Top 5 findings from our annual payroll survey | Edition #13

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Welcome to the latest edition of Focus shorts. We're here to share the result of Moorepay's annual payroll survey – the largest, ever-expanding study in the industry, with over 700 participants this year alone.

Launched in 2019 out of a genuine passion for payroll software innovation, these survey findings give you a comprehensive understanding of the payroll landscape. And this year, armed with half a decade of data, we unveil not only the evolving trends but also a sneak peek into what 2024 holds for the payroll industry. Let’s dive into five fascinating discoveries.

P.s you can read all the findings here or watch the full webinar here

?? Payroll outsourcing uptake is at its highest rate since 2019

This year we saw a 27% increase in UK businesses choosing to outsource their payroll to an external provider.

Supporting this finding was the 19% drop in businesses processing their payroll in-house via payroll software. This figure was stable for the previous three years. However, despite this relatively large percentage drop, in-house payroll via software still remains the top choice for UK businesses.

Other findings found an increase in free HMRC payroll software and an increase in outsourcing to a payroll provider.

One of the biggest benefits of outsourcing is the advanced reporting and analytical tools available. Payroll data is extremely powerful. To be able to get really rich analysis and have time to look into that and produce trends is extremely useful data.

- Christina Holloway | Head of Managed Services, Payroll, Moorepay

?? A quarter of businesses are still taking big risks with their payroll data

22% of businesses use managed payroll services with insecure data input methods.

There's been a 67% surge in businesses reverting to outdated services using paper, telephone, or email for data input.

We've also seen a slight decrease in the use of both cloud-based and on-premise/desktop software, despite their popularity, and a 43% increase in the adoption of managed services with cloud-based interfaces.

Payroll requires the management and handling of some of the most sensitive data – and it must be taken seriously. The people aspect is also important. Research has suggested that 70% of data security breaches have some sort of human element involved, and that must be considered when putting a plan in place. For example, Moorepay runs ad hoc tests on phishing emails to ensure employees have understood their security training.

- David Morris | Chief Operating Officer, Moorepay

?? HR & payroll software integration uptake doubles since 2022

There has been just shy of a 100% uplift from last year in the number of businesses integrating their payroll & HR via APIs.

Connection via APIs is still the least popular option, but we see this upward trend of integrated payroll and HR Software being the future. But why is this?

I’m sure we’re all aware of the complexities when using separate HR & payroll systems. The double entry of data, the time it takes to do that, the room for error, and the security considerations. It’s a process that almost seems archaic in the modern world. If we stop and think about how many software tools are used in your business, we can see that an all-in-one system can create a much more cohesive process, not only for your payroll, HR, or finance teams but for all your other colleagues. There are also other huge benefits when it comes to the cost savings of having one system, including time savings on procurement, implementation, and management of one contract.

- Sarah Dowzell | Chief Operating Officer, Natural HR

?? Payroll frustrations are on the rise

In 2023, there was a whopping 73% increase in the number of frustrations reported.

So what are some of the top frustrations that businesses are facing?

• 22% of those surveyed were frustrated at calculating holiday pay,
• A further 21% didn’t like the limited reporting and analytics,
• And 20% of people surveyed felt they had limited functionality in their payroll solution.

In fact, every single frustration has risen since 2022.

These frustrations to me are all linked. Systems today should be able to analyse data and produce reports, yet we see it in the top three and increasing as a frustration. Similarly with functionality. If technology is improving at such rapid rates, then so should your payroll functionality, especially with advancements in AI and automation as they slowly make their way into the industry.

These frustrations may all stem from the relationship with your provider. So how can this be reduced? Well, communication is key. A phone call and a conversation can be incredibly powerful, and with Moorepay that line of communication is always encouraged.

- Vickie Graham DipM FCIM ACIPP | Business Development Director, CIPP

?? Switching is easier, but fewer people are doing it

Let’s say those frustrations are through the roof and you’re looking to change provider. Well, just 2% of those surveyed said they found switching very difficult - a monumental decrease of 85% since last year.

However, despite this, those who considered switching but decided not to go through with it rose by 31%. This continues the trend that businesses are more reluctant to switch.

The first part we need to consider is why are people not switching, and the second part is why not now – because I think this is a question of timing.

Change requires a big commitment of time, effort, and of course money. You therefore have to be able to make the case for change in your business and to your colleagues, and few people have that ability to wake up in the morning and switch that day. And that’s what the data shows: people are struggling to jump across the line and make that case for switching, even if it's very valuable in the long-run.

- Anthony Vollmer | Managing Director, Moorepay

Anthony also highlighted the economic impact and the intangible benefits of switching. Listen to his section here.

Read the full findings right here