The Complexities of Payroll With Eynat Guez

My guest today is Papaya Global CEO Eynat Guez. Papaya is a unicorn company that Eynat co-founded after realizing the technology gaps in global payroll. The company combines her passions for technology and global HR while reinventing global workforce management for the modern age. In this conversation, Eynat and I talk about her career, Papaya’s innovative software, the landscape of payroll and what it truly means to run payroll in your organization.

Eynat didn’t always envision such a career. “I didn’t think when I’ve been asked, ‘What do you want to be as a grownup?’ I said, ‘I want to solve the payroll problem of the world.’ No, that definitely was not the answer. I think that, as with a lot of things in life, I’ve been accidentally dragged into it,” Eynat shares.

Eynat had her first glimpse into payroll and management after creating Relocation Source, which specialized in relocation management. She helped a small company relocate its team to China during that period. Eynat realized that the real challenge wasn’t the move but understanding how to employ and pay people.

Fascinated by that challenge, she started Expert Source, which focused on global employment and making the process easier for managers. “This is where I fell in love with this job. I think that eventually when you are learning a lot about payroll, you also understand the macro trends and micro trends in the world,” Eynat says. “You can see them and how they are reflected in payroll in a lot of global changes.”

Punk Rock HR is proudly underwritten by The Starr Conspiracy. The Starr Conspiracy is a B2B marketing agency for innovative brands creating the future of workplace solutions. For more information, head over to thestarrconspiracy.com.

The State of Payroll Today

When most people look at payroll, they automatically assume it falls under HR. That’s not totally wrong — HR does deal with payroll-related issues and is responsible for having the correct information on employees so they can get paid. However, Enyat considers payroll to be, at its core, a finance process involving financial technology.

“Payroll is not about somebody doing a job and getting paid by the employer. It’s about an employer paying an employee,” Eynat explains. Payroll is a complex process that has become even more complex in the wake of the COVID-19 pandemic.

“The level of complexity in payroll during COVID increased probably in about 50% to 70% in the world,” Eynat says. The lack of efficiency has driven companies, including Papaya, to develop and elevate their technology to handle the complexities of payroll and make the process seamless.

Moving from Excel to Modern, Flexible Technology

Payroll has to become more efficient, starting with a better use of technology. In Eynat’s experience, many companies still use Excel sheets and general ledgers to manage payroll, which is unsustainable globally.

Payroll “is currently so chaotic that, on average, we see between 20 to 30 different providers of payrolls and data streams to an organization. So there are definitely Excel sheets involved,” Eynat says.

Many software providers claim to be a one-stop shop for managing payroll, records and other employee data. But Eynat and her team want to be more than a one-size-fits-all approach.

“From our perspective, we need to create flexibility,” she says. “We need to create an environment of customization because the problem with payroll and the problem with personal data is that they have a lot of layers.”

Papaya is focused on helping companies find a sustainable way that allows them to manage payroll efficiently. “I think that the secret is not looking at it as a solution that eventually the client needs to adapt, but as flexible infrastructures that can adapt to the client’s needs,” Eynat says.

[bctt tweet=”‘Payroll is not about somebody doing a job and getting paid by the employer. It’s about an employer paying an employee,’ says @EynatGuez, co-founder and CEO at @Papaya_Global. Tune in to the latest episode of #PunkRockHR!” via=”no”]

People in This Episode

Eynat Guez: LinkedIn, Twitter, Papaya Global website, Eynat’s writing at Papaya, Eynat’s writing at Medium

Full Transcript

Laurie Ruettimann:

This episode of Punk Rock HR is sponsored by The Starr Conspiracy. The Starr Conspiracy is the B2B marketing agency for innovative brands creating the future of workplace solutions. For more information, head on over to thestarrconspiracy.com.

Hey everybody. I’m Laurie Ruettimann. Welcome back to Punk Rock HR. My guest today is Eynat Guez. She’s the founder and CEO of Papaya Global. Papaya is a unicorn company, and it was co-founded by Eynat after she saw the technology gap in global payroll. The company combines her twin passions — technology and global HR — to reinvent global workforce management for the modern age.

What I love about today’s conversation is that we talk about Papaya’s innovative software, but we also talk about the landscape of payroll and what it truly means to run payroll in your organization. So if you’re interested in what’s new and next in the world of paying people, and how to keep the data safe, and how to make sure you’re compliant with all of the changing regulations across the world, sit back and enjoy this conversation with Eynat Guez on this week’s Punk Rock HR.

Hey, Eynat. Welcome to the podcast.

Eynat Guez:

Hi. Thanks for having me.

Laurie Ruettimann:

Well, sure. Before we get started, would you please do us the honor of telling everybody who you are and what you’re all about?

Eynat Guez:

Sure. So I’m Eynat. 42 years old, the mother of three great kids and a founder and the CEO of a company called Papaya Global. We are a global workforce management platform, doing everything on the global payroll and global payment side for multinational organizations.

Laurie Ruettimann:

Well, a lot of people don’t think payroll is very sexy, but you are the CEO of a unicorn company. That’s correct, yes.

Eynat Guez:

Yeah, that’s correct. And I’m the first to say that this is not sexy. It’s a very, very boring industry. It’s a very compliant industry. It’s not a cool industry, but it’s the fundamental of every business. Payroll is the biggest expense, biggest liability and, eventually, the biggest commitment that you have towards your employees. So this is what we are here to solve.

Laurie Ruettimann:

Well, these are important issues. They’re the backbone, the infrastructure of the workforce, of organizations. Can you tell me where payroll is and where it stands at the end of 2022. What’s the industry like?

Eynat Guez:

So I always say that, unfortunately, there are two things in life that are not getting more efficient and it’s payroll and airport lines because they’re both being led by governments. And we need to be completely honest: Payroll is not about somebody doing a job and getting paid by the employer. It’s about employer paying an employee — and having said that, during the payroll cycle, needs to facilitate quite a lot of processes to the government, ask them to facilitate. Because, in reality, nothing that you are doing on the payroll side, aside from paying the actual payment that you set with the employees is related to the company. Taxes, deductions, benefits, health plans, and so on.

So, unfortunately, I was a bit more optimistic when we started. I thought that government will take it as a personal goal to make payroll simpler, and COVID completely changed us. So COVID actually made things much more complicated because government wanted to protect employees better. They wanted to assure that they have access to better services, Social Security, severance payment and so on. So the level of complexity in payroll during COVID increased probably in about 50% to 70% in the world. Which is crazy if you think about it, because this is a recurring business, recurring process that you need to do with every single employee on an ongoing basis. And it’s just the time for that increase in increase.

And this is why I said it’s very similar to airport lines, which we all start seeing very long airport lines after COVID. And we couldn’t understand why, but this is the same reason. Because the amount of tasks that are needed currently to perform on every single passenger just increased. I mean, checking your COVID certificates and so on. And it’s the same symptoms of outsourcing government tasks to others. So where we are in payroll in 2022: Quite a lot of complexity, a lot of legislation that is just piling up and from our side, a lot of investment in technology and efficiency and assuring that we can take all of those complexity and make it seamless as possible to our clients and, eventually, globally.

Laurie Ruettimann:

One of the interesting things about the payroll industry is that it’s both HR tech and fintech. It straddles the line between the traditional HR department and the CFO. There are so many constituencies just within a business that are involved in that. Do you see payroll more aligned with HR tech or more aligned with fintech?

Eynat Guez:

It’s a great question. Definitely fintech.

Laurie Ruettimann:

Yeah, you think so. Why is that?

Eynat Guez:

The employees aligned with HR, but if everything goes smoothly, this is a pure finance process. If you have problems, that’s going back to the HR because you have unhappy employees, and then HR staffs in. But the complexity, the payment, collecting the data, eventually processing it, that’s a pure finance process. So HR is responsible for bringing the employee in and to set the fundamentals, I mean, signing him on the contract. But once he’s been onboarded to the organization, that’s a pure finance process.

Laurie Ruettimann:

Is this true in all countries? Because Papaya is global. So I think here in the United States, HR just wants to have ownership of payroll, and they would argue that it’s still fundamentally an HR process. But I can see how in other countries where there’s even more complex regulations, more constituencies, it may be more financially driven. But I think the average HR lady here in the United States would say, “No, no, payroll is mine.” I don’t know. What do you think about that?

Eynat Guez:

So I think it’s changing, honestly, because it’s becoming so complex, as we said before, that nobody wants to have this liability. Payroll is mine, but then you need to spend 5, 10, 20 hours a month just to check legislation. Just to check individuals’ data and so on. So nobody really wants it. And if you’re looking at growing organizations, payroll manager is becoming a profession. And I think that this is a profession that unfortunately it’s very hard to learn. So you don’t have almost any formal certification, currently — processes for payroll managers. You have for content, you have for other jobs in the organization, but payroll is kind of in between. And it creates actually a lot of problems because it’s a very, very big need.

One of the great people that works at Papaya always said that every company needs to have a chief payroll officer because honestly, this is the most important role in the organization. I agree with him that payroll eventually has his own kind of form. So you need to assure that payroll is being done correctly. It’s a full-time job. So I mean, if you’re looking on that, when you have payroll managers in the organization, they always sit with the finance, not with the HR.

Laurie Ruettimann:

Well, that certainly makes sense to me. I love this idea of a chief payroll officer. It’s so funny though, whenever I talk to anybody with any specialties, they’re like, “We need a chief employee experience officer. We need a chief process management officer.” But chief payroll officer is fascinating, and I just wonder, what are the skills that would be required to do that job?

Eynat Guez:

Okay. Now we are talking. First, I think this should be a very analytical person because, in reality, the problem in payroll is that every individual has different aspects of data that is streamlined to the payroll on a monthly basis. You took a day off. You took maternity leave. You are off for other occasions and so on. Variables, items, expenses, and so on. And everything has its own complexity. So you need to have the ability to manage this data at scale and have a very analytical approach of how do you manage this process structure.

The main issue with payroll is that you always create a bottleneck. I mean, pay date is the same for everyone in the country. So it’s not that you can spread the world around the month. You always have this bottleneck. Along with your analytical skills, you also need to have a very strong people skills because, in reality — and this is the future chief payroll for me — this is the person that is able to take mainly the younger generation, I would say younger employees, and explain them how they can transform their payroll into better financial decisions. How they can create more savings, what taxes are, what benefits are and so on.

And eventually educate them quite a lot about those things, bring a better benefits plan to the organization, bring better ways to utilize buying power that the organization has towards the employees and the payroll. So for me, payroll can become a main source of benefits in the organization and actually can define quite interesting relationships between employee and employer and retention level.

Laurie Ruettimann:

Well, that’s really interesting to me because I wouldn’t have thought of a chief payroll officer even conceptually being someone who can really leverage an organization’s buying power for better benefits — or leverage an organization’s financial literacy programs and really get higher utilization rates. But what we’re talking about is optimization, optimization of this process. And I just wonder, do you see that as a trend? Is this happening anywhere among your clients?

Eynat Guez:

So, yes and no. I think that the first thing that we see as a trend is the need to have a dedicated person to payroll. This is not a part-time job of someone. And also the need to have better tools, because I always say that if you have 100 people in the organization, you can still manage your payroll cycle with an Excel sheet. If you have 1,000 people — I mean, you can, but you are going to have quite a lot of stress involved. If you have 5,000 people, you need a better process to automate this. It’s impossible to do it just on a manual side of things.

So we do see the need for understanding payroll strategy and for understanding payroll technologies. I think that payroll technology is actually new and in the rise currently. We are very proud to be part of this industry and to lead technology and innovation in payroll. We are investing a lot because, to your question before, we see a payroll platform that needs to be accurate and eventually be measured on the same KPI as a financial system. We want to ensure that when you are logging into the apparel system, you get the feeling that you logged into your bank account, not to the HR system. So this is really what is driving currently the needs in organizations and also the people and what organizations are looking for.

Laurie Ruettimann:

As you were talking, I was thinking about how payroll is often assumed to be a technology, a platform, but I wonder if you have any statistics around how many people are using Excel spreadsheets and how many organizations actually have a payroll system. Do you have any data on that? I would imagine that more people that we suspect are probably just managing it in a general ledger or Excel. I don’t know. What’s the data around all this?

Eynat Guez:

Yeah, you are not far from the reality. Let’s say the following: I’ve never met yet an organization that is 100% managing their payroll on a software — aside from Papaya, because we use our own product, so it’s easier for us. But in reality, the payroll mainly when you’re working globally, currently the environment is so chaotic that on the average we see between 20 to 30 different providers of payrolls and data streams to an organization. So there are definitely Excel sheets involved. There is currently a very big problem and kind of data breaks between different systems. So the data flow between ATM to payroll to ERP is not good enough because you have a lot of value that are missing, a lot of data that needs to be collected manually. And eventually, yes, there is always these Excel sheets along the way that somebody is collecting and validating and importing in and exporting out and so on.

Laurie Ruettimann:

Oh my goodness, what a nightmare. Well, I think about how there are so many different providers out there who are trying to be that single unification source or sell people, even if that’s not true. They claim to be that single source between the employee record and payroll and your performance management system and your manufacturing system and all of this. They claim to be that. Does that exist, and is that Papaya?

Eynat Guez:

So Papaya is trying to be very focused and global — because the global has different challenges. If you are trying to be one tool to serve all on one territory, that might be possible. Having said that, I think that if you ask people in general, even in the U.S., what do they think about their payroll experience? The majority of them will tell you that it’s not great. So from our perspective, we need to create the flexibility. We need to create an environment of customization because the problem with payroll and the problem with personal data that you have a lot of layers.

I mean, if I’m trying to create a solution, one fits all, that’s probably going to be a very limited solution that will require quite a lot of adaptation. What we are looking at is just creating an infrastructure that actually can adapt to everything that you have in your organizations. Because you can have people working in shifts, you can have unions, you can have variable items, you can have equity that you want to process. You can have non-taxable benefits. You can have so many different payroll items that need to go and be processed that really create a very complex environment. So I think that the secret to that is not looking at a solution that eventually the client needs to adapt, but as flexible infrastructures that can adapt to the client need.

Laurie Ruettimann:

As you were talking, I started to think about all the employee data that you are collecting, as well as company data, and the issues around security and being hacked, which are very real. And just a year ago we had a major hack happen over at Kronos. I wonder, can you talk to me a little bit about security and the need to stay on top of the cybersecurity industry to make sure employee data and company data is protected?

Eynat Guez:

A lot of time. I mean, people are surprised to hear that our second buyer currently is actually the chief security officer in the organization and not the CFO and not the HR because, eventually — payroll or payroll data is the most sensitive data to the organization. And illegal use of data can create a huge damage to the individual, to the organization. There are tons of, obviously, risks that are involved here. So we are investing a lot. I mean, we have a full team in house. We’re investing a lot in assuring that we are meeting all of the privacy requirements, that we are meeting all of security requirements. And it’s a never-ending job. It is what it is in technology. This is why we always say that we are first and foremost a technology company. 50% of our team will always be technology because you cannot just build technology or build a product and leave it as is.

With today’s risks on the cyber side and privacy side, that’s a constant working process that you constantly need to develop and maintain. And yeah, I mean, that’s part of the challenges, and this is why we believe that eventually payroll infrastructures are very important to the organization. I always say that, from my perspective, having strong payroll infrastructures is even more important than having strong IT infrastructures because if your email is down, that’s not a significant event as your not being able to pay people on time, as you mentioned last year’s [Kronos] event.

Laurie Ruettimann:

Yeah. I think if the email is down for the day, employees are generally happy. Same thing with chat. If their payroll is down for a day, that is a nightmare. Absolutely. I just wonder what it’s like to sell to a chief security officer. Because I know the profile of a chief HR officer, a CFO, but what’s a modern chief security officer? What are their concerns?

Eynat Guez:

So their main concern is basically about understanding how — first I think that this is a very non-rewarding job. I mean, if you get 99% of the data correct, and you have one mistake in individual payroll, it’s being escalated directly to the CEO. Everybody goes and blames you — why you had mistakes in this individual payroll because, for him, you were 100% wrong. So first, hug your payroll manager, your chief payroll officer, they’re working very hard.

Honestly, this is one of the most non-rewarding jobs in the organization. And I truly admire people that are doing it cycle over cycle. Although they know that, they know that they will always get the blame when things are currently failing. And things can happen, I mean, for various reasons.

But I think that having the ability to create very good monitoring, understanding how do you attract discrepancies. How do you attract compliance? I mean, you don’t want to miss pension funds of someone. You don’t want to miss any single kind of payment that needs to be deducted. That can create quite a lot of damage or challenges to an individual level. Having able to consolidate data very well, if you’re not using sophisticated tools. So I think that eventually being able to have a data center or BI center, or a tool like Papaya, where you can cut and extract data and understand the total picture.

I think that in reality, if you have a good chief payroll officer or a payroll manager in the organization, as a CEO, you are able to get very quick decisions on a real-time basis. And this is actually one of the most valuable data sources that you need to develop in the organization.

Laurie Ruettimann:

Well, as I think about your journey to be the founder and CEO of a unicorn company, a company with over a billion dollar’s valuation, I just wonder why you do what you do. How did you come to find that this is the thing that you were meant to do at this phase of your life? Why are you here? What was it about this job and this industry that made you say, “Yeah. I want to tackle this problem”?

Eynat Guez:

Yeah. So I have to be completely honest, I didn’t think — when I’ve been asked, “What do you want to be as a grownup?” I said, “I want to solve the payroll problem of the world.” No, that definitely was not the answer. I think that, as a lot of things in life, I’ve been accidentally dragged into that. My first job was as a company that did holding projects in Africa, and I was fascinated by taxation and relocation and mobility and how do you get it worthwhile to relocate people from the U.S. or from around the world to developing countries? How do you create those incentives, but also how do you balance taxes and everything that they need to know to do because it’s a very complex process.

And then from here to there, I started my journey in this world. I started with a relocation into a global mobility company, and then just by accident, a small company at the time called Waste, asked my help to settle their team in China.

And I said, “What’s going on in China? I’ve never been in this part of the world.” And I was fascinated by China, and I was even more fascinated by, at the time, the race of Western countries to China and to start developing businesses there. So this is where I started understanding their challenges. And it was not on the relocation side any longer. It was actually on the fundamental side of, “How do I employ people here? How do I pay them?” I don’t know if you ever saw compliance and legislation or payslip in China, but that can be a scary experience. Quite a lot of line items.

So this is where I started actually my second company, and it was all about global employment, and how do we make it happen? And I found it fascinating. Just the ability to tackle an immediate problem that a company has and to find a solution for them and to be an enabler for their global growth. And this is where I fell in love with this job. I think that, eventually, when you are learning a lot about payroll, you also understand that a lot of macro trends and micro trends in the world that actually you can see them and are reflected on payroll on quite a lot of global changes and so on. So I like it.

Laurie Ruettimann:

I’m fascinated by your global experience and particularly about your profile because you’re 42 years old, you’re like a Xennial, you’re in between generations. You’re not quite Gen X, you’re not quite a millennial. And you mentioned that you’re a mother of children. So what do you see in the workforce around generations and the changing nature of the demands of work with your unique perspective?

Eynat Guez:

That’s a good question. I think that, starting 2020, I think that the mixed messaging around us confused everyone. And I think that we started this decade with messaging of, you can choose wherever you want to work, how many hours a day you want to work, where from you want to work, everybody needs your skills, you are in high demand and so on. And we are here currently in the end of 2022 with quite increasing unemployment trade, with quite a lot of layoffs happening around us. And with completely different messaging: Stick to your chair, come to work, assure that you are bringing value. And I think honestly that this is bringing people from one side to another, and it’s very hard for them to understand what’s going on. And mainly for the younger generation, I think for them, definitely they want to see quicker outcome at a job.

You said that I’m an in-between generation. I think that the one thing that I always say that I used to be a professional swimmer when I was a child. And I think that everybody that did professional sport has this understanding and the small memory, how we invested hours of our time just to improve milliseconds in our personal record. And this is very, very different from what you see currently in the world of work. I mean, people are not investing hours of their time just to do things correctly or to get to the level of excellence that you want them to achieve.

So I think first that, I mean if I’m looking on the global world, work from anywhere is a dying trend. I mean, I’m sorry to be the person that is spoiling some people’s dreams, but I think it’s very hard to manage an organization when you have people around the world in different time zones, different locations, and they’re not meeting each other, they’re not working as a team and so on. We see more and more the shift to global hubs, which, I think, this is a great trend. So if you want to work at a company, and they have 10 different hubs, you can choose where do you want to work from, but you still need to come in the morning to an office that belongs to the company. You still see your colleagues from the same organization, which is very healthy.

I was very worried in the beginning of this decade about statements like, “We won’t see any employees ever again. We’re all going to work remotely.” I think that we don’t value enough the human interaction, the collaboration aspect of things and how we learn from each other just by seeing them around us. I mean, you cannot learn from someone when he’s training you over Zoom or remotely. So I think there are a lot of trends that are currently going from one direction to another. Probably going to find the midway between those. And it’s definitely an interesting decade. It doesn’t seem that we are at the end of the interesting times.

Laurie Ruettimann:

No, no. I mean it is a blessing and a curse to be where we are today, that’s for sure. I mean, it is challenging for many. I’m so grateful that you spent a little bit of time with us today talking about payroll and trends and your own perspective. If people want to learn more about you, Eynat, where should they go?

Eynat Guez:

Well, it depends what they want to learn. So you mentioned before, I maintain a blog. I have a few blog posts on Medium and our website speaking about my personal experience as a founder and a mother of very young children and combining my motherhood and my entrepreneurship journey together. So I try to share the challenges and to speak very openly about things because I think that this is very important. At Twitter, if you want to follow me there. So that’s also an option. And obviously, I mean I have quite a lot of professional blogs and so on in the Papaya Global website and around LinkedIn. So I’m all over the place, I think.

Laurie Ruettimann:

Well, I love it. We will make sure to include all of those links in the show notes. And thanks again for being a guest today.

Eynat Guez:

Thank you. I really enjoyed it.

Laurie Ruettimann:

Hey everybody. I hope you enjoyed this episode of Punk Rock HR. We are proudly underwritten by The Starr Conspiracy. The Starr Conspiracy is the B2B marketing agency for innovative brands creating the future of workplace solutions. For more information, head on over to thestarrconspiracy.com. Punk Rock HR is produced and edited by Rep Cap with special help from Michael Thibodeaux and Devon McGrath. For more information, show notes, links and resources, head on over to punkrockhr.com. Now, that’s all for today and I hope you enjoyed it. We’ll see you next time on Punk Rock HR.