Alight study reveals half of companies committed payroll errors during the last five years

Building on the data from the 2023 Alight Global Payroll Complexity Index, this new report surveyed nearly 300 payroll professionals and stakeholders to understand key aspects of payroll operations, including the number of countries that each company processes payroll in, as well as the types of processes and technology they used to execute payroll.

In addition to penalties, the report found 51% of those surveyed still use spreadsheets, and 19% use outdated manual or paper processes within their payroll departments. 

The survey also reveals that many companies are shifting towards more streamlined processes and migrating more of their payroll operations to the cloud. Currently, only 26% reported employing fully cloud-based strategies. Despite significant media attention around AI and a continued industry trend to migrate to digital solutions, only 8% of respondents expressed intentions to incorporate artificial intelligence (AI) to their payroll processes within the next two years. 

Organisations surveyed also placed integrating payroll and benefits into a unified platform as their number one priority, followed by employee data analysis and implementing automatic reporting mechanisms.  

As well, payroll challenges are magnified for companies operating in the top 10 most complex payroll processing countries where there is an increased likelihood of receiving a penalty for payroll non-compliance. The report underscores a direct correlation between the number of countries an organisation operates in and the likelihood of receiving fines. Notably, 24% of organisations operating in a single country received fines. However, this percentage sharply rises to 67% for organisations expanding their operations into two-to-five countries, marking the highest prevalence of fines within this range.                                                           

“Payroll is an integral part of any business and can damage an organisation’s reputation if something goes wrong,” said Luca Saracino, executive vice president of payroll and professional services at Alight. “These mistakes can be mitigated with a well-integrated, single platform that combines all-important HR functions such as payroll and benefits into a one-stop shop. Streamlining such processes not only saves time and minimises risks of human errors, but also goes a long way in safeguarding both the company and promoting employee wellbeing.”