A new report has been published by Finity, the back-office ecosystem for recruitment businesses, examining the efficiency of technology and processes in place in the UK’s recruitment sector, and how these are in turn impacting workforce productivity, for better or for worse.
The Finity report revealed that 74 per cent of payroll professionals say at least 11 hours per week are wasted due to outdated technology and inefficient workflows. Furthermore, 46 per cent of all respondents, 200 finance professionals working in the temporary recruitment sector, claimed to waste between 16 and 30 hours per week using outdated systems, equivalent to nearly four full workdays lost every month.
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.”
Reasons for dissatisfaction
The report highlights technology gaps and integration issues, with the highest number of respondents (59 per cent) 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: 48 per cent expressed annoyance over excessive manual tasks due to a lack of automation. Meanwhile, 45 per cent 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 per cent) 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.
Affecting all workers
Despite temporary workers playing a critical role in the UK economy, the research found that 43 per cent of companies struggle to pay temporary staff on time due to inefficient technology. Latest ONS figures show there are more than 1.5 million 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 per cent of companies that 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 per cent reported a lack of streamlined payroll, timesheet, and payment systems.
And in a further piece of research carried out by Finity, 44 per cent 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.
Digital transformation is a key indicator for retaining talent
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.”
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.”
