Key learnings

Key learnings organisations should take from our study

Our survey has irrefutably demonstrated that there is a colossal opportunity for companies to improve their payroll. There are many inherent interlinks between pain points, penalties and types of technologies employed.

While our research has shown some predictable results such as the more countries you manage payroll in the more vendors you use and the greater propensity for outsourcing.

If your business is paying people in 2-3 countries or more, it seems to be the tipping point for companies to opt for a payroll outsourcing model.

In addition to outsourcing, there are opportunities for companies to improve and maybe introduce basic initiatives like measuring payroll performance, as payroll performance tracking was lacking across many organisations.

Opportunities for improvement

It is interesting to note that 51% of respondents still use spreadsheets to process payroll and manual repetitive tasks are the biggest pain point.

This is a big opportunity for businesses to automate their payroll processes using AI and/or process automation to help reduce the number of manual tasks required.

With only 4% currently using AI and a further 8% planning to implement it in their payroll processing, there is room for organisations to take advantage of the potential benefits AI can afford.

Removing manual tasks from the payroll process reduces the potential for manual errors, which in turn can reduce the likelihood of penalties for non-compliant payroll.

Measuring payroll performance

The fact that 36% of respondents don’t use specific metrics to track the performance of their payroll is a telling factor. Without measuring performance, it is difficult to see when things are going right or wrong.

By measuring payroll performance organisations could potentially see issues and resolve them before they become major problems.

Tracking and analysing payroll processing performance can help mitigate the occurrence of penalties.

Where is your payroll at?

This study has shown that many companies ‘could do better’ when it comes to payroll management. Naturally there are organisations who have already optimised many of their processes, but they should not rest on their laurels.

This is even more critical if a company employs people in multiple countries as legislation, working practices and laws do change regularly and businesses can easily be caught out by these changes.

Keeping on top of this can be a challenge as demonstrated by 1 in 2 respondents who cited they had incurred a payroll penalty. A possible solution is outsourcing, but here too old thinking seems to still prevail, with a reluctance to outsource payroll.

However, companies operating across several countries and/or are active in the mergers and acquisitions space should consider outsourcing seriously due to the experience outsourcing companies have in terms of payroll best practice.

With new technology constantly advancing, why not outsource a single country payroll? This allows the experts to manage the process and provide the advantages of innovations such as AI and data analytics.

AI and the future for payroll

2023 brought mainstream attention to AI and its potential impact on people and jobs. It bred the perception that once adopted, jobs would be eliminated and the world of work would be forever change.

Given all this, it was expected that AI, machine learning and analytics would be at the forefront of respondents' focus and consideration set in terms of payroll technology and value generation. However, our survey clearly demonstrates that technological advancements in payroll, including AI, are lagging for many businesses.

It's unsurprising then that manual processes are recorded as the biggest pain point by respondents in our survey and that more time and effort is expend on using spreadsheets in the payroll process than analysing their data.

While not explicitly asked, it feels the number 1 priority for payroll runs is ‘please let there be no error’. The prevailing approach seen in the research is ‘if it ain’t broke, don’t fix it’.

While it is admirable that organisations want to ensure their people are paid on-time and error-free, with today’s technology this should just be a given.

Furthermore, if the right technology is employed together with the right processes, errors can be anticipated and eliminated before spurring any onward issues.

Looking forward there will no doubt be more talk of AI. Companies who integrate it into their processes and decision making should realise efficiency gains and growth.

Yet, if you are still using spreadsheets in your payroll processing and manually integrating systems, your business may be one of those eventually left behind.

Survey methodology

Carried out online between July and September 2023

271 Respondents from 42 countries

Top 5 countries represented
United States	26%
United Kingdom	16%
France	7%
Ireland	6%
India	4%

Top industries represented
High Tech	17%
Professional Services	12%
Banking and Finance	8%
Manufacturing	7%
Healthcare	7%
Business and Management Services	7%

Breakdown of company size of respondents by number of employees
1 − 250	10%
251 − 1,000	15%
1,001 − 5,000	25%
5,001 − 10,000	13%
10,000+	37%

So how does your company perform
when it comes to processing payroll?

If you would like to find out or would like to know how we can help your business’s payroll function, get in touch.

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