The fourth edition of the worldwide Payroll Efficiency Index (PEI) study was just released by CloudPay, a top provider of worldwide payroll solutions. The PEI report compares payroll processing KPIs from over 130 different nations, including first-time approvals (FTA), data entry problems, payroll calendar length, supplemental runs, and issues per 1,000 payslips. The findings are based on over a million payslips produced between January 1 and December 31, 2022, by companies using a centralized payroll infrastructure that allows for the measurement of these benchmarks.
For the first time in the report’s history, this year’s findings show a drop in FTA on a global scale; the United States, however, was the only nation to have an increase in FTA. With 2.9 days, the United States also had the shortest payroll calendar.
The decrease in FTAs across the board suggests payroll teams are expanding off-cycle payments as businesses increasingly seek out ways to support employees during uncertain economic times. The use of on-demand pay services surged last year, with withdrawal amounts doubling as consumers continued to use these solutions to manage their cashflow, according to additional information from CloudPay. A high decline of 2% in the EMEA region is mostly responsible for the overall decline in the FTA rate.
The PEI analysis demonstrates that payroll performance has increased globally despite the decline in FTA, mostly due to technological advancement and better integration with Human Capital Management Systems (HCMs). Through this link, the complete pay cycle may be approached in unison, resulting in better efficiency from payroll to payment.
Globally, payroll data input mistakes decreased by 3.6%, with the United States showing the most improvement with a 10.32% drop in problems over the previous year. Issues per 1,000 payslips decreased to an all-time low of 8.64, according to the PEI, which is also a global average. These advancements are unquestionably a direct outcome of technological and software advancements in the payroll industry.
According to John Pearce, SVP Payroll Operations at CloudPay, “the overall positive picture that we’re seeing in payroll performance is reflective of an increased desire and, indeed, ability, to innovate the pay process due to better tech integrations and a more joined-up approach on a global and local basis.” Delivering a cutting-edge pay experience that is flexible, supported by technology, and easy for users to use is a primary focus for global payroll teams.
While the most recent PEI report does show a decline in FTAs—generally regarded as a catch-all KPI for payroll efficiency—this is more likely due to employers giving extra financial assistance for workers since growing expenses of living have an impact on household budgets. The adoption of new technologies, according to CloudPay, is only going to serve to boost employee experiences globally and further increase pay efficiency.