Embrace the Change: The Hidden Costs of Avoiding the Switch to a New Payroll Software Platform

For many payroll service bureaus and CPA firms, the idea of switching payroll software feels overwhelming. Stories of painful past migrations, lost data, and drained resources have left some firms reluctant to take the leap. But clinging to an underperforming system out of fear of change is far more damaging in the long run. In today’s fast-moving business environment, where regulations and client expectations evolve constantly, delaying migration can jeopardize both profitability and growth.

Why Wait?

According to payroll software migration experts, the top five reasons that payroll service bureaus put off making the switch:

1. Fear of time it will take to migrate their current payroll data to another platform
   Many bureaus worry that the time it takes to move years of payroll data will significantly disrupt day-to-day operations and delay client services.
   
2. Concerns about making mistakes during the migration
   Payroll is high-stakes, and even small errors during a transition can result in compliance issues, penalties, or unhappy clients, making accuracy a major concern.
   
3. Not knowing how to fully train and onboard staff and clients
   switching systems requires new workflows, and bureaus often fear they won’t have the resources or expertise to get employees and clients up to speed quickly.
   
4. PTSD from previous conversions
   Past migrations that went poorly, whether due to system crashes, data loss, or delays, leave teams hesitant to go through the process again.
   
5. Fear of change
   At the core, many bureaus delay migrations simply because the status quo feels safer than the uncertainty of adopting something new, even if the old system is inefficient., an accounting, HR and payroll software provider, revealed these top five reasons that payroll service bureaus put off making the switch:

The Hidden Cost of Standing Still

When your payroll system is stuck in the past, the problems pile up fast. You're not just wasting time - you're risking hefty fines for compliance failures, missing critical deadlines, and making errors that chip away at client confidence.

But here's what really hurts: your team pays the price too. When staff are pulling overtime to wrestle with a sluggish system, burnout becomes inevitable. And burnout leads to turnover.

Consider this: replacing just one employee costs roughly a third of their annual salary. For someone on £35,000, that's over £11,000 down the drain. When you're losing experienced payroll staff because your platform can't keep up, those replacement costs add up quickly - and that's money most firms simply can't afford to lose.

The Risk of Client Attrition

Hanging on to old software doesn’t just frustrate employees - it drives away clients. Failure to upgrade to a more modern, efficient payroll platform can chip away at service quality until clients simply leave for competitors with better technology.

Such was the case for Oklahoma City’s Ludt Payroll, which spent nearly a decade using a leading accounting and payroll software program before that provider began scaling back on customer support service while raising licensing renewal fees. Further, the platform simply wasn't keeping up with trends and legislative changes that affect how payroll is managed, including the Affordable Care Act, which requires businesses employing 50 or more full-time equivalent workers to provide health insurance or risk paying a penalty.

“The limitations of our previous software precluded us from having conversations with certain prospects because we knew we weren’t able to offer them an excellent experience,” said founder Geoffrey Ludt. “If you can’t assure prospects an excellent experience, what differentiates you and your service from the next guy besides price?”

An underperforming payroll system doesn’t just hurt your existing relationships - it undermines your ability to win new business. Once switching to IRIS’ customizable cloud-based payroll software platform, Lutz noted a significant increase in capacity that would allow the company to double its payroll client base.

Waiting Only Makes Migration Harder

Many firms delay migrating because they are waiting for the “right time.” But the truth is, there will never be a perfect moment. In fact, waiting only raises the stakes. If your firm is in growth mode—or has plans to scale—migration will be exponentially harder when you’ve doubled your client base in five years.

“The longer you rely on an ineffective system, the more it drags down your staff’s productivity and raises compliance risks,” says Mario Dobles, Senior Manager, Professional Services, IRIS Software Group “It might seem overwhelming, but it’s a lot easier than dealing with the consequences and frustrations of software that doesn’t work for you.”

By postponing migration, firms are essentially betting that their outdated system won’t derail compliance, frustrate staff, or drive clients away before they muster the courage to make a switch. That is a high-risk gamble.

Conversion Doesn’t Have to Be Painful

Typically, the decision to switch payroll software platforms is made at the top. But those C-suite decisionmakers aren’t the ones doing the day-to-day heavy lifting.

“What ends up happening is a lot of pushback from staff because they know the work involved, especially if they’ve been through a difficult migration,” said Jereme Schumacher, IRIS Global’s Lead Implementation Consultant.

“One thing that really helps is bringing in the staff sooner than later so it’s not a surprise to them,” adds Dobles. “Go over all those reasons with your staff long before you start a migration project. ‘We want to increase revenue. We want to add efficiencies. We want to go after market share We want to offer more enhanced functionality.’ Get everyone excited about your firm making your next move.”

The good news is that IRIS has cracked the code of stress-free conversions. Firms can expect full conversion of their client base in three to six months, depending on complexity. For many smaller firms, the bulk of client data can be turned around in a single pay period.

IRIS offers multiple conversion models, including assisted, full-service, and onsite conversion, tailored to the needs of different firms. With an experienced implementation team, firms can convert 25–30 clients per day in some cases. That kind of speed makes the fear of endless disruption obsolete.

The Competitive Advantage of Modern Payroll Software

Upgrading to a modern, cloud-based payroll system is not just about avoiding pain. It’s about unlocking growth. With features like employee self-service portals, automated compliance updates, mobile access, and integration with broader HCM tools, the right software gives firms the agility they need to scale.

Martin Nowlin, CEO of Applied Payroll Solutions, saw this firsthand when his company switched to IRIS Global shortly after taking on 100 new clients overnight when a competitor abruptly closed shop. The onslaught quickly magnified limitations of the legacy payroll software that the company was using before making the switch.

“The challenge was not that the software wasn’t capable, it’s that it wasn’t scalable,” Nowlin said. “We did everything from A to Z. We had to enter new employees. We had to make pay rate changes. We had to change direct deposits. The client had no access to the software because it was too technical and too difficult to use. It wasn’t user friendly.”

As a result, Nowlin’s staff regularly worked 10- or 12-hour days just to keep up with payroll for the firm’s 170 clients.

“We really don’t even speak to our clients much anymore. They process their payrolls, we get a notification that it’s been approved, we push it throug to ACH and we’re done. The difference is tremendous. We used to work 10 or 12 hours a day. We work 8-hour days now. We got our lives back.”

Modern payroll software doesn’t just streamline back-office operations and lessen the burden for staff. It empowers firms to compete and win in a crowded marketplace.

“Today, our confidence level in the product and service we’re able to provide clients has skyrocketed, and our ability to sell is unlimited,” Nowlin said. “Growth of any amount just wasn’t scalable before. Now, the growth engine has started running and we’re finally saying, ‘Alright, let’s go get another 100 clients.’”

The Cost of Fear Is Too High

Fear of migration keeps many firms tied to outdated payroll systems that drain resources, frustrate staff, and cost them clients. But with downtime measured in thousands of dollars per minute, staff replacement averaging $15,000 per employee, and client attrition risks as high as 20 percent, the real danger is in standing still.

Conversion may seem daunting, but with the right partner, it is faster, smoother, and more beneficial than most firms imagine. IRIS Software Group provides proven, scalable solutions that not only ease migration but position firms for sustainable growth.

The bottom line: Don’t let fear keep you locked into an underperforming payroll system. The best time to migrate is now - before inefficiencies cost you the very clients and staff you’ve worked so hard to build. If you’re ready to make the move, Download our recent report, Seamless Transition: The Essential Guide for a Successful Payroll Software Conversion & Data Migration. Then, contact IRIS Global to schedule a product demo today.