National Payroll Week: Payroll complexity costs enterprises millions each year, new research reveals

New data from Strada shows ‘complexity tax’ draining payroll budgets and limiting value from HR technology investments



As National Payroll Week 2026 shines a spotlight on the crucial role payroll professionals play in keeping businesses running smoothly, new research from Strada has revealed that payroll complexity is costing enterprises millions each year, creating a measurable ‘complexity tax’ across payroll and HR budgets.



The findings, from Strada’s Workforce Possibility Report 2026, show that firms are losing an average of 2.6% of their total annual payroll spend due to errors, rework and inefficiencies. For a business with a £370 million payroll, this equates to almost £10 million in avoidable costs each year, highlighting the significant financial impact of fragmented systems and manual processes.



According to Strada, despite sustained investment in HR and payroll technology, complexity continues to erode value. The research found that 25% of all HCM and payroll technology spend is now dedicated to managing system complexity rather than delivering transformation or improvement. This reflects the growing burden placed on teams to maintain, reconcile and connect multiple platforms, rather than benefiting from streamlined operations.



The number of systems in use is a key driver of this inefficiency. Companies operating six or more payroll and HR systems are nearly three times as likely to lose over 3% of their payroll spend to errors and inefficiencies, compared to those with more simplified technology environments. This reinforces the link between fragmented infrastructure and rising operational costs.



These findings build on broader trends identified in the report, which show that many firms are yet to fully realise the value of their HR and payroll investments. Manual workarounds, legacy processes and parallel systems remain widespread, limiting efficiency and increasing operational risk.



The persistence of these challenges highlights a widening gap between system capability and day-to-day performance. While technology investment remains high, much of that investment is not translating into improved outcomes, as teams continue to manage, rather than eliminate, complexity.

Commenting on the findings, Jenni Flaherty, Director of Payroll Product Strategy at Strada, said:

“National Payroll Week is an opportunity to recognise the expertise and dedication of payroll professionals. However, our research shows many teams are spending too much time managing complexity rather than delivering strategic value. Those responsible for ensuring people are paid correctly and on time shouldn't have to contend with fragmented systems, manual checks and inefficient processes simply to get the job done.



“When firms dedicate a quarter of their technology spend to managing complexity, it is clear that simplification and optimisation need to be a priority. Reducing fragmentation and improving how systems work together is key to unlocking significant efficiencies, cost savings and long-term value.



“Payroll is one of the largest and most sensitive areas of business operations, so this complexity has implications far beyond any individual function. Giving teams better connected systems and greater visibility can help payroll become more efficient while enabling HR and finance leaders to make better-informed decisions.”



ENDS



Notes to editors
Strada’s Workforce Possibility Report was conducted independently and reflects insights from senior leaders responsible for HR, payroll and workforce operations within large enterprises across the UK, North America, Australia, Singapore, France, Germany and the Netherlands.



About Strada
Strada is a people, payroll, and technology leader that simplifies international workforce management. Across 180 countries, Strada designs and delivers people-first solutions powered by cloud-based technology that help organisations grow and enable workforces to perform at their best.



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