Payroll proficiency is sputtering in the heart of Europe. With an average score of 64.6, only a minority of companies in Belgium, France, Germany, the Netherlands and the UK would call themselves true masters in payroll. That’s one of the main conclusions of our 2022 Payroll Proficiency Index. On the upside, there are some powerful proficiency boosters.
In the 2022 Payroll Proficiency Index (PPI), more than 1,300 small, mid-sized and large companies shared their insights on what makes payroll easier or more difficult. In total, we assessed 6 proficiency drivers: legislation, reward, technology, capability, workforce and partner. These 3 clearly came out on top as having a positive impact.
Some manage their payroll on automatic pilot, others still break out in cold sweat every month. To which group you belong largely depends on your access to adequate payroll expertise, knowledge and experience. Basically, you have one of 2 options: either you put dedicated people on payroll who receive regular training and the right tools – the UK way – or you contract a payroll partner – the Belgian way. There are hybrid solutions as well, such as outsourcing only those payroll subprocesses that cause you the biggest headaches.
What’s not a desirable long-term plan? Doing everything in-house and undervaluing the payroll profession, as is the case in many German companies. Now that payroll is becoming increasingly complex, safeguarding capability should be a key priority.
It’s no secret that managing a payroll in Europe is a time-consuming and error-prone task. Moreover, slip-ups often have far-reaching consequences, such as hefty fines and high correctional costs. Luckily, payroll software has developed in such a way that it can take over various payroll processes, such as collecting data, registering attendance, creating reports and handling declarations. The outcome: less mistakes and more data insights. Mainly Belgian, British and Dutch companies are big tech fanatics because of these benefits.
Using scalable, integrated and cloud-based payroll solutions, however, isn’t a given in every country. France still largely depends on on-premise systems, while a majority of German companies fail to see the return on investment.
It’s no coincidence that countries with the highest levels of (legal) payroll complexity, such as France and Belgium, feel most positive about outsourcing. Alone, payroll is a constant uphill battle. With a sidekick, you’re better equipped to monitor and interpret legal changes. But outsourcing also offer great added value for these payroll processes, according to the companies in our 2022 PPI: calculating payroll, collecting and integrating data, managing transfers to governments, and handling payroll documents.
The more companies realise payroll outsourcing isn’t a one-size-fits-all formula and payroll outsourcing makes sense in the new normal, the stronger the proficiency boost will be in the next years. Partners provide a welcome counterweight for increasing complexity.
We’ve listed the most striking facts and figures in country profiles for Belgium, France, Germany, the Netherlands and the UK. SD Worx payroll experts provide additional insights in each of the country profiles.
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