HR Technology Column

Vital International Affairs

Vital International Affairs | Human Resource Executive Online Sorry, nothing new to report from Iraq, Iran or Afghanistan, unless you need to pay employees in those countries. A UK company called Patersons is offering U.S. HR departments a different way to get their arms around global payroll.

Monday, March 9, 2009
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Expatriate corporate employees can be an ungrateful bunch. They're living in some wonderfully exotic places on the company's dime. They sometimes enjoy subsidies on living expenses that allow them to live like kings. Yet they still want to get paid their salaries! Imagine?! As do the local employees not enjoying such perks, of course.

This is no small challenge for the HR departments of multinational U.S. organizations. Language is the easiest part. Payroll rules and regulations vary wildly from country to country, even in less exotic locations in Europe where benefits are rolled into it. And then there's putting all that information together.

The ERP vendors have long tried to meet this challenge and boast loudly of how many country versions of payroll they offer. Last time I was told, Oracle offered 35 countries, but it could be up to 50 by now.

In creating its GlobalView human resource outsourcing product with partner SAP, ADP created or purchased payroll operations in more than 30 major countries around the world.

Now along comes a little company called Patersons with 178 employees, many working a stone's throw from England's Stonehenge, and offering outsourced payroll in a remarkable 160 countries!

And with the recent hiring of COO Pat Goepel, former president of Fidelity HR Services and a Ceridian senior executive for 11 years, Patersons is finally making a big push in the United States, backed by a $30-million venture round announced in December.

Understand, this is still very much David vs. Goliath. Founder and Group CEO Karen Paterson would die and go to heaven the moment HR people start saying, "ADP, Ceridian and Patersons," which is certainly her goal.

But the demand is there, as analyst Phil Fersht of AMR notes in a research report that "almost 90 percent of HRO engagements are now being centered on global payroll models." He has a good blog post on this and the other challenges of global administration.

Patersons is definitely David, with only 60 to 80 live customers after nine years and another 100 in various stages of signing. The company's own payroll software is used in just 15 countries, with the other 145 covered by local partners using their own software.

But despite those different platforms, Patersons seems to have mastered the global payroll trick of being able to aggregate data from every country with some pretty nifty software. Plus the payroll application itself can scale down for a client's two-person sales office in Tonga, as well as cover its 2,000-employee factory in Malaysia.

Its greatest testimonial may be IBM using Patersons in various multi-process HRO engagements around the world. The company maintains service centers in the United States, UK, Singapore, China and France.

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Patersons offers everything as SaaS (Software as a Service). Its payroll services range from single-process HRO (becoming your payroll department with its multi-language call centers) to simply providing and maintaining the software for you to use.

Its sweet spot is companies with 5,000 to 20,000 employees in at least three countries. Companies above 30,000, it leaves to partners IBM and Convergys. Below 1,000, resellers such as accountancy BDO Seidman.

It also has an integrated HRMS, as mature as its payroll application, and running on the same SaaS platform. While Goepel maintains it has functionality equal to the ERPs, I remain skeptical until I see it. Historically, HR systems that have come out of payroll systems have not been the best. But Patersons clients are generally using both. So Workday is not alone in offering a SaaS HRMS.


Right now, Patersons is offering its HRMS free to new customers who buy international payroll. It's the kind of market-share-building gimmick that could work. We'll have to see.

HR Technology Columnist Bill Kutik is co-chairman of the 12th Annual HR Technology Conference & Exposition ® in Chicago, two weeks earlier than usual this year, on Sept. 30 to Oct. 2. He is also host of The Bill Kutik Radio Show sm. He can be reached at .

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