? The overall benefits achieved were quite significant and justified the push for “Do it NOW” including:

  • Enabling a quick and total separation from former parent NOV without adverse implications to its transition services agreement
  • Enhancing compliance in all DNOW countries
  • Standardizing payroll business processes globally
  • Increasing automation, driving cleaner data and better financial controls
  • Gaining access to spend data facilitating labor cost analytics
  • Obtaining visibility into global payroll leveraging a bi-directional capability

DNOW is also utilizing Workday’s Payroll Interface Common Inbound File (PICIF). This import facility allows SafeGuard World to map aggregated details by country from SafeGuard World’s Unity® system to Workday HCM for inclusion into Workday’s robust global analytics dashboard. As a result, DNOW executives have a comprehensive real-time view of the time sensitive payroll process in addition to a series of visually appealing workforce analytics of their entire global population.

The proven bi-directional Workday HCM and SafeGuard World integration offers an added bonus that will prove to be crucial to serving the ongoing business needs of DNOW. Considering DNOW’s industry, acquisitions will likely be in the company’s future. Now it will be prepared to act quickly.

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We hope to see you at these upcoming events.

July 12–14, 2016 InsideNGO Annual Conference, Washington, D.C.

August 1-3, 2016 Workday Altitude, New Orleans, LA

August 12, 2016 NPA Recruiter Networking Event, San Francisco, CA

September 21-23, 2016 IPPA Business Excellence Conference, New Orleans, LA

September 26-29, 2016 Workday Rising U.S., Chicago, IL

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