The State of European HR & Payroll with Special Guest Michael Custers

[00:00:08] Welcome everyone to another episode of the HR & Payroll 2.0 Podcast. I'm Pete Tiliakis and as always, I'm joined by the legendary Julie Fernandez. Welcome, Julie. Thanks, Pete. And I'm excited for a conversation that's been a long overdue today. Yeah, yeah. Another friend of the show, another executive that we both have worked with in the past that I admire, we admire. And I thought, you know, we've got to have him on. Look, European HR and payroll leaders are making decisions about technology services and how work gets done, all while navigating very different compliance demands across local markets.

[00:00:37] And so today, I thought, who better to welcome to the show, Julie, to talk about that. Again, friend of the show, James Gosney, the Chief Strategy Officer at SDWorks, to talk to us about what's going on over there. Welcome, Michael. Well, I just want to say thank you and it's great to reconnect. We were talking about this earlier. It's like connecting with old friends and it brings back a lot of memories. I know, it does. It does. We've said before the show started how much of a reunion this show has been for us and people we've reconnected with.

[00:01:02] And you're somebody that I've admired and worked with in multiple different cases back at NGA, then as an analyst at NGA as well. And then more recently at your time here at SDWorks, where I know you've kind of moved up through the C-suite there. You started as CMO, right? And then now Chief of Strategy? Yeah. And so I've been heading up all along, mostly the marketing function, but then more specifically M&A and strategy.

[00:01:26] So it's always been about growth, organic growth, inorganic growth, but always helping expand as it works across Europe. Any role touching the M&A at SDWorks, where you guys have just been prolific growers, right? By finding and bringing in different businesses, asked to keep you busy. It surely does. You guys stay in the news. It surely does. Anyway, all right, Michael, let's get into this here, man. I want to talk about your experience set. You've been on all sides of this game, this HR and payroll game.

[00:01:55] But what do you think has most shaped you to this moment for what you guys are doing at SDWorks? I want to get into some of that, what's going on in Europe and how you guys are responding to that. Well, at SDWorks, we started with a very simple thesis. We actually looked at the market and we were wondering why has no one ever consolidated the European market when it comes to payroll? Because we've all been struggling with global payroll, regional payroll. We've been going through waves of I want to do it native. I want to work through an aggregator. We're going to build an engine that can connect the entire world.

[00:02:22] We just started with the question, why has no one ever tackled all of Europe rather than doing a global plate? Why don't we look at the complexities of Europe? Everybody complains about the multiple languages and legal systems and cultures and different social security systems behind it. Why has no one ever really sung their teeth into this? And so this is what we started out with six, seven years ago. The company at the time had a little bit of an international foot.

[00:02:49] But not really a pure European place. So we really started to investigate and we came to the conclusion that buying market leaders all around us, out of Belgium where our headquarters are, is probably the best option. And so we started executing on that idea. And five years later, we have payroll engines in 20 countries across Europe, presence in 30 markets around Europe. And we basically covered the entirety of the continent with 10,000 people in 30 markets.

[00:03:19] You know, Michael, that's actually a really great, great segue into something I wanted to talk about a little bit later. But I love that you brought it up now. And Julie, I want your point of view on this, too, is like, I feel like now we're hearing a lot more about the local regional capabilities, more so than we are global capabilities from buyers. In other words, it seems to me that there is this emphasis on best in breed, and then bringing that back to a single point because of the abrasiveness and the aggressiveness

[00:03:44] of what it takes to process payroll and function as an HR operation in some of these countries, and many of these countries, especially when you're on in multiple. But how is that bubbling up into your thesis and what you're hearing in the market just from that local demand, regional demand rise in terms of how valuable it is now? It's a question you could tackle on through multiple angles, right? But I think the key of it is that payroll is always local at the core. Why? People speak a language. They're part of a culture.

[00:04:13] They have a certain financial background. They're embedded into a social security system. They have a certain idea about how to build a pension or a career plan. So all of these things you have to take into account before you really start doing payroll. On the other end of it is typically an employer who loves to have a nice little overview of all the things and of all the payrolls and geographies and different segments and parts of business that he or she can control.

[00:04:40] So those things are sitting at opposing ends, and they're a little bit fighting because on the one hand, you need deep localization and specificity. And then on the other hand, you want standardization, overview, compliance. And so what we basically try to do is to bring those two together. But at the same time, we want to preserve that local flavor and then make sure that at the top end, at the corporate level, you can bring all those elements together.

[00:05:06] But you don't necessarily need the tiniest bit of information from in payroll in Andorra or Spain. You don't need that to flow through. It needs to be delivered right at the local ends. And then let's say 70, 80% of that information needs to flow through to the headquarters. So it's a constant balancing act between what you need to do locally and what needs to flow through onto the global or the corporate level where you want to have an overview in order to get financial reporting right,

[00:05:36] in order to get your headcount reporting right. So that is basically what we're doing all the time. The key thing is that that employee, that worker, is still super confident and can still wrestle through all the local complexity of payroll and at the end of the month have the confidence of just seeing a salary slip in his app and seeing money arrive in his account. The fact of the matter is there's like 57 flavors of how you could make that balance, right?

[00:06:05] And the nuances really escape a lot of times the clients because they can be subtle or they can be very big. And, you know, you can put the story together in multiple ways. What I think is interesting is strategically for 20 plus years, leaders have been dreamers. And they've said, I just want one global payroll. And global payroll kind of implies that everything goes in one place and in one direction. It's all harmonized, right?

[00:06:32] And really, that's not ever almost been the case. I mean, you can force it, but it's really one global payroll strategy, which oftentimes has these regional and local components and big company, small company, region by region. I mean, there's these dynamics that affect the commercials, the operation, the way you operationalize it. And so I feel like if it's becoming more the talk of the talents, because maybe after 20 years, folks are starting to realize that, you know, there's no such thing as global payroll.

[00:06:59] That mantra that you would hear all the time is there is a strategy, but it doesn't always mean one system, one database, one tool, one whatever. And that means more regional and local talk, right? Exactly. And it's basically one value chain, right? It needs to flow. There's a need for a single flow, but it doesn't necessarily mean it needs to sit all in a single database or all in a single reporting system or in one HRS. If you can do it, it's wonderful.

[00:07:29] But the reality of the business is it also depends on the makeup of the business. Some businesses have a big headquarters and a presence with sales offices across 100 countries. Other businesses are just present with equal employee sizes and employee populations in three or four geographies. All these things are part of that equation, right? And so building that right mix, that right value chain, so that the information flows from headquarter all the way to the worker and back is really what matters.

[00:07:58] And not every flow is right for every business. So it's a matter of tuning it really for the business that you're working with. It can be defined by vertical requirements. A lot of scheduling in retail can be defined by the type of business you're in. So all these things matter when you basically build a solution. And the more options you can offer to a customer, the better you can basically build that flow. I agree. You know, the other thing, too, I think that's happening, too, with businesses,

[00:08:26] it feels like there's like a fluidity that's happening across in various different flows, I guess you could say, if that's an analogy, across these businesses where there's just so many dynamics now. It's like it's always been really hard to transform payroll at scale. And it seems like you still have to do it in pieces and parts, but it's getting it feels like that's getting even harder now. Is that a good analogy? It works really well. So I want to hone in on that word fluidity. So that really is what's happening right now.

[00:08:53] We live in a very fluid world, and it means that everything is moving all the time. And so your capacity shouldn't be to grasp the complexity of the world and freeze it in that moment and then for it to persist. No, you should build a system or a solution that is constantly adaptable. So it's like you're dialing it up and down and working on it through.

[00:09:18] It makes me sometimes think, you know, these 70s synthesizers, these massive machines with a thousand different dials and knobs on them. It's a little bit like that. And where you basically dial things up and you're tweaking and tuning them all the time until you reach perfection. And you will never reach it. But you adapt yourself to the situation because there's always a lawmaker or a legislator who comes up with a smart idea to raise a tax there or do a deduction there.

[00:09:46] And, you know, we elect lawyers in all of our parliaments everywhere around the world. And what do lawyers do? They make laws. And so there's going to be this constant flux of compliance requirements and legislation, collective labor agreements, and things that the unions want. And so it's much better to build a system that's made for resilience and for adaptability and, to your point, fluidity than for anything else.

[00:10:11] And a lot of times you see people wanting to design this perfect world and put it on a painting. And I say, let's now, you know, now we freeze it, we never touch it again. And that's not, that's not, it's beautiful, but it's not made for the real world. Well, we're just sketching in and it takes you three years to add all the colors. Make it come to life, right? You know what you do with a painting, right? You put it in a museum, you never touch it and you admire it. But the real world is not a museum. No.

[00:10:42] That's true. It can't, it's not, it's so fluid and there's no stat and there's no destination now, like you're saying. I feel like with transformation, business transformation, HR, whatever it is, it is so very fluid now. It's never ending in so many ways. Michael, what are some of the problems that employers are bringing to you now that they weren't maybe necessarily three years ago? What are you hearing? There's a lot going on around sovereignty in Europe at this point. And I'm going to hone in on the needs of European employers because that's what I'm closest with.

[00:11:10] So there's a lot going on around sovereignty and this adaptability. What do I do if this is a question we get a lot? So what do I do if this happens? So there's so much going on on an economical perspective from a geopolitical perspective, from a technology perspective, from a compliance and legislation perspective. So it's like a lasagna of complexities, like one layer upon the next. And people are just trying to navigate all that complexity.

[00:11:38] And so they want to build solutions around HR, around payroll, around payments, around time management that are resilient, that can exist in such a world where change is constant, where you need to adapt and course correct all the time. And so that is the big ask.

[00:11:56] And within that, obviously, there's a question around sovereignty and around how can we make sure that we're no longer dependent on anyone who wants bad things from us or who doesn't want to play along or who wants access to our data. So that sovereignty idea is a big ask these days. The other thing is, obviously, how do we prepare for AI? And it's not just AI in HR systems, right?

[00:12:22] It's the effect of AI on the workforce, because everybody knows that tomorrow will look differently, except no one really knows what it will look like. So we're all seeking for what the world will look like. And you have to do doomsday thinkers that AI is going to destroy all the work. And you have people that ignore the whole thing and any flavor in between, right? And so that's another thing.

[00:12:47] So people are looking for examples, success cases, navigators to help me take through, help me navigate through the storm. Yeah. And so those are our big themes. It feels like we live in a time where people are really trying to navigate, you know, quarter after quarter. And so the idea of having a three-year or a five-year horizon or a business mile like we used to have up until a couple years ago is a bit dissipating. Yeah.

[00:13:14] And I also think that there's this, and maybe it's, I don't think it's two separate things. I mean, I think there's everyone out there trying to obviously, I wouldn't say pivot their businesses, but maybe make their businesses more resilient and ready for the future, if not pivot them in some way, at least technically in how they deliver and how they act. But there's also just this, like you said, like we talked about the ground moving under them. Um, it's like the target keeps changing, right? And now they've got to completely rethink the way they actually work gets done, products get delivered.

[00:13:44] Um, and it's, it's just so many moving parts at once. It's, it, it makes you wonder, you know, I think about HR just by itself and say, well, companies haven't been fast to, you know, been, been very fast to move, right? Cloud. We've still got folks that are, that are struggling to get on the cloud. How on earth are we going to keep up with this? Uh, and how on earth are we going to get HR to actually digest this? And by the way, they've got to lead their organizations because they do have to reinvent work and they do have to reinvent the way the company does things. So the pressures, it seems are just immense now.

[00:14:14] Um, we had another guest, right? I don't know if you heard, uh, Mark Bradley say, you know, the CHRO is the loneliest, loneliest seat in the office, uh, or in the C-suite right now. And maybe it feels that way. Yes, because everyone's looking at them, right? Everyone's looking at them and all of a sudden they're not just in charge of systems and culture and values and, and wellbeing anymore, but everyone, you know, work is being reinvented as we speak. And hey, dear CHRO help, you know, help us too, because you're the work expert on, on our, on our executive committee here.

[00:14:43] So there's yet another burden on the shoulders of the CHRO. So it's actually quite fun because for 20 years, economists have been, or for 30 or 40 years or longer, have been clamoring for productivity in the West has to rise. And it's our biggest single lever and we don't see it go up. And all of a sudden we've got this massive toolbox that is AI that helps us, you know, go straight into it. And we're like, you know, some people are like dear and dear like. Yeah.

[00:15:11] How do you see that changing the way buyers are buying solutions now? Are they consolidating? Are they choosing specialists kind of looking at point solutions? Like what do you see in that way? I still see various, various directions. I think from a system's perspective, people really want to have a single, still access to that single layer with data. That remains very important where we call it HRAS or system record or HCM or, you know, any acronym will do.

[00:15:36] But there needs to be a layer that consolidates the key data points surrounding workers. And then you have a whole slew of systems underpinning that, whether it's talent, recruitment, appeal, time, training and learning management systems. And there I see much more of a diversified approach where people are looking for best in class. Most for purpose, best degree, whatever I can. There it's not acronyms, but there's many words for the thing.

[00:16:05] But there it's more around how can I be as close as I can to my worker, to my employee and satisfy the needs on the shop floor. And again, it goes back to that friction. How can I make sure that I have a single source of truth and at the same time satisfy the needs of the local worker who needs to fill out a schedule in a restaurant outlet or on the shop floor? And how do I consolidate both?

[00:16:29] And that is, again, that's really the search we help our customers and employers with most of the time. It's navigating that complexity. So for me, it's not the pendulum between centralizing and localizing and then the pendulum swings back. It's really around what are the different options I have and how do I put my landscape together? Yeah, I think you're right.

[00:16:54] I think there's, you know, everyone's kind of trying to solve for various different, you know, it's like, what's the image of like where there's a dam broken and people start putting their finger in one thing and toe in another? And I feel like that's what's happening right now. It's like with Point Solutions, you know, everyone's trying to, you know, get the latest thing, plug the latest hole. But are they looking at it in a very platform way? Are they looking at it in a very holistic way? I'm not sure everyone is. I hope they are. And a couple of months ago, at the start of the year, you had this thing called Saspocalypse.

[00:17:24] And people were thinking, you know, everyone's going to build their own HR application on Lovable or on one of these apps. HR is dead. Yeah, HR is dead or systems or ERP is dead and you just bytecode your own application. Well, there is a little bit more to it than just bytecoding an application if it needs to be deterministic in its logic. Meaning if you put this in, this comes out always, every time. And making and maintaining it and making it sustainable.

[00:17:52] So making it so robust that it stands the test of certification and integration and, you know, 2,000 concurrent users and all these things. So I think that fear, I think that really went down. I don't think, obviously the thresholds to build software has gone a lot lower and will go even further down in my opinion. Yeah. But I don't think you'll see just everyone who has a Lovable license or a Cloud Code license build their own applications.

[00:18:22] Because at the end of the day, you need a central repository that is trusted. Yeah. And that trust is inheritance. And it needs to be constructed over time by many stakeholders. It's not someone, not because you have an application that everybody goes there and trusts the application. So that is something that I, you know, a fear that I saw in the markets at the starting year that didn't play out at all.

[00:18:48] Maybe at the very end, maybe some point solutions left and right will be commoditized. But the big landscape, no, I'm not too concerned about that. Yeah. Michael, I'm curious. We've been talking here for probably more than a year, at least this year heavily, probably last year is maybe when it really started picking up about the focus on the frontline worker.

[00:19:09] So I just want to ask you if that also is a noticeable kind of emphasis or focus that you're seeing in Europe. Like I see a lot of impact to time, time and scheduling and workforce planning, right? All of those have been really large leading conversations here for a year, the last year or so. Is that similar over in Europe? Yeah, very similar. Or would you say there's always been a frontline workforce focus? Yes, totally. And why?

[00:19:39] Because it influences your daily operations, right? It influences, it has got a straight effect. Your payroll system can go down for 20 days a month. But if you have the right data input and you calculate, nothing happens. I'm not pleading for that. And it never happens. But imagine that, right? But when a workforce management or a scheduling application, it really runs hour by hour, how a shop floor, how a restaurant, how a kitchen is managed.

[00:20:05] And those, that is, it's as close to work as you can get. And that is, that's, we see that same trend. It's not just about the front office or the front of work. It's also about the convenience surrounding it, Julie. So, you know, what is the convenience I have in swapping out a shift or trading shifts or predicting what the next day is going to look like?

[00:20:29] And with what amount of flexibility I can fill in a, you know, a missing shift, a blank shift that I can pull in a temp staff or anything else. So that is really important. It's the mix between getting super close to the reality of work and at the same time offering maximum options of convenience. You know, obviously right now, I think, and as we go forward, services feel like the moat, right? Feel like the value add for, for customers, right?

[00:20:58] And so I think that, you know, as the tech gets, you know, everyone's going to have great tech eventually, I'm sure. How do you feel like employers should be evaluating tech and services together now with AI? And are they doing that more, particularly as compliance is becoming so much more rigorous and so much more aggressive in the market? I think it's converging. Software and services are clearly converging.

[00:21:20] If with services, you mean I pick up a phone and I call a consultant and I wait for five days to get a quote and then, you know, the consultant will come along and do 20 days worth of work. I think that will be totally compressed through AI. Yeah. Because a lot of your questions, you'll be able to prompt and people will simply no longer have the patience in their consumer behavior to wait for that.

[00:21:45] So what I see happening is that through compressing those service, a lot software can, because of the fact that the thresholds to build software is getting so low, a lot of the services can actually start being softwareized. So I think Phil first made or invented this term services as software or SaaS. So for 20 years, we've spoken about SaaS and we've all fallen in love with software as a service.

[00:22:14] We see the opposite happening. It's services software. And a lot of service work is now being pushed together in automated processes, whether in the back end or in the front end, and effectively it's becoming software or at least enabled through software. And I think in HR, we have a ton of work to be done there. And as a business process provider, ultimately is what we are, or a payroll service provider, we're actually transforming that work.

[00:22:43] And in reality, it has to do with, I'll give you an example. There's probably a thousand examples, but I'll give you this one. A lot of work in managed payroll services is around ticketing. And you basically receive all types of requests from customers. A human looks into them and then navigates those answers, provides an answer.

[00:23:04] A lot of that, a lot of those answers can be solved by agents collaborating in a multi-agents setup and then sending those answers back. And so those are the things that we're scaling up and pushing back. And it's a perfect example how something that is, ultimately it's still a service, but it's entirely executed by a number of software agents or AI agents working together and providing a response.

[00:23:30] So this is one of the perfect examples where you see software and services converge. I absolutely agree. We've cited that here on the show and in some of my work. I totally agree with Phil. I think he was way ahead on that a few years ago. I think they put that out. The services as a software. I think that's exactly what you're going to see.

[00:23:47] And especially with the agentic capabilities and the way we're sort of working towards a holistic orchestration, which I know that we've said it's been a little bit of marketing, but it's really starting to come to life now when you look at how many of the platforms are stringing handoffs and processes that weren't traditionally in the same place together. I think there's just so much opportunity there. And I love that. Are employers out there now looking at AI? Are they moving cautiously?

[00:24:15] Are they because you guys have a bit more legislation than we do in the EU, right? Always. You're a little bit more faster to govern things, I feel like. And there's a lot of debate about that here in America, right? About whether or not we're moving too fast, whether or not we need more legislation. And then the worry is obviously conversely that, well, if you do that, you're going to slow innovation. Do you think that that legislation has helped companies be more comfortable with adopting? Or do you see there a cautious movement on adoption? What are you seeing in that regard?

[00:24:44] Well, I see a lot of regulation outside of AI, right? So it's more on traditional salaries and payroll and benefits and pensions and data security. I don't see a whole lot of legislation at this point around AI. We have the AI Act now in Europe. But I think your point definitely stands. We're in a massive innovation cycle and we probably will be for another couple of years.

[00:25:09] If you put too much legislation on top of it, you will stifle the innovation. If you don't, if you put too little on it, it will, you know, there's a risk of creative destruction of sorts. And so the question is, where do you put that balance? It's not a very easy time, in my opinion, if you're a lawmaker, because what you do for the first time in 30 or 40 years, we have an incredible lever for labor productivity.

[00:25:36] And in particular in Europe, we will need it over time because we have a pension wave, which we're basically riding. I want to say it's coming along, but, you know, actually riding the wave or at least the start of the wave. I don't think the U.S. will be very different there. And AI can be basically your surfboard to help you ride that wave because a lot more and more people will leave their workforce in the next 10, 20 years than ever before.

[00:26:04] And so we'll have to fill up those empty seats. And it may not be through people, but through agents. And so a lot of people think about job destruction. Surely some jobs will be destroyed. But there's also a lot of jobs that simply will have to be replaced by agents and bonds because there's no other alternative, you know, unless we started making babies 10 years ago. And we know that didn't happen. There's always been legislation there too, right?

[00:26:34] Yeah. To encourage and discourage. Yeah, I think AI legislation, I think everyone's trying to find a balance. You see these horror stories. I think the media is making a lot out of it. I'm pretty relaxed about it. And I would say let's see what AI can offer us. Let's take the best of it and then we'll regulate the worst of it. Michael, what do you see in that regard just with employers, how they're looking at what they're asking of you, right?

[00:27:04] I mean, I've seen a lot of my clients in every region, even every service line, every tech line being asked to kind of do more than what their scope is, right? Take on some adjacencies, take on some scope creep, which is great, right? I've seen some cool solutions getting turned on as a result just because the demand is certainly there. And compliance is, I would say, a big one for that. But what are you seeing employers asking you to take on that you might not have in the past?

[00:27:28] I think the answer is already in your question in a way, Pete, because they are looking at every HR process that is compliance driven or that has an element of compliance in it. And there they need help. Yeah. Why? The waves, the little waves of compliance changes are coming at such a rapid pace that for an employer, it's incredibly hard to keep up. And so there they're looking at specialist providers to help them out, master those little waves.

[00:27:57] And so we see processes around HR, pay, benefits, time, increasingly well-being to the extent that it's also becoming compliance led. So those compliance led HR processes, employers want to see them not necessarily in one system, but, you know, they need A, help with it, external help with it. And B, ideally, they want it out of one hand so they can basically rely on the compliance expertise of that single provider. Yeah.

[00:28:27] And then other than that, there's a whole category of non-compliance led HR processes, which are developing a little bit in a different way. But I think everything that is really touched by compliance and legislation is merging into one. Also, from a data flow perspective, a lot of these data are interconnected. You need HR data to run a time registration system, then to run a payroll because you need absences for your pay. So those data points need to flow together anyway.

[00:28:57] Yeah. So why not bring them together, outsource them, work with a single provider who can then run the whole shop. And it goes back to this old school, maybe a little bit old school difference between hard HR and soft HR, where the hard HR is becoming one package, one integrated suite. And then soft HR is more the work for specialist providers, each in their own swimmelike. Yeah, absolutely.

[00:29:23] Michael, when you think about operating models, right, you've got a lot of multi-country clients, I'm sure. Or is they're designing that now with AI and all that we know and where things are kind of going. What would you say to an employer that they should centralize? What should they maybe organize regionally? And what do you keep local at this stage? That's a big question to unpack. I think to begin with. Different strokes for different folks, right? Yeah, exactly right.

[00:29:50] I think that's the short and sweet answer, Julie, to answer that question. But I think there's a reality in different markets with different appetites. So there's markets such as Belgium, Netherlands, where outsourcing is really the standard. There's markets where it's much more diversified, such as Italy, France, Spain, where the market is sort of between outsourcing.

[00:30:15] In France, there's what they call mise à disposition, which is a sort of in-between thing between SaaS. And so you run the systems, but you don't run the process. And then there's the pure SaaS option. So I think taking into account those regional differences and what the local habits are is the first. And then the other is what you want to achieve. What is your captive organization? What do you want to do as an organization yourself is the other side of the equation. Where do you want to put your effort?

[00:30:41] And does it really make a difference in your value proposition as an employer towards your employees? And that's another set of choices. And then you have the whole technology question there. Do you want to centralize or do you want to be close to your workers? And it really depends on industry because some industries really want to centralize. Others want to deploy a lot of power into their local countries.

[00:31:04] And again, to my earlier point, it's not a matter of one single design or a pendulum that swings back and forth. It's more a matter of adapting it to the needs of your organization today and tomorrow. And playing around with those options is typically what we see being done. Overarching trend is towards more outsourcing for sure. Yeah. Because of specialization and innovation.

[00:31:28] I think in addition to that lever, a lot of folks see it as fairly binary, like insourced or outsourced, right? And in fact, it's even more nuanced than that because internally you have different levels within the organization that you can have interact and touch pieces of work. So it's not always, you know, kind of that push and pull against do I keep it or do I outsource it? It's also if I'm going to keep parts, do I keep them globally, regionally, locally?

[00:31:56] You know, and how do I hang that all together so that it works with whatever third party support fits that model, right? It's like a big puzzle. Crazy fun. Yeah. Well, I love now today, like, you know, the one size fits all is gone, right? Like you can now go and modularly adopt your services, right? And say, hey, look, I've got these investments and strengths here, but I'm weak there or I'm not good at this process or that process. And you can have a partner backfill that.

[00:32:22] And I think that's ideal because sometimes things are going to change in the future maybe and you will want more help or less help or whatever. I think the idea of complementing and modularly boosting and having best of breed, if you will, whether it's a mix of your own investments and capabilities and your partners, is just going to create a better, that agility and fluidity capability that we're talking about. Exactly right. I just want to bring that up.

[00:32:46] It brings you straight into that point of fluidity again where you have to be able to adapt to whatever the future will throw at. Yeah. Yeah. I literally ran into a – I apologize. I don't remember the name and I don't remember – I was in America, obviously, because I've been in London and I've been in Vegas in the last two weeks. So I'm a little off on time zones.

[00:33:07] But I met a vendor, a down market vendor, who has a model where they have made it incredibly simple for employers to say, hey, I want to process payroll myself or I want you to process all in, fully managed, in a literally flip the switch kind of a way to where they can fundamentally go back and forth, which I don't think you would want to do that. But the point is they can do it very fluidly, to your point. Hey, maybe at some point we're operating fine internally and then all of a sudden we lose our staff and we need help.

[00:33:36] We can easily switch the – flip the switch and go back to a – or go over to a managed engagement. And again, I think it's – I'm not saying that's right or wrong. I don't – I have a lot of questions about that. But – and I don't think that's right for probably every company or even bigger companies. But I do like the idea of the modularity, fluidity and saying, look, my needs could change in a dime and I want the ability to go and activate the right things that underpins my direction. I love that about what's coming about.

[00:34:03] We love to think about the basic metaphor of Lantour as a large enterprise. But think about a mid-market or an SME. There it's a very different question. There it's George from Payroll who runs Payroll. And if George, you know, gets – has a back problem and cannot get out of his bed for the next three months, what are you going to do? And then it's literally a matter of flipping the switch.

[00:34:25] And we work a lot with those customers as well because Europe is a continent of SMEs just as much as the U.S. is a country of SMEs. And in an SME, you don't necessarily have that luxury of having redundant staff and backup. And you basically – it's George from Payroll. Extreme sports has been a fun thing forever. And, you know, if George wants to climb the Himalayas and has a bucket list before he rides his retirement wave, we're all – Exactly. Yeah.

[00:34:54] Are you going to stop him? Exactly. Right. Yeah. Yeah. So, Michael, look, we'll wrap this up, I guess, with maybe some rapid-fire questions, if you don't mind. Sure. And then get you out of here on your way, man. But, look, what's one assumption about the European market that you think listeners should just, you know, maybe correct or change or leave behind, if you will? Well, you can make sense of the complexity by taking a little bit of distance and then seeing through the complexity.

[00:35:22] So, at some point, you start to understand that we basically try to do the same thing in every country. You start – you know, you want to collect taxes. You want to collect some social security contributions, maybe some insurance. Then, at the end of the day, out comes the payroll, if we just say in the payroll example for a minute. And if you step back, you basically see a lot of uniformity, yet a lot of people get stuck into details.

[00:35:45] So, I would say if you consider Europe or whatever continent with a great deal of diversity, zoom out, step back, and have a look at the bigger picture. Because, basically, we're trying to do the same thing everywhere. It's just the local flavor that differs. And so, I think, you know, consolidating payroll across Europe is a perfectly doable thing if you don't get stuck or lost in the detail. Lost in the sauce, as we like to say here at the HR and Payroll 2.0 podcast. Okay, Michael, another one here for you. You've got a lot of employers.

[00:36:15] We've heard a lot of stories here on the show about, you know, people kind of replacing vendors very quickly, maybe flippantly in some cases. But what would you say to a buyer or an enterprise, any size company that is out there just thinking about replacing technology? What should they be assessing most, you know, most importantly, first and foremost, before they make that change? I would take a long view in a market that has a short view. So, basically, we're all navigating quarter to quarter.

[00:36:42] But in your vendor, in the people you work with, what is your long-term relationship? Because, you know, if you deal with payroll decisions and HR decisions, those will continue to be long-term decisions. Even if we navigate, you know, very short corners and we're navigating through a bit of a fuzzy period at this point in time. Choose them wisely and make sure that they can help you in the long run.

[00:37:06] Not just get to the next two quarters through either a cost-saving program or through something else. If you deal with HR, if you deal with people, it's simply a long-term relationships. Make that reflect into your vendor selection as well. Right, right. Yeah, buy for where you're going, not where you are. And then lastly, what would you say to an employer operating in Europe or maybe thinking of entering Europe in some way? What's the one thing you think they got to get right in the next 12 months?

[00:37:34] That's, again, a very tricky question to unpack and in particular in rapid fire. But I would, I would again go back to make sure you have a good view on who you want to be as an employer and what you want to offer to your employee. What is your value proposition? Where do you stand for? Do you want to, to Julie's point, do you want to be very close to the frontline worker? Is it more around war for talent? Who are you as an employer? What's your business strategy? How does that reflect on your employee or employer value proposition?

[00:38:03] How do you behave towards your workforce? And then use that as your strategic lens to, to consider things. Don't think, do things, you know, based on the latest AI innovation or the latest fear for a SaaS apocalypse or any noise in the market. Step back, zoom out, relax and take a decision. Yeah. Yeah. I love it. I love it. I'm cracking up in my own mind. I'm going, don't start in France, Italy. If you can avoid it.

[00:38:30] I'm thinking, you know, don't underestimate works councils. You can also start in the hardest market and then get it over with quickly. So there, I've seen cases where we've actually done that and said, let's crack the hardest nut first. And then everything after that will be a breeze. Yeah. No, it's true. There's different strategies, but you know, it's just, that's... It's only for the most courageous ones, Julie, to do that. Fail fast, fail forward. Right. Exactly.

[00:38:59] I was going to say the same thing. I've seen both where companies will go in and say, hey, let's do a pilot country, right? A light country. And they'll dip their toe. And then there's others that are like, let's just go for the hardest one right away and rip it off. And often it's where the ship's burning, right? Where the burning part is. If you have critical mass somewhere, you don't have a choice, right? I was talking to a leader this week and Brazil came up as the first, I think one of the first they're tackling in their global work. And I was like, ooh, all right, you're really going for it. Yeah.

[00:39:29] But the other thing is just diving into it is not a bad thing. And so I've lived, so we, at Esiworks, we acquired a business two years ago called F2A in Italy. And in order to help out with the integration, I moved over there for a year. And I was a little nervous because I didn't speak the language and, you know, you know, Italy from vacation, but not really from working there. If you really go all in, you learn a lot. And then in a way, fear is your worst master.

[00:39:55] And I think by just digging in, you lose a lot of the fear and you can overcome all these things. So even Pyrrole in France and Italy, it's probably not as bad as you thought at first. And there's help. Got a hell of a reputation though, right? Yeah, exactly. Michael, this has been fantastic, man. We've got to do this more often. You've got to give us a European update every year and we'll have to make it happen. But where can we get in touch with you? Where would you like folks to connect with you?

[00:40:23] And where would Esiworks be this year on the fall trail of events? We'll be, next week, we'll be at Unleashed in Paris. And then a couple of weeks down the road, we'll be in Barcelona, Spain for Workday Rising. And we're part of all the major shows across Europe. And if you can't find us there, you will find us at Esiworks.com. Absolutely, man. I love it. And if not, you'll be in the news. I'm sure you guys are moving and shaking all the time, always picking up some new stuff. So congrats, man.

[00:40:52] You guys have put together really, really formidable. I mean, the market, right? How many people are you guys paying now in Europe, across Europe? What's the numbers now? Six million. Six million. Yeah, there you go. So you guys are everywhere. And I commend you. I think you guys have done a great job putting together a very, very formidable offering. So always good to see you, Michael. I appreciate you, man. Thank you so much. Say hi to Tanya and the team for me. I will do that. For both of us. Yeah, I love it. Yes, please, please. And thank you to our audience. We really appreciate you, as always.

[00:41:21] And we'll be back with more content like this very soon.