Research independently commissioned in 2019 indicates that 1 in 5 British employees have resigned from positions after experiencing payroll inaccuracies. It was reported that 60 per cent of employees surveyed identified mistakes on their payslips and 40 per cent had been paid late.
Workers are not disregarding these errors as honest mistakes or impersonal clerical errors but are directly attributing them to their employers as evidence that they do not care about their employees’ wellbeing. The research reported these experiences led to significant stress and worry, putting employees financially at risk with missed payments on direct debits, bank fees, impact on credit rating and overdrafts. 25 per cent felt less engaged and productive in their work.
These results show that when payroll departments are unable to pay staff accurately and on time, the impact is not only felt on the wellbeing of employees, but on the business as a whole.'
Helen Hargreaves, associate director of policy at the Chartered Institute of Payroll Professionals
Payroll is definitely a serious consideration for high level management when it is considered that businesses face a reduction in employee engagement and productivity, reputational risks and financial penalties if they don’t get it right. To illustrate, the Department for Business, Energy and Industrial Strategy reported that UK employers paid almost £30m in penalties and arrears last year due to non-compliance with national minimum wage requirements.
Ensuring your business invests in up-to-date payroll software will reduce the administrative burden but ensuring payroll practitioners are kept up to date with legislation is paramount. In many businesses however, the task is attributed to employees who have multiple responsibilities and receive infrequent training resulting in a lack of attention to this important detail. In such instances, the solution may be to outsource payroll administration.
RSM can help with minimising the risks associated with payroll processing and are reliably in the know and compliant with appropriate legislation. Our service is foremostly a relationship – utilising industry leading technology with the experience of our payroll experts, as well as linking in with our colleagues in the tax and legal teams to offer a full compliant service.
For further information on how we can support your payroll processing, please contact Simon Balaam.