New Alight Report Finds 40% of Companies Will Modernize Payroll Systems By 2023
10 November 2021 - 5:40PM
Business Wire
Employers are increasingly using cloud-based technology to
change how they run payroll and pay their people
Reflecting a growing appetite for payroll modernization,
companies are increasingly replacing their antiquated payroll
systems with technology that moves them toward more rapid
calculation and payment methods, according to a new report by
Alight Solutions (NYSE: ALIT), a leading cloud-based provider of
integrated digital human capital and business solutions.
For the first time, cloud-based payroll systems (61%) exceeded
on-premise (39%) as the dominant payroll delivery platform,
according to Alight’s 2021 Global Payroll Complexity Index.
Furthermore, a quarter of companies (26%) have accelerated digital
payroll projects in the past year, and another two-thirds (62%)
expect to go through a digital transformation in the next two
years.
“The payroll function is becoming increasingly complex as
companies struggle to keep pace with shifting workforce
demographics brought on by the pandemic,” said Luca Saracino,
senior vice president, international sales and strategy at Alight.
“It was a major achievement for companies to keep payroll running
at times when business continuity was challenged, but it was far
from ideal. Clearly HR and payroll leaders are eager to realize the
benefits of digital payroll.”
According to our respondents, the primary drivers for
accelerated digital payroll projects include regulatory risk (42%),
corporate strategy for outsourced business processes (39%), cost
controls (27%), payroll talent shortages (19%), and M&A and
business divestment activities (15%).
Respondents also reported challenges associated with payroll
accuracy, as frequent legislative updates and changes to furlough
and job retention programs often required manual updates to payroll
systems, which increased the risk of costly payroll errors. For
example, the report revealed that 27% of data breaches in the
payroll processes since 2019 were result of human error, according
to respondents to the survey. In Europe, companies that don’t
comply with General Data Protection Regulation (GDPR) may be fined
up to 4% of annual revenue or €20 million, whichever is higher. In
addition, payroll leakage, resulting from poor payroll process
management, may cost companies 2% of their total salary bill.
“It’s possible companies are hemorrhaging millions of dollars
annually through basic payroll process failures,” said Wilson
Silva, senior vice president customer experience and HCM delivery
at Alight. “Luckily, they can turn those losses around quickly by
simply examining the payroll processes and correcting the basic
payroll errors commonly made by companies that lack visibility into
and governance of their payroll processes.”
About the Global Payroll Complexity Index
Alight’s Global Payroll Complexity Index provides HR and payroll
leaders with timely insights into the challenges and complexities
associated with processing single or multi-country payroll. Now in
its fifth edition, the biennial survey reflects the responses from
147 companies operating around the world. Nine percent of
respondents were corporate officers, while the majority (57%) were
senior-level management who oversee the HR and payroll
functions.
Earlier this year, Alight released a list of the top 40
countries ranked by payroll complexity. France topped the list for
the fourth consecutive report, followed by Italy, Belgium, Germany,
Spain, Poland, Russia, Switzerland, Japan and the United States
making up the remaining top 10.
For more information and to access the complete report, please
visit alight.com.
About Alight Solutions
With an unwavering belief that a company’s success starts with
its people, Alight is a leading cloud-based provider of integrated
digital human capital and business solutions. Leveraging
proprietary AI and data analytics, Alight optimizes business
process as a service (BPaaS) to deliver superior outcomes for
employees and employers across a comprehensive portfolio of
services. Alight allows employees to enrich their health, wealth
and work while enabling global organizations to achieve a
high-performance culture. Alight’s 15,000 dedicated colleagues
serve more than 30 million employees and family members. Learn how
Alight helps organizations of all sizes, including over 70% of the
Fortune 100 at alight.com.
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MacKenzie Lucas mackenzie.lucas@alight.com
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