Safeguarding HR and payroll continuity and compliance

When Royal Philips divested its lighting business in 2016, it effectively created a brand-new global business. Having been part of a long-established international operation, the new company – known as Signify since 2018 – needed to establish its own administrative structures and processes for around 38,000 employees in more than 70 countries worldwide. Among these, one of the biggest challenges was ensuring the proper handling of HR and payroll across the newly created business.

Signify’s larger offices inherited the outsourced payroll processing contracts it had in place when it was part of Philips, backed up with in-house HR admin teams. However, for the scores of medium-sized and smaller Signify offices around the world, the transition was significantly more complex. These offices had a patchwork of outsourced payroll provision arrangements, with little or no in-house HR expertise available in most locations. Consistency was a challenge, and the company had even suffered from a local payroll partner closing without warning, leaving it entirely without support in that country.

Not only was this inefficient, it also represented a significant business risk, as Signify’s Head of HR Services, Martijn Voermans explains: “We had a rather scattered model for delivery of payroll in countries where we have a limited number of employees. Our key challenge was to safeguard compliance and continuity, ideally with a single service delivery model for our internal customers.”

Signify needed a partner that could ensure continuity by delivering efficient, accurate and timely payroll services around the globe, and could also handle the complexity of ensuring pre-payroll HR admin was in place. Moreover, this had to be compliant with the widely varying employment rules and regulations in many locations around the world.

Having investigated the market for outsourced payroll and HR admin providers, Signify chose to work with TMF Group. “There are very few providers who can deliver integrated HR and payroll services with the combined global scope and reach, implementation and execution capability, and reliability of TMF Group,” says Martijn Voermans.

TMF Group now delivers payroll services for Signify in 46 countries, along with HR admin services in most of these locations, as well as accounting services in eight countries. It is also rolling out its TMF Horizon middleware, which will give Signify a complete overview of payroll delivery performance across all of its operations – including employee satisfaction.

Signify now relies on TMF Group to deliver complete employee administration in these countries – from hire to retire – dealing with everything from ensuring it has the right legal contract frameworks in place, through to compliance with local time and attendance rules and regulations, and handling local payroll-related queries and error reports.

“We have been able to rationalise our in-house resources, and focus on delivering strategic value rather than dealing with operational hygiene factors,” says Martijn Voermans. “This has allowed us to implement a single-source solution with a balanced business case across all our small and medium-sized offices.

“By bundling payroll and HR admin together in one service contract, we benefit from improved accuracy and coordination. I and my team only have a single point of contact to go to if there are any issues, and we know we will have the appropriate management attention given to us. With TMF Group on board, we are able to trust that every office has a solid team in place for payroll, whether it employs one person or one hundred.

“We have a well-structured global team managing our services in TMF Group, with clear lines of responsibility and communication at every level; from high-level global strategic direction down to local day-to-day operational issues.”

With TMF Group on board, we are able to trust that every office has a solid team in place for HR and payroll, whether it employs one person or one hundred.

Signify (Euronext: LIGHT) is the world leader in lighting for professionals and consumers, and lighting for the Internet of Things. Its Philips products, Interact connected lighting systems and data-enabled services, deliver business value and transform life in homes, buildings and public spaces. With 2020 sales of €6.5 billion, it has approximately 38,000 employees, and is present in over 70 countries. The company achieved carbon neutrality in 2020, and has been in the Dow Jones Sustainability World Index for four consecutive years since its 2016 IPO.

• Number one in conventional lighting, LED and connected lighting
• 86 million-plus connected light points
• €6.5 billion sales in 2020
• Around 38,000 employees
• Present in over 70 countries
• 100% carbon-neutral global operations.

Services provided by TMF Group: Payroll, HR administration, accounting

Jurisdictions covered: Algeria, Argentina, Austria, Bangladesh, Bulgaria, Chile, Colombia, Croatia, Czech Republic, Denmark, Egypt, Estonia, Finland, Greece, Indonesia, Ireland, Israel, Kazakhstan, Latvia, Lebanon, Lithuania, Luxembourg, Morocco, Norway, Oman, Pakistan, Panama, Peru, Philippines, Portugal, Qatar, Romania, Serbia, Slovakia, Slovenia, South Africa, South Korea, Sri Lanka, Sweden, Switzerland, Tunisia, Turkey, UAE, Ukraine, Uruguay and Vietnam.

Employees served by TMF Group: More than 1,300