Using Disjointed Payroll Tech? It May Be Harming Employee Experience

From frontline employees to human resources and payroll teams, the ripple effects of outdated or fragmented payroll systems are far-reaching.

In a commissioned study conducted by Forrester Consulting on behalf of Deel (January 2024), 322 global decision-makers responsible for their organizations’ payroll strategies shared how payroll tech is impacting employee experience, retention, and more. Access the full study here.

Read on to explore the findings and their impact.

Fragmentation leads to frustration

Multinational companies are using too many tools to manage global payroll today, with organizations using six different tools on average for payroll. Due to this fragmentation, organizations are struggling to maintain a consistent employee experience, leading to payroll errors, higher costs, slower operational agility, and limited ability to analyze employee payroll data. 

For employees, these issues can translate to frustration and financial instability. For HR and payroll teams, it means being bogged down by manual reconciliations and corrections, leaving little time for strategic initiatives that could enhance overall workplace satisfaction and productivity. 

Finance managers also feel the impact, as they lack visibility into total workforce costs and unified data tied to their overall payroll operations. In addition, they have to manage the unexpected costs that often come with exchange rate fluctuations, support, and compliance.

Payroll employees spend almost half their time working on global payroll audits (12%), manual entry for global payroll (11%), global payroll compliance challenges (12%), and payroll errors and escalations with vendor support (13%).

The struggle for consistency

Almost half of organizations (46%) face challenges in maintaining a consistent employee experience across all geographies.

Using a patchwork payroll system often places a significant burden on human resources and payroll teams, who have to navigate multiple interfaces, processes, and regional compliance requirements, complicating their operations and increasing the potential for errors.

Payroll consolidation is a key strategy for overcoming these difficulties, ensuring a uniform employee experience and improved processes with a lower risk of error. 41% of decision-makers say a top benefit to consolidating global payroll into one solution is an improved and consistent employee experience across all geographies. 

Untapped data and its financial impact

One of the top challenges organizations are facing with their current global payroll systems is a lack of visibility into employee and payroll data (32%). This challenge has resulted in a limited ability to analyze employee data for 42% of decision-makers. 

This lack of data may result in organizations missing out on key information regarding employee experience. One-third of organizations do not actively track costs associated with poor employee experience, such as attrition and lower productivity. This oversight suggests that many are unaware of the full financial impact of their inadequate payroll systems. 

For HR and payroll teams, the consequences are twofold: they are under increased pressure to manage dissatisfied employees and are also challenged by the lack of insight into how employee payroll inefficiencies are affecting the company's bottom line. As a result, 43% of decision-makers say that accuracy is their top-desired improvement for payroll services to adopt.

The loss of top talent

Many organizations are facing significant consequences stemming from their top payroll system challenges. According to 40% of decision-makers, one consequence is the limited ability to hire and retain top global talent. This is a direct reflection of how payroll inefficiencies can tarnish an employer's brand and make it difficult to compete for skilled workers. 

For HR and payroll professionals, this translates to increased difficulties in talent acquisition and retention efforts, further straining their resources and effectiveness. However, partnering with a consolidated global payroll provider offers a potential solution, as 88% of organizations believe it would have a slight or significant impact on global hiring.

Delays and vendor challenges

Inaccuracies and delays from payroll providers not only erode trust and satisfaction among the broader employee base but also place additional stress on HR and payroll teams as they scramble to address these grievances and rectify issues.

The statistics are telling: 49% of decision-makers say they have experienced frustration from employees as a consequence of slow payroll vendor support and unmet service level agreements (SLAs), 54% have faced delayed payments to employees, and 53% have experienced inaccurate calculations of wages.

Employee onboarding and support

By moving toward a consolidated global payroll solution, companies can not only improve the efficiency and accuracy of their payroll processes but also significantly enhance the overall employee experience. 

Organizations can make improvements from day one of employment, with 85% of decision-makers saying an all-in-one global payroll solution would have a slight or significant impact on new employee onboarding.

This shift not only benefits employees and back-office teams but also positions organizations for greater success in the global marketplace. Employees often have complex payroll questions about payroll taxes, garnishments, health insurance deductions, and more, all of which can vary by jurisdiction. If administrative teams do not have the resources or experience to answer these questions, it may negatively impact the employee’s view of their employer. 

To overcome this challenge, companies are considering turning to global payroll experts. 86% of decision-makers say that consolidating global payroll into one solution would have a slight or significant impact on answering country-specific HR questions from employees.

The power of an all-in-one solution

Overall, 97% of decision-makers believe that having an all-in-one global payroll solution would be valuable or extremely valuable. 

Using one global payroll solution can have a positive impact on all aspects of payroll, including process improvement, reducing payroll costs, adhering to regional compliance requirements, and access to unified payroll data and global reporting.

As an all-in-one payroll and HR management solution for global teams, Deel enables international companies to manage their entire workforce in one user-friendly platform, with support from:

• Over 350 local, in-house payroll specialists who oversee local tax filing, year-end reporting, and more
• Legal experts who maintain compliance with local laws and conduct quarterly audits for the best risk management on the market
• Payroll software automation to streamline payroll transactions and repetitive payroll functions
• Localized contracts and document management and secure recordkeeping
• Systems that enable you to process payroll accurately and efficiently, ensuring all workers receive their correct paychecks on time

Learn more about Deel’s Global Payroll services and pricing by booking a 30-minute demo.