Global Payroll Outsourcing

One of the major irritations to multinational companies attempting to manage their employees through a single database is the inability to outsource payroll to a single provider. Instead, if the MNC is in 20 countries, it's likely they will have a centralized PeopleSoft or SAP HRMS with 15 or so interfaces to multiple payroll vendors. Managing all these interfaces is difficult and getting clean payroll data back in like formats for reporting purposes is all but impossible. (I'd like to hear more on this topic from you guys in Asia/Pac/Aus and EU).

Today, Ceridian announced some global capabilities. I'm actually a little skeptical as Ceridian hasn't been able to connect their own domsetic systems well, so the chances that they can do it globally are even less likely. However, Ceridian seems to have a centralized outsourcing center in London to handle global payrolls. I'm not sure what platform they are running on.

In contrast, ADP has been doing global payrolls for ages. They own the largest payroll outsourcers in Europe, and have a huge footprint in Asia/pac as well. If you want global outsourced payroll on a single platform, they are using SAP as the gross to net engine and they interface to their local ADP backbone for stuff like taxes.

I'm sure the major HRO players have capabilities as well, but I haven't researched these.

HRO and non-cost decision drivers

First of all, if you have never looked here - check out Cap Gemeni's library.

So Cap Gemeni comes out with a survey that organizations looking to outsource really have other objectives other than cost savings. Obviously these have to do with efficiency and their ability to drive strategy and core business focus. They also want the vendor to share some of the compliance risk associated with doing business. For example, if benefit administration cost reductions in the SLA's are not acheived, the client may receive reduced fees, or Sarbanes Oxley compliance might already be in place for an outsourced payroll vendor.

My issue is not with the survey, but with the client expecations and execution of the non-financial drivers.
First, when you plan to convert your existing workforce to a less transactional group, how do you displace these workers as there will always be a need for some transactional level on-site.
Second, these transactional workers may not have the skills needed for strategic execution. Thus, you can't displace them, but you can't use them either. This means you are hiring additional unexpected headcount.
Third, are you planning process change and change management around the outsourcing environment? If not, how do you actually expect to convert your organization to this stragegic group?

Just something to think about. Most organizations know exactly what cost savings they will achieve, but they haven't planned how to EXECUTE the non-cost decision drivers.

ADP hiring index for Background Checks

I'm very curious if ADP's background check press release that the number of checks has tripled since 1997 is a realistic number. While I'm sure that as talent management has taken over the industry, the number of checks has increased in order (not to verify skills) to ensure the proper talent is aquired, I'm not sure the number has actually tripled.

ADP acquired their background check organization in 2001 or 2002. With that, I'm thinking that ADP's sales engine significantly contributed to the growth of THEIR background check numbers - not total background checks in the industry. Just wondering as I'm always reporting on statistics, and some of them doen't make sense.

Here's some stats from the press release:

Reference Verifications: 50 percent of employment, education and/or credential reference checks revealed a difference of information between what the applicant provided and the source reported. This finding represents a two percent decrease compared to the 2004 Hiring Index. In performing the reference verification checks, seven percent of the information differences were received with negative remarks from the source in regard to the applicant. In comparison to last year, this is a one percent decrease.

Criminal Records: Five percent of records checked for a criminal record in the last seven years revealed the existence of one. This finding is consistent with the 2004 and 2003 Hiring Indexes.

Driving Records: 29 percent had one or more violations or convictions on their driving record, a two percent decrease from last year. In addition, two percent had one or more drug or alcohol violations on their driving record in the last seven years.

Workers' Compensation Claims: Among checks conducted to see if the applicant had a previous workers' compensation claim, eight percent showed the existence of one. A two percent decrease compared to checks of this type performed in 2003.

Credit Records: 45 percent of credit records checked showed a judgment, lien or bankruptcy, or that they had been reported to a collection agency. This finding represents a one percent increase compared to the previous year.