Why accurate payroll processing is critical to the growth of your recruitment agency

John receives a call from a recruitment consultant, Jenny. He’s not all that interested but listens to the pitch out of politeness. Jenny’s worked in a recruitment agency for three years and rattles off a list of assignments that can earn John a good deal of money. Not just that – he’ll be paid every week. John is sold on the idea and decides to go for it.

He goes through the onboarding process, which he feels takes too long, and submits dozens of documents. Finally, he gets an assignment he loves. Then comes payday. But John doesn’t receive any payment. He has to waste his time calling the consultant, and although it’s not his fault, they tell him that he will be paid the next week—they’ve got a specific payroll processing cycle, you see. The next week, he gets paid just half of what’s due. What do you think John will do in this case?

Perhaps he’ll show great restraint, be a pillar of politeness, and wait for the mistake to get resolved. More likely than not, he’ll raise hell, shout at a couple of people on the phone, voice his frustration with friends or colleagues, badmouth the agency, and maybe even consign all agencies to hell.

What is Payroll Processing?

Accuracy and timeliness in payroll processing is non-negotiable

While the above is an extreme example, agencies and top payroll providers are well aware of the fact that even a single payroll processing error can sour a longstanding relationship.

Not only can such mistakes alienate the candidates, but they often require time investment from the client’s side too. However, when you are dealing with thousands of timesheets a week, the chances of errors are also high. But you can keep them to the minimum – we process over 1 million timesheets annually, with 99.8% accuracy.

We have succeeded in turning around several major payroll processes for recruitment sector clients, helping skyrocket the processing efficiency. At the same time, we deliver on time, every time. This combination of accuracy and timely payments has delivered significant benefits to our clients:

1) Happier candidates and clients: 

A 2017 survey by SDWorx discovered that 88% of employees who received incorrect or delayed payments had a negative perception of their employees, while 44% considered leaving because of this experience. While these numbers reflect the feelings of permanent employees, it wouldn’t be a stretch to say that workers on temporary assignments would have equally strong feelings about late or incorrect payments.

Make sure that you pay your candidates on time, every time. And have a team that can patiently and clearly explain all the deductions and the final payment. Just getting these basics right will improve the satisfaction rates of your candidates and help you boost retention rates. Also, lesser errors equal to less to-and-fro with the clients regarding corrections – that will help you build and uphold your reputation.

2) More effective compliance management:

Recruitment agencies operating in the UK and EU need to jump through a number of hoops to do business. Not only do you need to know everything about the ever-evolving HMRC laws and legislation, but you also need to keep an eye on GDPR, AWR and IR35. A single mistake and land your agency in hot water – tax penalties being one of the issues.

So, accuracy in this area is of paramount importance. How can you ensure speedy processing while maintaining accuracy and compliance? Get a partner offering specialised payroll services for the UK –someone that knows the ins and out of UK and EU laws.

3) Insightful data to support business decisions: 

A strong payroll team can generate a wide range of bespoke reports that give you a good overview of the business. However, a good-looking report is not enough – the information that is used to build the reports needs to be accurate too. If you are sure about the integrity of the data, you can generate a wide range of reports that let you determine where you are spending too much, where you are leaking revenues, what’s hurting your cash flow and whether you are making enough profits.

Partner with a specialist payroll outsourcing company to achieve these goals

Although accurate and timely payroll is critical to the success of a recruitment agency, it is a peripheral function that often doesn’t get the attention it deserves. Even for some of the biggest agencies, payroll is often their weakest link. At QX, we specialise in high-volume payroll processing for agencies and we are the leading provider of pay & bill for UK-based recruitment agencies. Accurate and timely payroll processing is our strongest link.

Our outsourced payroll services can help you pay accurately and on time. Please get in touch with us to learn how we can help you transform your payroll.

Originally published Jul 27, 2018 12:07:16, updated Mar 25 2025

Topics: Pay & bill Process