It is a common practice in business to instil confidence by demonstrating our portfolio of client’s success. But name dropping doesn’t solve the questions that may come from payroll complexities because every client is different although for simplistic sake, they may be grouped as MNCs, SMEs, startups etc. But when payroll managed service providers like us begin to identify clients by the latter, that’s when we’ll miss servicing clients with the right control, measure and attention. I say this despite acknowledging technology can live up to the one-size-fits-all status; well sometimes.
Joining me today to shed light on this subject is Mardiana Wati, our Head of Payroll.
The industry of payroll outsourcing dates back decades, with promises of removing the burden of processing salaries, entitlements, benefits, deductions etc. This desk-bound job does not cost much when a company has less than a dozen people but as the enterprise grows, so will the pressure of meeting payday on time.
Multiplying a dozen headcount to the size of an MNC or conglomerate and we’ll have a big problem to solve if we’re not attentive to the different salary bands, payday sequence, shift patterns, compliance requirements etc. So the question is, will my payroll problem go away when the latest payroll gizmo comes to town? I’m afraid many have said yes as they rushed to acquire their own in-house HR or payroll enterprise system in the last decade or so. Time has however proven otherwise about their decision.
The Platform Rush
I’m a tech enthusiast and tech was where I started my professional career as well but back then, to place the full load on payroll platforms without sufficient care and control, and without the sophisticated advancements we see in robotics and AI like we see today was really taking the risk to dive without knowing the depth. We saw this trend when holistic payroll solutions were promoted as the silver bullet to solve all payroll problems. These systems were expensive but they promised to free up HR resources from the desk-bound payroll responsibilities. But what we saw instead were cost and time overruns, higher HR headcounts to manage the system, frustration due to system limitations, not forgetting staff turnover. A decade on, many have and are still looking to turn their backs on their proprietary payroll platforms.
But just how much work is managing payroll? According to Payroll Outsourcing In 2024: The Ultimate Guidepublished by Forbes, the following are generally what a company would consider outsourcing to a vendor to improve internal efficiencies:
- Payroll account setup
- Payment method setup
- Tracking time worked
- Calculating wages owed
- Delivering pay
- Instituting security measures for safeguarding company and employee information
- Ensuring compliance with government regulations
- Withholding payroll taxes, income taxes and garnished wages
- Managing employee deductions
- Remitting payroll taxes
- Completing end-of-year tax work
In the Malaysian context, the only item not applicable is the Withholding Payroll Taxes. But what we do help our clients with in this regard (pertains to overseas employees) is to impute the applicable taxation criteria so both the company and staff are compliant in their respective jurisdictions. While this last mile attention may constitute only a fraction of the end-to-end payroll process, it continues to be a vital component that must be addressed without a glitch.
Managing Payroll as a Service
To elaborate further, when overseas candidates are hired as employees, they become new headcounts of the company’s human resources. To process payroll for them, it goes back to business 101 of supply and demand. In other words, the heavier the presence of foreign staff (demand), it justifies the investment into a payroll system capable of processing foreign payroll requirements. If the demand is weak, HR at headquarters will have to find the best alternative solution. But let’s be honest, how many can vouch for finding the right solution without the fear of systemic failure and human errors?
How do we do it at CXL Group?
As of February 2024, I am proud to say that we have on-site in-house expertise to process payroll that is fully compliant to the Malaysian, Singaporean and Indonesian standards. We are also familiar with the requirements in Thailand and the Philippines. Further away from the Asean region, we have processed payroll for candidates in Hong Kong, Japan and the Middle East, just to name a few.
Whether we undertake the payroll work on our own or forging a working relationship with reliable counterparts overseas, we begin as payroll experts first. This ensures the Service Level Agreements (SLA) we have with our clients do not disappoint.
To further tighten the processes, we conduct periodic reviews to allow both our clients and us to take a closer look at how the system has performed and where the quality of our service stands. That’s where control, measure and attention mentioned above come in to drive every payroll procedure because the heart of the processing centre remains in Kuala Lumpur. Without the strict monitoring backed by years of sound knowledge and experience, we put pay cheques and also tax declarations at risk and that’s not why CXL Group is in business.
To be in business means to be committed to our cause. This is why we run Client Satisfaction Surveys at random intervals so we can identify and bridge the gaps in our service to our clients. Then at the corporate level, we strive to pass the annual ISO audits so that we can retain the mark of confidence and convey the same back to our clients.
I am happy to report that our clients’ feedback has been positive for our minimal error rate and prompt response time. Complaints and terminations have been few and far between too but when they do occur, it’s usually from clients that were already overwhelmed by their own market setbacks and were looking for ways to trim their expenses. Otherwise, most clients are with us for the long haul, more than 8 or 10 years.
It is our ambition one day to set up a 24×7 payroll processing hub that can serve every country and time zone that our clients want us to. Given the market’s dynamism and how robust and nimble technology can be, I believe this dream is achievable.
If you have any questions, we are happy to answer them via email : [email protected]
