But why did it not go live?
“The requirements were very complex and the system couldn’t keep up with it.
“And because the system was built specifically for the client, they had to take ownership of and be responsible for it. So whenever there were changes to be made, they had to request the vendor to do it, which in turn causes lag and time loss.
These were the words of Mardiana Wati, our Head of HR & Payroll Outsourcing Services at CXL Group.
According to her, managing payroll efficiently is a matter of expertise, knowledge and experience; it would be risky to assign the job to an inexperienced staff or one who is not kept abreast with payroll regulations. This is an even bigger problem than say delayed or erroneous salary disbursements.
The risks of non-compliance are also equally punishing because companies can be fined for not keeping up to the statutory updates and changes. This is especially sensitive to large public listed companies when the fines can be pretty hefty.
So when faced with this kind of challenge, why then did the client choose CXL?
“We were able to answer most of their questions,” shared Mardiana adding that, “although I could answer most of them at the preliminary meetings, I also encountered some that required a bit more time to iron out at the implementation stage.”
Payroll Outsourcing 360°
I then asked Mardiana what were some of the reasons that contributed to CXL Group being awarded the project:
- 360° Expertise
- “This is based on our ability to answer the client’s difficult questions derived from their real life problems.”
- Conversant with Requirements & Expectations
- “We could understand the client’s requirements and also understand their expectations.”
- Industry Experience & Technical Expertise
- “Our answers demonstrated our expertise, knowledge, experience and our technical strength.”
- Rapport with Peer-Vendors in the Market
- “We were introduced to the client by their previous vendor.”
- Establishing Trust
- “Based on our experience, our clientele and the way we conveyed the possible solutions, this may have instilled the trust factor in the relationship.”
- Experience in Handling Payroll Clients
“Our clientele may have spoken volumes about what we can do for another payroll client.”
The Outsourcing Mandate
Mardiana, who comes with 18 years of solid payroll experience, reminded that when companies have a directive to outsource, the rationale rests on the cost effectiveness of assigning the responsibility entirely to the external vendor. This means the vendor must be superior in all aspects compared to the client’s internal team and at the same time be responsible for anything that could go wrong arising from that contractual relationship.
The critical components in question are like keeping tabs of the latest changes in the statutory requirements (eg. benefits, deadlines, exemptions etc.), best practices, landmark cases, precedents, just to name a few. As such, the onus is on the payroll outsourcing vendors to always be fully acquainted with the regulatory standards at any time of the season.
On the client side, it is imperative that the lead of the payroll division or the overall HR department like a Chief HR Officer must be adept and strong in his or her grasp of the practice. This will then pave the way for a smoother implementation regardless of the kind of system they adopt or the vendor they appoint.
Aside from ensuring HR compliance, a strong CHRO will also be instrumental in driving a transformation process. This is most relevant in the post-Covid-19 era with more and more transformation projects taking place, starting with digitalisations, to survive past the pandemic years. This includes converting manual processes like claims submissions, timesheet recordings and also timestamping the actual working hours instead of manual recordings.
“Yes, calculating working hours alone was a hot topic for the reluctant staff who were used to recording and signing off manually,” disclosed Mardiana. “But to be fair, we’ve also seen top managers being uncooperative because they were used to signing printed documents.”
The arduous process of having gone through more than one calendar year without anything to show had forced the client to look elsewhere. But on the same token, this also raised the client’s anxiety on whether they had to go through the hassle all over again with their newly appointed vendor. This doubtful sentiment was not something we could dispel immediately but with faith in our tried and tested model, and supported by our well experienced and knowledgeable team led by Mardiana, “Insyallah we could pull through on time.”
Since then, our badge of honour in payroll outsourcing now sounds something like this:
“Awarded in late-January/early-February by global beverage MNC with upwards of 600 payroll records, then lockdown was announced in March, we went live in June the same year.”
Explore how CXL Group can transform your payroll operations. Reach out now!
