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

Outdated payroll practices are penalizing organizations and emphasize the urgent need to make transformative changes in payroll management

Alight, Inc. (NYSE: ALIT), a leading cloud-based human capital technology and services provider, today released the findings of its 2024 Company Payroll Complexity Report, which revealed that over half (53%) of surveyed companies have incurred payroll penalties in the last five years for non-compliance.

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In addition to penalties, the report found 51% of those surveyed still use spreadsheets, and 19% use outdated manual or paper processes within their payroll departments.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

Organizations 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 organization operates in and the likelihood of receiving fines. Notably, 24% of organizations operating in a single country received fines. However, this percentage sharply rises to 67% for organizations 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 organization’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 minimizes risks of human errors, but also goes a long way in safeguarding both the company and promoting employee wellbeing.”

To learn more about Alight’s Company Payroll Complexity Report, download the 2024 report here.

Research methodology

The 2024 Company Payroll Complexity Report is the result of a survey completed by nearly 300 payroll professionals between July and September 2023. The survey targeted payroll professionals as well as key stakeholders with a vested interest in payroll operations in their respective companies including the number of countries companies processed payroll in, to the number of fines and penalties received for non-compliance.

This report builds on and uses the data from the 2023 Global Payroll Complexity Index to create a holistic picture of the current payroll technology landscape, including what options companies have in terms of technology, functionality and processes to optimize their payroll operations.

About Alight Solutions

Alight is a leading cloud-based human capital technology and services provider that powers confident health, wealth and wellbeing decisions for 36 million people and dependents. Our Alight Worklife^® platform combines data and analytics with a simple, seamless user experience. Supported by our global delivery capabilities, Alight Worklife is transforming the employee experience for people around the world. With personalized, data-driven health, wealth, pay and wellbeing insights, Alight brings people the security of better outcomes and peace of mind throughout life’s big moments and most important decisions. Learn how Alight unlocks growth for organizations of all sizes at alight.com.

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