Research findings

Workforce skills concerns

How to increase cost-efficiency

New technology and productivity

Existing payroll and HR systems

Resorting to workarounds

Workforce skills are a key area of concern

We asked our respondents which areas of payroll and HR caused them the most concern.

Workforce skills and capabilities were the most commonly cited issue, with 37% telling us that was their main worry.

Respondents were also concerned about out-of-date technology and colleague recruitment and retention (both mentioned by 31%).

Properly equipping colleagues with the skills they need is another pressing issue for organisations. Lack of skills can lead to human error, and slower processes as teams scramble to fix issues.

More time spent fixing errors makes a department less productive, as resources are diverted to handling problems.

Our respondents are also concerned about cost-efficiency (24%), and compliance challenges (23%).

Only a small proportion of respondents (8%) said they had no current concerns.

The key to cost-efficiency, as seen by public sector managers

It’s easy to see why our respondents picked out better technology as a key driver for solving challenges. Tools such as self-service and automation reduce the workload on teams. Colleagues from other departments can get answers to their concerns through self-service, reducing support tickets. Meanwhile, smart automation streamlines daily workflows, speeding up processes and freeing up employees’ time to handle other mission-critical tasks.

Our respondents are looking to better technology to solve their problems, with 50% telling us that more advanced payroll and HR software features would help their operation run more cost-efficiently.

Other solutions that our respondents said would improve cost-efficiency include:

Increasing cloud-based solutions and reducing IT infrastructure needs (39%)
Streamlining operations, for example by sharing services or standardising processes (35%)
Lowering staff headcounts and associated costs (24%)

More agile, streamlined operations reduce the need for repetitive work (such as entering data twice in different systems), and reduce the risk of accidentally building a complex and cost-ineffective technology stack.

Can new technology boost productivity?

Our respondents certainly think so: 44% saying integration of new technologies such as AI would help their payroll and HR teams to be more productive.

Better automation is also seen as a solution to productivity problems, with 38% of respondents saying that automating HR and payroll workflows and manual processes would boost productivity.

The results also flagged up better training and skills development (35%) and more effective management and leadership (31%) as key drivers of team productivity.

The picture emerging is a holistic one. The public sector managers surveyed clearly identify a need for better technology, but this is one of a wider set of factors that have the potential to raise the productivity bar.

Most payroll systems could be better

We asked respondents to rate their current payroll systems on a scale of 1 (worst) to 5 (best.) The results showed that most payroll systems are passable at best, but with plenty of room for improvement.

34% rated their systems 4 for ease of use, with only 27% rating them 5. When it came to being up to date, 35% rated their system 4, with only 19% rating them 5.

Payroll systems continued to fall mostly in the ‘4’ rating as we looked at:

Cost-effectiveness (30%)
Accuracy and reliability (30%)
Efficiency and automation (32%)
Scalability and adaptability (32%)
Reporting and analytics (32%)

The results also show a significant number of people aren’t satisfied with their payroll solution, with 18% rating their system only 3 out of 5 for ease of use, and 21% giving the same rating for cost-effectiveness.

Out-of-date technology can also impact productivity and efficiency. Doing their jobs well while wrangling technology that isn’t quite fit for purpose is a challenge for colleagues.

Other ratings of 3 out of 5 included:

Accuracy and reliability (20%)
Efficiency and automation (20%)
Scalability and adaptability (18)
Reporting and analytics (17%)

These figures are significant enough to show the need for improved systems. Outdated or inefficient systems will only add to the pressures facing public sector organisations and hamper attempts to maximise cost efficiency.

We asked our respondents what solutions they were using to make up for shortcomings in their main system.
We learned that a significant proportion are turning to technical workarounds using either the main system (46%) or spending on secondary software (42%) to fill gaps where their software isn’t doing everything they need it to do.

44% told us they’re using manual workarounds such as spreadsheets, paper forms, and manual data entry, while 40% are hiring extra people or having existing team members spend time troubleshooting.

These figures paint a picture of HR and payroll teams piecing together solutions using spreadsheets, paper forms, and workarounds to get their system to do everything they need it to do. The more additional steps a team has to take, the greater the room for errors, inconsistencies, and inefficiencies.

Pieced-together solutions create gaps that information can slip through, and bottlenecks where one part of the system relies on a workaround. Each mistake can trickle down and affect other parts of the process. The result is less efficiency and cost-effectiveness, and greater risk of errors and compliance failings.