Professional Documents
Culture Documents
Payroll Benchmarking Survey Report
Payroll Benchmarking Survey Report
Benchmarking Survey
Sponsored by APA
and GPMI
Contents
Executive summary 03
Demographics 05
Operations 12
Outsourcing 19
Accuracy, efficiency, metrics 24
Service delivery 35
Next-gen 41
Employee experience 47
02
Deloitte Global Payroll Benchmarking Survey | Executive summary
1 2 3 4 5 6 7
Executive summary
Overview
The Deloitte Global Payroll Benchmarking Survey was open to Deloitte clients, American Payroll Association (APA) members, Global Payroll Management Institute (GPMI) subscribers, APA
Congress attendees, and other Deloitte alliance partners. The survey was taken through the lens of three geographic levels with three distinct sections offered. Respondents could
choose any combination of global, region, and country. For each grouping selected, respondents were given the opportunity to answer all questions for each individual grouping where
they had employees, unless specified otherwise. Respondents could also choose to just take the demographic section or could include one or both of the other two sections. This year’s
survey focused on questions associated with payroll across seven categories.
Survey could have been taken through the lens of Within the 3 distinct sections, data points were captured across
3 levels 7 categories
Globally
Regionally
Employee experience
Executive summary
(continued)
Overview
This year’s survey captured responses from more than 750 distinct organizations across 55 countries spanning several different industries, ranging in employee size from a few hundred to
several hundred thousand, and included over 100 questions. Explore the results of the Deloitte Global Payroll Benchmarking Survey. Where logical, we’ve broken down the responses by
industry, geography, employee population size and organizational structure to make the data relevant for different companies, providing insights into the similarities and differences
among them. One key theme from the survey from a global payroll perspective is the growing importance of developing a global payroll strategy (e.g. 88 percent of respondents either
have a payroll strategy or have plans to develop a strategy).
Next-gen
Self-Service Reporting
Compliance Accuracy Technology
Capabilities Capabilities
Adoption
And although many organizations outsource, the need to retain payroll expertise in-house remains high. Thirty percent of respondents who outsource report manual entry / loading
payroll inputs and entering manual adjustments as two of the most time-consuming aspects of payroll processing. The good news is manual loading inputs and improving accuracy limiting
the need for adjustments are two of the areas ripe for next-generation technology. Leveraging next-generation technology can free up payroll resources to focus on more strategic
activities and process improvement.
04
Deloitte Global Payroll Benchmarking Survey | Demographics
1 2 3 4 5 6 7
Section 1
Demographics
Overview
This section provides an overview of the organizations
that participated and allows us to analyze the
responses across four dimensions (industry, employee
population size, geography, and organizational
structure). This section sets the foundation for the types
of organizations that participated and how they are
structured and staffed.
10% 12% 8%
Professional Public sector Energy and
services resources
05
Deloitte Global Payroll Benchmarking Survey | Demographics
1 2 3 4 5 6 7
1K–4.9K 16%
500–999 9%
06
Deloitte Global Payroll Benchmarking Survey | Demographics
1 2 3 4 5 6 7
Typically, the larger the employee population size, the greater the number of employees payroll resources can support through economies of
scale. The respondents with an employee population size between 1K and 4.9K are operating at a low efficiency rate.
5K- 9.9K 9
1K- 4.9K 17
500 -999 5
0 10 20 30
By region
EMEA 29
North America 15
APAC 9
LATAM 4
0 10 20 30 35
07
Deloitte Global Payroll Benchmarking Survey | Demographics
1 2 3 4 5 6 7
08
Deloitte Global Payroll Benchmarking Survey | Demographics
1 2 3 4 5 6 7
20%
9%
91%
80%
1 2 or more 1 2 or more
Ninety-one percent of respondents utilize only one type of Eighty percent of respondents utilize only one type of
payroll system, while 9 percent utilize two or more systems. Time and Attendance system, while 20 percent utilize two or
This trend is consistent globally; however, in LATAM, about 17 more systems. The financial services industry has the fewest
percent of respondents use two or more systems. number of time and attendance systems, with only 9 percent
of respondents using two or more systems.
09
Deloitte Global Payroll Benchmarking Survey | Demographics
1 2 3 4 5 6 7
20%
EMEA 78% 22%
1 2 or more
1 2 or more
By region
60% 57%
50%
40%
Who owns your
timekeeping system? 30% 24%
20%
12%
10% 8%
0%
Payroll The business Shared services Finance
11% 10%
17%
Payroll The business Shared services Finance
14%
9% 8%
4%
11
Deloitte Global Payroll Benchmarking Survey | Operations
1 2 3 4 5 6 7
Section 2
Operations
Overview
• There has been a shift in the market on where Payroll reports.
Organizations are moving Payroll from reporting to Finance to either
reporting to HR or reporting to a shared service where a shared service
could report to either HR or Finance.
12
Deloitte Global Payroll Benchmarking Survey | Operations
1 2 3 4 5 6 7
10%
4%
2%
0%
HR directly Finance directly Shared Services Other
(via HR, finance, other)
60%
53%
Where does the 44%
payroll function report 40%
in your organization?
20%
3%
0%
HR Finance Other
By region
22%
31% 33%
45%
52% 78% 67% 67%
HR Finance Other
14
Deloitte Global Payroll Benchmarking Survey | Operations
1 2 3 4 5 6 7
North America still has Payroll reporting to Finance in greater than 50 percent of organizations overall.
By industry
Where does the
payroll function report Financial services 85% 11% 3%
in your organization?
Technology, media, and Telecommunications 54% 41% 5%
HR Finance Other
By employee population
HR Finance Other
15
Deloitte Global Payroll Benchmarking Survey | Operations
1 2 3 4 5 6 7
90%
85%
30%
23%
14% 13%
0%
Internal payroll Internal-to- External-to-payroll External-to-payroll External-to-payroll External-to-payroll
accuracy payroll cost vendor service HR transaction employee transaction manager transaction
and efficiency -level agreements timeliness timeliness timeliness
By region
26%
North America 28% 72%
Twenty six percent of respondents charge the cost of payroll back to the business
including added cost for exception processing.
North America had the highest percentage of respondents who charge payroll back
to the business at 28 percent.
16
Deloitte Global Payroll Benchmarking Survey | Operations
1 2 3 4 5 6 7
12 How do payroll
organizations acquire and
Years of experience
onboard the right talent?
Who is the typical 7.5 • Typically requires about four to six
payroll organization Years at current organization months to onboard credentialed
3+
employee? payroll talent
~20
Hours of training per year
17
Deloitte Global Payroll Benchmarking Survey | Operations
1 2 3 4 5 6 7
18
Deloitte Global Payroll Benchmarking Survey | Outsourcing
1 2 3 4 5 6 7
Section 3
Outsourcing
Overview
19
Deloitte Global Payroll Benchmarking Survey | Outsourcing
1 2 3 4 5 6 7
Seventy three percent of organizations outsource some aspect of payroll, with financial services, energy and resources, and
technology, media, and telecommunications organizations being the most likely to outsource.
Although 73 percent of organizations outsource some aspect of payroll, the need to retain payroll expertise in-house remains
high. Outsourcing can reduce the administrative and transactional components of payroll administration, but payroll specialists
are still needed to drive policy and decision-making.
Which geographies do
you outsource payroll?
By region
100%
81% 78%
69%
63%
50%
0%
EMEA APAC LATAM North America
20
Deloitte Global Payroll Benchmarking Survey | Outsourcing
1 2 3 4 5 6 7
5.0
EMEA, APAC, and LATAM continue to be regions where vendor consolidation is a challenge, partially due to variation in
country-specific regulatory requirements, but largely due to payroll vendors’ inability to cover each country footprint with
one technology.
21
Deloitte Global Payroll Benchmarking Survey | Outsourcing
1 2 3 4 5 6 7
While 82 percent of respondents are very satisfied or satisfied with their current third-party payroll provider, a significant
portion of respondents (most notably those with fewer than 1K employees) do not currently track SLAs. Not tracking SLAs makes
it more difficult to assess vendor performance (for example, satisfaction).
22
Deloitte Global Payroll Benchmarking Survey | Outsourcing
1 2 3 4 5 6 7
Compliance 81%
Accuracy 71%
Which of the following do
you consider the top areas Self-service capabilities 63%
of focus or improvement
Reporting capabilities 61%
relating to payroll
provider services? Technology integration 58%
Timeliness 55%
Section 4
Accuracy, efficiency, metrics
Overview
Processing payroll in-house is typically
the lowest-cost solution. Organizations don’t outsource to lower
cost; it’s typically to decrease risk, avoid building the capability in-
house because it’s hard to manage, or because of
technology limitations.
24
Deloitte Global Payroll Benchmarking Survey | Accuracy, efficiency, metrics
1 2 3 4 5 6 7
Minmal or standardization 6%
By region
North America has only 46 percent
APAC 70% 9% 18% 3% enterprise standardization as compared
with APAC with 70 percent.
EMEA 67% 16% 13% 2% 2%
Full enterprise standardization Moving towards enterprise standardization Standardization Location or Country
Standardized within business unit Minimal/No standardization
25
Deloitte Global Payroll Benchmarking Survey | Accuracy, efficiency, metrics
1 2 3 4 5 6 7
0.3
On average, how many 0.3
manual, off-cycle 0.23
payments do you
0.2
produce each month?
0.11
0.1
0.03
0.01
0
Global North America LATAM EMEA APAC
Respondents from North America processed the most off-cycle payments annually per employee at 0.3 while respondents from
EMEA processed about 1/10 of that. Global respondents averaged .23 off-cycle payments annually per employee.
Consumer and
industrial products 0.04
26
Deloitte Global Payroll Benchmarking Survey | Accuracy, efficiency, metrics
1 2 3 4 5 6 7
Recognizing there may
be exceptions, in the
majority of cases, how do 38% 6% 33% 23% 0%
you determine whether to
Case-by-case basis Next on-cycle Policy or practice As required by law
process payroll corrections
with an off-cycle Given the shift to focus on employee Regardless of
payroll run rather than experience versus process efficiency, amount
or percentage
waiting until the next organizations are likely accommodating
regularly scheduled employees by running an off-cycle
on-cycle payroll? payment or payroll run.
Regardless of
amount
or percentage
Case-by-case basis are payment Next on-cycle are payment corrections Policy or practice are payment As required by law are payment
corrections that the payroll department that the payroll department plans to corrections that the payroll department corrections that the payroll department
plans to process after the issues are process with the next normally scheduled plans to process based on the company’s plans to process only if it is required by law.
reviewed. No specific guidelines as to the payroll. No off-cycle payrolls are processed standard policy or practice for processing An example would be a termination in the
amount or a particular company policy for payment corrections. off-cycle payrolls. state or province that requires final
are followed. Instead, the issues are payment to an employee to be paid by a
reviewed, and then a decision is made to certain time.
process an off-cycle correction.
27
Deloitte Global Payroll Benchmarking Survey | Accuracy, efficiency, metrics
1 2 3 4 5 6 7
Terminations
Bonus or award
30%
10%
Terminations, as expected,
are the leading cause of
off-cycle payments, as they are
required by law in some states
(such as California). Missed or
Overpayments
Thirty eight percent of off cycle inaccurate T&A
Retroactive
payments are caused by upstream
processes. Many payroll
17% payments
organizations struggle with resolving
up stream issues. 8%
2%
28
Deloitte Global Payroll Benchmarking Survey | Accuracy, efficiency, metrics
1 2 3 4 5 6 7
$30.00
$25.00
$21.39
$20.00
$15.00
$-
North APAC EMEA
America
As employee population sizes increases, the cost per pay slip decreases, commonly due to economies of scale.
29
Deloitte Global Payroll Benchmarking Survey | Accuracy, efficiency, metrics
1 2 3 4 5 6 7
$250
$193
$200 $171
$150 $137
What is your cost per $110
employee served for $100
managed services?
$50
$-
Insourced Managed services Comprehensive Overall
Many organizations believe they can reduce cost by outsourcing payroll. Processing payroll in-house is typically the lowest-cost solution.
Organizations don’t outsource to lower cost; it’s typically to decrease risk, avoid building the capability in-house because it’s hard to
manage, or because of technology limitations.
<500 $678
United States $112
$0 $500 $1000 $1500
30
Deloitte Global Payroll Benchmarking Survey | Accuracy, efficiency, metrics
1 2 3 4 5 6 7
$250
$200 $193
$171
What is your cost $150 $137
per employee served $110
when insourced? $100
$50
$-
Insourced Managed services Comprehensive Overall
>25K $65
EMEA $198
10K - 24.9K $188
APAC $138
5K - 9.9K $280
31
Deloitte Global Payroll Benchmarking Survey | Accuracy, efficiency, metrics
1 2 3 4 5 6 7
Overall, more than 30 percent report it takes more than four days to complete payroll processing. More than 30 percent report it takes more than four days to complete payroll
processing. Respondents in North America have the shortest duration, with less than 8 percent responding more than six days, where EMEA and APAC have more than 34 percent
going more than six days. This is likely because EMEA and APAC respondents largely outsource payroll using a managed or comprehensive service model, which typically requires an
elongated processing time.
Oftentimes, the pay frequency factors into the duration, where monthly allows for a longer runway, as compared with biweekly.
32
Deloitte Global Payroll Benchmarking Survey | Accuracy, efficiency, metrics
1 2 3 4 5 6 7
EMEA 45%
LATAM 40%
How many
employees do Number of employees per payroll FTE
you have per Respondents from APAC and North America average the highest number of employees served per payroll FTE at about 1,100:1, while LATAM and EMEA
payroll FTE? lag behind significantly, averaging about 320:1. Payroll operations within organizations in the United States outpace those across the rest of the world by
almost 600 employees per payroll FTE.
1,390
1,425
1,112 1,200
1,200
760 813
600
600
341 311
-
-
Global North America APAC LATAM EMEA U.S. Non - U.S.
34
Deloitte Global Payroll Benchmarking Survey | Service delivery
1 2 3 4 5 6 7
Section 5
Service delivery
Overview
Survey respondents confirmed the growing importance of
developing a global payroll strategy—88 percent of respondents
either have a payroll strategy or have plans to develop a strategy.
This is almost a 40 percent increase from 2018 respondents.
35
Deloitte Global Payroll Benchmarking Survey | Service delivery
1 2 3 4 5 6 7
0%
2020 2018
15%
18% 11%
4%
33%
As organizations expand into several countries, Of respondents with more than 25K
it is necessary to have a overarching strategy for employees, all either have or have
payroll governance and service delivery. plans to develop a payroll strategy.
36
Deloitte Global Payroll Benchmarking Survey | Service delivery
1 2 3 4 5 6 7
Organizations understand the value of transforming HR and payroll services. These transformations manifest through vendor consolidation,
implementing new payroll workforce management solutions, or reevaluating outsourcing models.
What are the major
initiatives going on in
your organization now
that impact your 23% 45% 32%
payroll function?
HR transformation
Payroll transformation
Sixty eight percent of respondents are currently going
Other
through an HR transformation or a payroll transformation.
Organizations that are currently going through either an HR or Payroll transformation by industry
Professional services
37
Deloitte Global Payroll Benchmarking Survey | Service delivery
1 2 3 4 5 6 7
By industry
Financial services and Technology, media, and telecommunications are most commonly delivering payroll regionally. Financial
services organizations have been moving away from local support and have been consolidating services in regional centers. As Technology,
media, and telecommunication organizations expand, they are building shared service center payroll capabilities rather than relying on in-
country support for payroll.
38
Deloitte Global Payroll Benchmarking Survey | Service delivery
1 2 3 4 5 6 7
Organizational structure 6%
Cost 6%
39
Deloitte Global Payroll Benchmarking Survey | Service delivery
1 2 3 4 5 6 7
Who is primarily
responsible for 5%
answering payroll 8%
inquiries from
employees?
29% 59%
Outside of the United States, payroll inquiries are the Regional or global shared services
responsibility of a regional or global shared service
center.
Non - U.S HR in-country
The outsourcing of payroll to third-party providers is
minimal. Organizations still view answering payroll Third-party provider
inquiries as a value-added service.
11%
9%
59%
5%
75%
40
Deloitte Global Payroll Benchmarking Survey | Next-gen
1 2 3 4 5 6 7
Section 6
Next-gen
Overview
This section provides an overview of the organizations that are leveraging or considering leveraging next-gen technology
for the 4 key areas below:
41
Deloitte Global Payroll Benchmarking Survey | Next-gen
1 2 3 4 5 6 7
Respondents indicated that both their payroll and HR functions are using next-gen technologies the same amount, with 15 percent
indicating their payroll function is currently using them, compared with 14 percent for their HR function. Responses also indicate that
Is your HR or payroll 48 percent of respondents aren’t sure or currently do not have plans to use next-gen technology in their HR function, as opposed to
organization using or 41 percent when responding for their payroll function.
considering the use of
next-gen technology?
Currently using Within the next year Between one and three years More than three years Currently not planned Not sure
42
Deloitte Global Payroll Benchmarking Survey | Next-gen
1 2 3 4 5 6 7
While less than 20 percent of organizations are currently using next-gen technology, over 40 percent are planning to use it
within the next three years.
By employee population
Organizations use next-gen technology to
50%
Is your HR organization improve employee experience, compliance,
43%
using or considering and efficiency.
40%
using next-gen
technology? 30%
Larger organizations with higher transactional
26%
volumes can more easily quantify the cost
19%
20% 17% benefits of next-gen technology, which is likely
13% why they have double the percent using or
10%
10% planning to use.
0%
5K+ 1K-4.9K <1K
By employee population
0%
5K+ 1K–4.9K <1K
Seventy two percent of respondents indicated they are considering an engagement platform, while 63 percent are considering robotics
and automation but have not defined a path for getting there.
44
Deloitte Global Payroll Benchmarking Survey | Next-gen
1 2 3 4 5 6 7
45
Deloitte Global Payroll Benchmarking Survey | Next-gen
1 2 3 4 5 6 7
By industry
Industries using next- 40%
gen payroll technology 37%
35%
30%
25%
22%
21% 21%
20% 18%
17%
15% 16%
15% 14% 13%
12%
11% 11%
10% 9%
5%
0%
Consumer and Energy and resources Life sciences and Professional services Public sector Technology, media, Financial services
industrial products healthcare and telecommunications
Respondents within financial services Respondents across the industries are fairly
have a clear edge over other industries in comparable in using next-gen technology
using next-gen technologies to automate in answering employee questions, with
manual processes, with a 15 percent consumer and industrial products having a
lead over the industry with the next highest slight edge.
usage.
46
Deloitte Global Payroll Benchmarking Survey | Employee experience
1 2 3 4 5 6 7
Section 7
Employee experience
Employee experience summary
• Respondents in APAC indicate they provide 99 percent of their
workforce electronic online pay slips, while respondents
in North America indicate they provide only 92 percent of their
workforce electronic online pay slips.
47
Deloitte Global Payroll Benchmarking Survey | Employee experience
1 2 3 4 5 6 7
By region
48
Deloitte Global Payroll Benchmarking Survey | Employee experience
1 2 3 4 5 6 7
By region
Mobile
What percent of your North America
62%
Desktop
workforce currently 83%
uses mobile self-service
for payroll (such as 60%
EMEA
time entry, time-off 95%
requests, and viewing
pay slips)?
35%
LATAM
98%
48%
APAC
98%
The majority of employees are continuing to leverage desktops and laptops to manage or access payroll activities (such as time entry,
time-off requests, and viewing pay slips, etc.). However, in EMEA and North America, more than 60 percent of employees are
leveraging mobile platforms.
By industry
The industries utilizing mobile
self-service for payroll activities
are technology, media, and 77% 75%
telecommunications, with at least 67%
60%
77 percent employee adoption. 48% 48%
35%
Technology, media, Public sector Life sciences Consumer and Professional Financial Energy
and telecommunications and health care industrial products services services and resources
49
Deloitte Global Payroll Benchmarking Survey | Employee experience
1 2 3 4 5 6 7
Sixty seven percent of respondents indicate they utilize contingent workers. There is not a current trend in leveraging a payroll system to
pay contingent workers. Forty percent of respondents are using an accounting group and 34 percent are using a third-party provider
If you have a to pay contingent workers.
contingent worker
40% 34% 19% 6% 1%
group, how do you pay
these workers?
Accounting group Third-party provider Not sure Current payroll system Labor management system
50
Deloitte Global Payroll Benchmarking Survey | Employee experience
1 2 3 4 5 6 7
91%
89%
View payslip 88%
Which payroll 94%
employee self-service 82%
transactions do you Update home address
81%
50%
offer online? 76%
76%
77%
Enter time 38%
71%
76%
APAC, EMEA, and North America Request time off
87%
38%
highly leverage employee self-service. 66%
LATAM has the greatest opportunity
to improve their overall self-service 68%
Update banking elections
capabilities. While North America 13%
76%
offers the greatest amount of payment
modeling, each region has the 65%
opportunity to increase this service to 70%
View annual tax documents 25%
their employees. 80%
20%
30%
Update tax elections 0%
76%
21%
Update voluntary deductions 13%
0%
41%
6%
6%
None offered 13%
4%
0%
2%
Payment modeling or simulation 0%
15%
In addition, Deloitte provides services using a multidisciplinary coordinated approach with Human Capital including HR transformation and employee benefits; payroll tax and
accounting; and risk management. This multifunctional approach allows us to provide a dynamic perspective to our clients’ payroll issues through technical experience, thought
leadership, and innovation around core business issues: financial management, risk management and compliance, operational excellence, and transaction effectiveness
For more information on the survey or Deloitte’s Global Payroll and Workforce Management Solutions Practice and Services, please contact:
For survey specific questions, please email our US Deloitte Global Payroll Benchmarking Survey
mailbox at: [email protected]
52
Acknowledgments
On behalf of Deloitte and our sponsors, the American Payroll Association (APA) and Global Payroll Management Institute (GPMI), we would like to thank everyone who contributed their
time, experience, and insights by participating in the survey.
We would also like to thank and acknowledge those Deloitte colleagues who contributed to the overall survey initiative in a big way, including acting as subject matter advisors (SMAs),
designing, developing and running the survey, producing reports, planning speaking engagements and conference participation, writing articles, developing and running our marketing
campaign, and much more: Razeen Lakhani (Project Manager), Cheryl Ouellette and Sapna Ohri (Functional Lead and Support), Charles Williamson, Sayed Gayoor Ahmed, Sumit
Kerara, Akanksha Arora, Satish Kumar Nelanuthula (Technology Lead and Support), Maralou Billig, Alexa Bertrand, Tapasya Bhandari, Karen Grothouse and Saabira Mohamed (Risk and
Internal Process Lead and Support), Jeffrey Gross, Krithika Vidya Madiazhagan and Harish Mummadi (Marketing and Communication Lead and Support), Nick Sanchez and Tyler Hatton
(Data Analysis and Survey Report Leads), Lindsey Elliott, Cheryl Wickstrom and Naina Sabherwal (Presentation Support), Elisabeth Lee and Sukanya Sarkar (Marketing and Design), Rod
Hernandez, Arian Danian, Ronnie Gunstanson, Scott Delmar, Kathryn Charlton, David Zackery and Theresa Valentine (Payroll SMAs). A special thanks to Tyler Hatton and Nick Sanchez
for creating this report.