Just days from the start of the new tax year, 41% of UK companies say speed and efficiency is their biggest payroll pain point. That’s according to new research.*

Other notable payroll headaches for British businesses include compliance with evolving legislation (34%) and maintaining accuracy (39%). As UK businesses look ahead to the new financial year and a flurry of upcoming legislative changes, including the rise in the National Minimum Wage, the findings highlight the difficulty in staying on top of constant shifts in legislation, technology and the wider economy.

For this large-scale research project 5,000 businesses and 18,000 employees in 18 countries across Europe were surveyed*, including the UK, France, Germany, Italy, Spain and Belgium. Although businesses noted payroll problems have eased in recent years, with 71% citing satisfaction with their overall payroll function, the findings set out a series of core challenges confronting payroll professionals.

The Core Challenges

The findings reveal striking uniformity in the payroll challenges confronting businesses across 18 leading European markets. In terms of demand for greater speed and efficiency to sweep through payroll processes, the UK stands virtually shoulder to shoulder with the survey average – 40%.

Meanwhile, in a nod to the current economic climate in Europe, an average 37% of businesses also cited keeping payroll costs such as staffing and software under control as a major challenge. With more businesses than ever making digital transformation a priority, the finding raises interesting questions about how well equipped they are to keep up investment momentum across operations and processes.

The AI Race

Despite the huge buzz around AI’s potential in the workplace, across Europe an average of 41% of businesses have no plans to invest in it for payroll. In the UK, just over a quarter (26%) of UK companies are currently using generative AI in payroll processing. That’s despite 35% of companies expressing demand for fully digitalised payroll processes without human intervention. Of those who do use GenAI in payroll processes, the most popular use cases are a chatbot to answer payroll questions (62%), decision support feedback (50%), detection of anomalies (45%) and the automation of routine tasks (45%).

Laura Miller, UK People Country Leader at SD Worx, comments: “The need for speed highlights the huge pressures confronting the payroll sector. It’s a hugely dynamic and demanding field where ongoing legislative changes and tech advancement keep on rewriting the playbook. It’s heartening to see that despite the complexities involved in the process, 71% of businesses are satisfied with their payroll processes.

However, with a raft of new legislation to navigate and ongoing digital transformation reshaping operations, there will be no sitting still in payroll. Staying ahead of the curve demands a solid plan that brings together the strengths of your people, technology and partners in payroll. Collaborating with outsourced payroll services and harnessing the latest tech all have a part to play, but remember to bring your people into the plan so that everyone is part of the solution.”

*Survey from SD Worx