Currently, Workday cannot be used to process Asia payroll. Workday payroll currently only covers the US, UK, Canada, and France. This means that Workday users in other locations must integrate Workday with a payroll services company or local payroll software.
With Asia being an increasingly important market and many businesses expanding operations into the region, an increasing number of businesses are interested in how the integration works as this information isn’t often communicated by headquarters!
How Does Workday Work?
Workday HCM is designed to centralise all of your HR functionality in one system by pulling information from other specialist HR software and vendors. By combining different specialised HR software it is recognised as a more flexible and effective way (compared to an all-in-one HR software) to meet the different HR challenges businesses face.
What Are the Options When Integrating Asia Payroll with Workday?
Workday users usually choose one of the following two options when integrating with Asia payroll:
- Use a Payroll Outsourcing Services Company; or
- Buy a Local Payroll Systems and Building Workday Integrations In-House
Workday implementation consultants regularly recommend using a payroll services company due to the specialist technical knowledge needed to build a payroll integration in-house. In addition to the usual benefits of outsourcing payroll, businesses will also be able to leverage their existing experience building Workday integrations and cover multiple countries with one payroll system.
How Do Payroll Providers Integrate with Workday?
Workday markets their payroll integration as Cloud Connect for Third Party Payroll (TPP) and encourages users to develop a payroll integration that matches their Workday environment using Workday tools to ensure a simpler integration build. Clients using Workday will typically use one of the following options for integrating Workday with their Asia payroll:
1. Point to Point Integration
Point to Point integration is a fully automated integration where information flows from Workday into the payroll company’s payroll system via a ‘Payroll Effective Change Interface’ file (PECI file). This means whenever a Workday user makes a change in Workday that will impact a payroll calculation (e.g. a salary increment, termination), this information will be sent from Workday in the PECI file to the payroll company’s payroll system when they calculate payroll.
- Efficient: Payroll processing is automated and staff no longer need to provide monthly payroll variance information to the payroll services company in a specific format each month
- Accurate: Information comes directly from a single source of truth meaning more accurate payroll without human error, a faster payroll process means that payroll processing is based on close to live data
How is it Developed and What Are the Costs?
Under this option, the payroll services company will assist the client to build the PECI file to contain the correct data and maps the data in the PECI file to the payroll services company’s payroll systems. Alternatively, the client’s Workday implementation consultant can build the integration based on a payroll company’s specifications and the payroll company will test the integration.
Generally, a good payroll services vendor should be able to build an integration for 1 country in 1 – 3 months depending on the complexity. Costs of integration vary depending on several factors including the quantity of data being transferred (e.g. payment codes, number of employees), the number of countries, whether you need information to flow back into Workday (e.g. GL file and pay history).
When is Point to Point Integration Recommended?
As a general rule (unless under special circumstances), we generally recommend creating an automated integration if they have at least a 100 headcount in the relevant country. Building an integration takes a lot of time, with the benefits of integration only really starting to make sense when you have over 100 headcount.
2. Manual Import of PECI File
If you do not have a large enough headcount to justify building a point to point integration, the alternative is to generate a Workday PECI file to the payroll service provider who then manually imports the data from the PECI spreadsheet into their payroll system.
- Cost-Effective: This option is cheaper than developing a point to point integration in the short term. However, payroll services companies usually charge an extra service fee each month for the work involved with manual manipulation and import of information, making it more expensive in the long-term. This method will also not create the same efficiencies and accuracy benefits of the point to point integration.
Choosing the Right Payroll Service Provider in Asia
When selecting a payroll processing provider in Asia, it’s important to do your homework and ensure your payroll processing provider is future-proof. Outside of your usual due diligence questions, payroll specific questions you should ask include:
- Workday Integration – Can the payroll provider integrate with Workday? How long does it take them to complete an integration?
- Regional Footprint – What is the payroll outsourcing provider’s regional footprint? Are they able to support you in most of the countries in which you have employees?
- In-Country Support – Does the payroll outsourcing provider’s support sit in-country? Or is the support going to be offshored to cheaper locations, e.g. India or the Philippines?
- Data Hosting and Security – Where will the payroll data be hosted? How secure is the data? Is it GDPR compliant? Does the provider have the security accreditation, e.g. ISO27001?
Are you looking to integrate your payroll with Workday? Contact us now to learn how we can help transform your HR!
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Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, PEO/EOR Secondment, outplacement, recruitment and more! Contact us for more information on how we can help leverage your HR function.