Firms under pressure to modernise payroll systems as new legislative changes take hold

As new payroll-related provisions under the Employment Rights Bill begin to take effect, many UK businesses are falling behind in adapting their systems and processes. Global payroll provider CloudPay has warned that without urgent investment in payroll technology, companies risk being overwhelmed by ongoing and future legislative changes.

Recent changes include the introduction of Statutory Neonatal Care Pay and adjustments to Statutory Sick Pay. However, further updates are expected, and CloudPay says many firms are still unprepared.

John Pearce, chief customer officer at CloudPay, said: “The latest legislative changes in the UK may now be in force, but there’s still much more to come, and the administrative burden that payroll teams face when such amendments are announced shouldn’t be underestimated. Technology – delivered alongside the right balance of high-performing payroll people – can streamline a large proportion of this burden, but unfortunately many businesses are still struggling to find this equilibrium.

It’s now more crucial than ever that payroll functions innovate, rather than wait. Taking a reactive approach to changes that are happening across the globe is simply unsustainable and puts professionals on the back foot. Having the right balance between people and technology in payroll will provide the foundations to be agile.

Payroll needs to be nimble, adaptable and so much more in the current market. While we are seeing some innovation, there are also far too many businesses that are yet to properly invest resources and funds into the appropriate payroll technology. The return on investment on best-in-class payroll technology is significant, both financially and in terms of employee experience, which is why immediate action is needed now, to mitigate unnecessary errors and stress.”

CloudPay’s recent Tech-Talent-Equilibrium Report found that over 40% of businesses are facing significant challenges with payroll technology. Despite acknowledging the benefits of digital payroll systems, many organisations are still using outdated tools or struggling to maximise the value of the platforms they have in place.