What happens when you pause HR and payroll tech investment? 

When outdated HR tech quietly chips away at time, trust, and strategic value, is it really saving you money? Upgrading your HR systems isn’t just a tech decision – it’s a cost-saving strategy that empowers your people and drives your business forward.

In this blog

1. Why pressing pause now could be more expensive later
2. 7 costs of delaying HR tech investment
3. Conclusion and key takeaways

Why pressing pause now could be more expensive later

From April 2025, UK employers were hit with a double blow: the National Insurance threshold was lowered, and the employer contribution rate rose to 15% – increasing the payroll burden across industries. 

It’s no wonder many organisations are hitting pause on projects. In fact, business investment dropped by 3.2% in Q4 of 2025 alone. And this was before all the current changes that are impacting the global economy and spending. But here’s the thing: while it might seem like a safe option to put a hold on digital transformation, there’s a quiet cost to delay. And it doesn’t show up in board meetings…until it does.

In fact, recent research from Deloitte has found that organisations adopting a long-term transformational approach to cost resilience can achieve significant savings of up to 40%. And this starts with the areas we often overlook: the everyday tools and systems that underpin HR.

7 costs of delaying HR tech investment

1. The silent cost of payroll errors and inefficiencies

Did you know that UK companies lose an average of £150,000 a year to payroll errors – errors that can lead to underpayments, overpayments, or worse, HMRC penalties.

But that’s just the visible cost. What you don’t see as easily are the hidden hours spent correcting those mistakes, the missed opportunities to use that time strategically, and the frustration bubbling under the surface in your workforce.

And the payroll errors are just the tip of the iceberg. Without unified payroll and HR systems, data lives in silos, updates are missed, and people-related decisions are made based on outdated or inconsistent information. 

Whether it’s a miscalculated pay run, a missed visa expiry date, or an inaccurate headcount report – these issues snowball fast. They create operational drag, erode employee trust, and tie up valuable people in firefighting tasks instead of strategic work.

While these costs rarely appear on a balance sheet, they’re felt every day: lost time, reputational damage, disengaged employees, and poor planning that leads to last-minute costs (like agency fees or overtime payouts).

That’s why accuracy matters more than ever. Payroll software, matched with a bespoke HR platform, like those offered by Zellis, bring a level of precision that’s hard to replicate manually. Especially when supported by tools like real-time timesheet entry, geo-tagging, and shift-based pay automation.

These work together to ensure pay runs are accurate, timely, and fully aligned with hours worked, without the need for manual checks or guesswork.

The result? Fewer errors, fewer corrections, and a payroll process that works the way it should – efficient, accurate, and cost-conscious from start to finish.

2. The cost of tying up talent in admin

Your HR and payroll teams are packed with expertise and potential – but unfortunately, that energy can easily get lost in a sea of admin with legacy systems. They spend their days juggling spreadsheets, rekeying data between platforms, or running back-and-forth checks to make sure that one dodgy formula doesn’t derail the entire pay run.

That’s not operational excellence – it’s death by a thousand microtasks.

In fact, according to PayrollOrg’s 2025 Future of Payroll Report, most payroll teams still operate in a transactional mode, unable to shift into strategic territory because of time and technology constraints.

And it’s not just HR and payroll teams. Finance and Ops are all stuck in reactive mode when they should be modelling workforce scenarios, forecasting labour costs, and contributing to the business strategy they’re meant to support.

The irony? Modern payroll and HR platforms are designed precisely to eliminate this burden and enhance business value through human resources. 

3. The rising cost of staying compliant

Compliance is a lot of things, but patient isn’t one of them. And it certainly doesn’t wait for your HR and payroll systems to catch up or for spreadsheets to be manually updated.

With everything from statutory sick pay and minimum wage changes to visa checks and the Working Time Directive, the rulebook keeps evolving – and it’s a lot to stay on top of.

And yet, many organisations are still trying to keep up with Excel spreadsheets and outdated systems, often with the best intentions of being cost-conscious.

But the result? A constant undercurrent of risk. We’re talking missed deadlines on right to work checks, backdated National Minimum Wage corrections, misclassifications on IR35 status – all of which carry hefty penalties. In fact, an approximate 16 million pounds a year are lost in compliance costs across the UK. That’s a lot of money when we are trying to save every pound.

But, modern HR and payroll systems, such as Zellis, are built with evolving compliance in mind. They update automatically, flag anomalies and potential breaches, and provide a digital trail – keeping things nice, clean, and compliant – and saving money while you’re at it.

It may seem like a little thing, but the money saved can go a long way. It’s a tech update that, in our opinion, cannot be missed. 

 4. When poor employee experience hits your bottom line

As the C-suite, it’s completely natural to view HR tools as part of the background tech stack. But for your employees, these systems are often the most tangible representation of how you operate.

Your HR tech is your employer brand experience. It’s the digital front door to your company culture. When systems work well, they make people feel seen, supported, and respected. When they don’t, it sends the opposite message – intentional or not.

When pay is inaccurate, shifts are changed last-minute without notification, and people can’t see their schedules or manage time off easily, it erodes trust. And when trust goes, so does morale, engagement, and ultimately, retention. And we all know how expensive turnover can be.

However, modern HR technology helps fill that rabbit hole by giving employees more control and transparency. 

And we aren’t just talking about self-serve portals that allow them to check their hours, view payslips, request leave, and pick up available shifts without chasing managers or HR. Investing in advanced HR and employee experience technology like ELLA – a 24/7 AI-powered HR Assistant – empowers your employees with autonomy, clarity, and immediacy.

With ELLA, employees can ask questions about their pay, shifts, leave entitlements, and policies at any given time, without waiting for HR to be available.

This matters more than ever. Especially for shift-based, frontline, or hourly workers who, let’s be honest, are disproportionately impacted by admin inefficiencies and pay mistakes. Investing in tech that supports their experience isn’t just operationally smart – it’s a retention strategy. 

5.  The risk of being left behind on AI-enabled tech

While some organisations are still debating the ROI of AI in HR upgrades, others are already using AI to leap ahead (71% of UK HR teams are currently investing in AI for HR). 

See, AI not only reduces pressure on HR teams by providing a more responsive employee experience that mirrors the on-demand convenience people expect in every other part of their lives. But, as AI accelerates adoption across HR functions, those holding off risk falling behind. 

AI is all about agility. Whether it’s missing the chance to automate and personalise onboarding journeys, enhance employee engagement through advanced reporting, or cut down on labour costs with smart scheduling, delaying AI adoption means missing out on efficiencies your competitors are already banking.

It also increases the risk of overloading your existing HR team, who will be expected to deliver more value with less support. Without AI-enabled tools, that’s a tough ask – and one that can quietly chip away at performance, morale, and ultimately, retention.

In short: AI in HR isn’t coming. It’s here. And it’s fast becoming a key part of any cost-conscious, forward-thinking, agile HR strategy.

6. The price of overlooking smarter HR insights

The most damaging effect of doing nothing? It’s not just the errors, inefficiencies, or compliance risk. It’s the missed opportunity to elevate HR from an operational function to a strategic driver.

With the right HR and workforce management technology in place, your HR leaders can influence profitability, productivity, and performance through people data. 

They can model different labour scenarios. Optimise rosters to reduce overtime, partner with Finance to forecast costs more accurately, pinpoint areas with high turnover or burnout risk and proactively intervene.

But this kind of forward-looking, strategic support is tough to deliver without the right tools. As a matter of fact, 70% of HR professionals without integrated systems say they struggle to provide timely data to business leaders.

When data is fragmented or slow to surface, strategic decisions end up being delayed, or worse – based on guesswork. However, investing in connected, intelligent systems helps your HR function step out of the back office and into the role of a proactive partner that drives real savings and growth.

Because ultimately, transformation isn’t just about doing things faster. It’s about doing the right things, at the right time, with the right insight.

7. Escaping contract and tech uplift costs

Another cost that often flies under the radar? The gradual uplift of existing tech contracts. 

A common situation that many organisations tend to find themselves in is being locked into contracts that come with annual price increases, rising support costs, and additional fees for new features, which, quite frankly, should be included in the overall product by now.

Add-on modules, additional admin users, licensing changes, or new compliance requirements – and before you know it, what was once a dependable system starts to feel more like a cost centre. Especially when you’re paying for bolt-ons to keep up with things that modern platforms already do as standard.

Now might actually be the most strategic time to review your HR tech stack. With budgets under scrutiny and organisations focused on value, switching to a more integrated HR system might not just be about better functionality, it might be about better cost control too.

It’s not about ripping and replacing. It’s about gaining more from your investment. Something that could save you thousands in the short and long run.

Conclusion: HR tech isn’t just operational – it’s strategic infrastructure

For the business to move forward, the days of HR tech being a back-office system for admin must be left in the past. In today’s environment, HR technology is a strategic infrastructure. It’s how you deliver workforce agility, maintain compliance at scale, and make people decisions that are directly tied to business outcomes.

When your systems work together – when payroll, time, attendance, learning, etc. are all connected – you move from reactive to predictive. You’re not just tracking what happened last month, you’re identifying risks early, testing scenarios before they hit, and making data-driven decisions in time to actually do something about them.

Meanwhile, when you delay transformation, you don’t just delay speed or efficiency. You delay agility. You delay your HR cost reduction strategies. And you delay your ability to respond proactively to challenges that are already at your door.

So instead of saying “Let’s look into upgrading our HR tech next quarter,” ask yourself:

What is doing nothing actually costing us?

Because in most cases, the real risk isn’t in moving too quickly. It’s in not moving at all.

Want to stop the silent costs of outdated systems? See how Zellis can help you modernise HR and payroll without the complexity. 

Key takeaways

• Delaying HR tech upgrades often creates hidden costs, from payroll errors and compliance risks to missed opportunities for strategic decision-making.

• Manual admin drains HR talent, leaving little time for workforce planning, cost forecasting, or business partnering.

• Compliance slip-ups are expensive, but modern HR systems help reduce risk with real-time updates, built-in checks, and audit trails.

• Your HR tech shapes your employee experience – because when your HR and payroll systems fail, trust, morale, and retention take a hit. 

• AI-enabled tools like ELLA free HR to focus on people, not process, helping automate admin, surface insights, and support employees 24/7.
• All-in-one platforms reduce the cost and complexity of legacy systems, streamlining operations while delivering more value for money.

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