Recruitment Payroll Teams Lose 1.5 Working Days Each Week Due To Technology Inefficiencies, Research Reveals

Infrastructure
27.03.2025 01:15 pm

A new survey of UK temporary recruitment businesses has revealed that inefficient technology and processes are significantly impacting workforce productivity.

Three-quarters (74%) of payroll professionals say at least 11 hours per week are wasted due to outdated technology and inefficient workflows.

Commissioned by Finity, a leading back-office ecosystem for recruitment businesses, the survey underscores the urgent need for businesses to invest in modern payroll technology, with nearly half (46%) of respondents claiming to waste between 16 and 30 hours per week using outdated systems – equivalent to nearly four full workdays lost every month.

The report highlights technology gaps and integration issues, with the highest number of respondents (59%) stating that a lack of integration between payroll and banking systems is causing administrative delays and inefficiencies in their business.

Manual processes are also the source of much frustration among temporary recruitment professionals: nearly half (48%) expressed annoyance over excessive manual tasks due to a lack of automation. While 45% said a major challenge of their role was due to recurring human errors and excessive time spent managing payroll processes.

In news that should concern the industry, more than half (57%) of respondents indicated they would even consider switching companies for better payroll technology, with no respondents stating they were happy with the amount of time they spend managing the payroll cycle.

Varun Monteiro, CEO of Finity, said: “The findings of our research are stark: payroll inefficiencies caused by technology and processes are not just a back-office inconvenience – they are a direct threat to productivity and talent retention.”

Despite temporary workers playing a critical role in the UK economy, the research found that 43% of companies struggle to pay temporary staff on time due to inefficient technology. Latest ONS figures show there are more than 1.5million temporary workers in the UK, so the knock-on effect of these payment delays should be of major concern.

Complex banking and payments processes affected 67% of companies who pay temporary workers, with respondents naming challenges with bulk payments, BACS deadlines, and card reader requirements as the primary culprits.

Agencies seem to experience integration issues also: 63% reported a lack of streamlined payroll, timesheet, and payment systems.

And in a further piece of research carried out by Finity, 44% of the senior decision makers polled admit they have fired a payroll supplier because they were late paying their temporary workers. This highlights the direct and significant impact late payments are having on the entire supply chain and recruitment ecosystem.

Samantha Hurley, Operations Director at the Association of Professional Staffing Companies (APSCo), commented: "These findings highlight a critical challenge facing our industry. Nearly three-quarters of payroll professionals lose more than a day's productivity each week due to technology and process inefficiencies. This represents a business cost and a strategic disadvantage in a competitive marketplace.

“The statistics around payment delays for temporary workers are especially concerning, as timely payment is fundamental to maintaining a reliable flexible workforce.

“The recruitment sector's success depends on attracting top talent and operating efficiently. When over half of payroll professionals consider changing employers for better technology, this signals a workforce ready for digital transformation.

“APSCo continues to advocate for and support members in implementing technology solutions that remove administrative burdens, drive productivity gains, and allow their teams to focus on strategic value-add activities."

Varun Monteiro concluded: “It’s not just the industry itself that is suffering: our vital temporary working economy is at increased risk of not being paid effectively and on time, which has a tangible impact on people’s lives.

“Our aim is to transform an industry that is too reliant on traditional technologies and processes that are not designed to support the rapid, and fast-paced nature of recruitment. This research supports our belief that change is needed, with Finity signalling a new era of recfintech revolution for the benefit of the entire recruitment supply chain.”