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Companies have been making additional payments throughout the month due to the rising cost-of-living, with First Time Approval (FTA) rates for payroll teams dropping last year, yet payroll teams are pressured to improve the process, according to a CloudPay report.
The PEI report has benchmarked payroll processing KPIs across over 130 countries, analysing FTA in conjunction with data input issues, payroll calendar length, supplement runs and issues per 1,000 payslips.
The report, which is in its fourth year, shows a decline in global FTA of 0.87%, with the EMEA region experiencing the greatest fall of 2% due to economic instability.
According to CloudPay, this drop in FTA rates is indicative of payroll teams making additional off-cycle payments as firms increasingly look at ways to support staff during the cost-of-living crisis.
In addition, further research from CloudPay revealed that the use of on-demand pay services last year increased, with withdrawal amounts doubling as users continued to use these solutions as digital ATMs.
Despite the fall in FTA, the PEI study reveals that payroll performance has improved overall globally, largely driven by tech innovation and better integration with Human Capital Management Systems (HCMs).
John Pearce, SVP payroll operations at CloudPay, said: “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.
“While the latest PEI report does indicate a fall in FTA, which is generally considered a catch-all KPI for payroll efficiency, this is more likely a result of businesses providing additional financial support for employees as rising costs of living impact household budgets.”
He added: “We expect that the adoption of new technology will only serve to improve pay efficiency further and, perhaps more importantly, bolster employee experiences on a global scale.”
