Payroll efficiency could peak unless innovation remains a priority

Payroll efficiency could peak unless innovation remains a priority

Payroll efficiency may have improved in the last year due to technology-driven innovation, but nuances in global and local compliance needs are hindering further growth. That’s according to the latest Global Payroll Efficiency Index (PEI) from specialist global payroll provider, CloudPay.

The PEI report is based on analysis of more than one million payslips that CloudPay processed in 2023, from over 130 countries. The latest iteration of the study shows overall improvements in payroll across the global. Data Input Issues (DII) fell 3.6% and now stand 10.1% lower than the rates reported in the first edition of the report in 2019.

Issues per 1000 payslips also declined globally for the second consecutive year and now stand 35% lower than levels reported in 2019. This reflects an increased adoption of technology and innovation over the past few years which is giving teams better data and more time to pick up on errors immediately, reducing payroll issues.

While there have been positive improvements, the report does highlight a compliance barrier for global payroll solutions due to the ever-changing nature of worldwide and local legislation. According to CloudPay, if payroll is to be equipped to navigate the complexity of global payments and compliance, three core actions need to be implemented:

- Alternative funding options should be explored to boost tech innovation further and streamline time-consuming tasks.
- Automation and standardisation need to be prioritised.
- Improved data analytics has to be developed to support compliance insights.

Grant Tasker, Senior Director of Global Payroll at CloudPay, explained:

“Payroll has made real progress in the KPIs that matter most for the function which has largely been driven by digital innovation. However, where there has been limited progress, it is the complexity of maintaining compliance across countries that is a core blocker. At a time when payroll is becoming more complex, especially for businesses operating in multiple territories that all have their own individual demands and regulations, technology will prove vital in maintaining high levels of payroll efficiency and performance. Our products now enable Local Payroll Information (LPI) to be consumed either through templates or integration, and features like this can make all the difference. It’s critical that the passion we’ve seen for this innovation in recent years doesn’t stall.”

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