Finity: Transforming Payroll for Talent Retention: A Digital Wake-Up Call for Recruitment Agencies

The Hidden Cost of Payroll Inefficiencies in Recruitment

For recruitment agencies handling temporary workers, payroll should be a seamless process. Yet, new research commissioned by Finity highlights a major issue: outdated technology and inefficient workflows are costing payroll teams valuable time – and even driving talent away. With 74% of payroll professionals losing at least 11 hours per week due to inefficiencies, it’s clear that recruitment businesses need urgent change.

The Scale of the Problem: What the Data Tells Us

Our survey of 202 UK temporary recruitment agencies paints a concerning picture. Among the key findings:
• 74% of payroll professionals report losing over 11 hours weekly due to inefficient technology and processes.
• 63% of recruitment agencies struggle with disconnected payroll, timesheet, and payment systems.
• 59% of respondents cite a lack of integration between payroll and banking systems as the biggest cause of administrative delays.
• 43% of companies admit to struggling to pay temporary workers on time due to inefficient technology.
• 57% of payroll professionals say they would consider switching companies for better payroll technology.

In a further piece of research carried out by Finity, 44% of the senior decision makers polled admit they have fired a payroll supplier because they were late paying their temporary workers.

With more than 1.5 million temporary workers in the UK relying on prompt payment, these inefficiencies don’t just impact payroll teams – they disrupt livelihoods and affect the broader workforce.

What’s Driving These Challenges?

The research pinpoints several common pain points:
• Lack of Integration – Payroll and banking systems that don’t communicate create administrative bottlenecks.
• Manual Workloads – Nearly half (48%) of payroll professionals are frustrated by excessive manual tasks due to limited automation.
• Recurring Errors – 45% say human errors in payroll processing contribute to delays and inefficiencies.
• Banking Barriers – Complex banking and payment processes affect 67% of companies paying temporary workers, with bulk payments, BACS deadlines, and card reader requirements being major obstacles.

These inefficiencies not only slow down operations but also increase the risk of payroll professionals leaving in search of better technology solutions.

How Recruitment Agencies Can Fix Payroll Inefficiencies

Payroll inefficiencies impact everyone - finance teams, workers, and clients. Addressing the root cause makes payroll faster, smoother, and more accurate. There are practical steps recruitment businesses can take to eliminate inefficiencies and improve payroll operations.

1. Invest in Integrated Technology
Payroll, timesheet, and payment systems should work together. Investing in a solution that integrates key back-office functions can eliminate administrative delays and reduce manual intervention.

2. Automate Manual Processes
Reducing reliance on spreadsheets and manual data entry can significantly decrease human errors and free up time for payroll teams to focus on higher-value tasks.

The role of finance professionals in the temporary recruitment sector is not easy, yet businesses depend upon these teams to deliver cost savings and efficiencies that can support all of their business objectives. 

Right now, 43% of finance professionals in temporary recruitment recognise their job would be easier, more efficient and more accurate if they had better technology at their disposal. Our survey underlines the fact that many finance teams are using technology and processes that work against them, not for them. 

Our data provides insights into the stressors and improvements that finance teams are calling for, and all of it points to a unified ecosystem where everybody wins – something we call, financial unity. Achieving this and setting it as a new industry standard will reduce frustration for back office teams, assure clients of next-level service, and reassure temp workers that they will be paid accurately and on-time, every time.

Conclusion

In a competitive recruitment landscape, payroll efficiency can no longer be an afterthought. The right technology can make payroll smoother, faster, and more reliable – not only saving businesses time but also ensuring temporary workers receive their wages on time. Recruitment agencies that embrace modern payroll solutions will gain a competitive edge, keeping their teams productive and their workforce happy.

For a deeper dive into the findings, access the full report on the Finity website: https://www.finity.co.uk/recruitment-payroll-efficiency-report-2025/