Executive Summary

Multi-Country Payroll Outsourcing (MCPO), though slow to mature, is at long-last hitting its stride; receiving increased attention and acceptance around the world. Due to a variety of circumstances – economic growth, compliance variability & complexity, and rising service provider maturity, to name a few, progress is particularly pronounced in Asia Pacific, where MCPO growth is outpacing other regions by over 5-10%.

Although the MCPO value proposition is compelling and offers significant potential, buyer satisfaction in the Asia Pacific region, in particular, has recorded mixed results. On top of the complexities that all enterprises must address in implementing MCPO, organizations in the Asia Pacific region face some unique challenges including mismatched global models, inadequate up-front understanding of provider capabilities, a myopic focus on cost savings, insufficient governance, and a too-narrow focus on payroll alone. Together, these issues have resulted in suboptimal outcomes. This can and has resulted in wide-ranging internal and external consequences ranging from a dissatisfied employees to negative publicity.

Enterprises can achieve successful MCPO outcomes in Asia Pacific if they implement a high-level, considered, and strategic plan that incorporates benefits beyond cost savings; balance the MCPO model among global, regional, and local strategies, as well as ensure alignment between all these levels; and create seamless integration and alignment with broader human capital management systems including the primary ERP / HR Information System (HRIS) of enterprises as well as others such as time & attendance to ensure integrated service across countries and the entire HR spectrum.

In this report, we look at the maturation of MCPO – globally and within the Asia Pacific region – offering details regarding the circumstances driving growth and development. In particular, we look at:

• Why MCPO is at a tipping point in Asia Pacific and what it means for enterprises there
• Differences between single- and multi-country payroll strategies
• Challenges enterprises in Asia Pacific face in implementing MCPO
• Specific and detailed steps organizations in Asia Pacific can take to create successful MCPO outcomes