Payroll Mistakes & How to Avoid Them
When it comes to managing payroll, absolute accuracy is a must. Though this should be obvious, payroll mistakes happen all the time and they can cause serious problems for employees and employers alike. Remote, a global payroll provider, recently carried out a large survey that revealed the true extent of the issue.
More than 2,500 employees from the UK, US and Germany were surveyed by Remote about their experiences of payroll mistakes. The respondents represented a wide and diverse array of different demographics and industries. In addition, over 1,300 payroll management and HR professionals were surveyed.
Perhaps the most alarming finding from the Remote survey was that over half of respondents had experienced a payroll mistake. Four out of ten respondents said that such an error had occurred within the past 12 months while 11% had experienced a mistake in the past month. A shocking 18% of respondents had experienced three or more errors in the calculation of their pay.
By far the most common payroll mistake was that of underpayment: 42% of respondents to the Remote survey had been underpaid due to a payroll management error. 24% of people said that they had received a due payment late. The least common experience was overpayment, with 10% mentioning that they had been overpaid.
Late payments and underpayments had the greatest impact on employees. 65% of respondents said that this experience had left them unable to pay bills on time and/or purchase essential items. 47% of employees said that a mistake of this type had caused them significant stress and anxiety.
Employees' trust in their employers was strongly affected by payroll management mistakes, with 32% of respondents saying that they trusted their employer less after the error. UK employees were the most likely to lose trust in their employer; under half of UK respondents said that their relationship with their employer was unchanged after a payroll error. This compares to 53% of employees in the US and 64% of employees in Germany.
95% of those working in HR and payroll management acknowledged that errors in payroll impacted employees negatively. Of this group, only 24% believed these impacts to be 'significant'. Just under half (49%) said that they spent more than five hours each month correcting payroll mistakes.
Managing payroll in-house is risky. It is a highly-specialised field and those working within it must be aware of constantly-changing tax rules, legislation and regional variations. It is a far better option to outsource the entire process to a skilled, dedicated and BACS-approved payroll bureau like Bachmann Group. In fact, Remote's survey found that a massive 81% of HR decision makers who had opted to outsource payroll management found that it had 'a positive impact on accuracy.
You can find out more about our reliable, cost-effective payroll management service on the Bachmann Group website. If you have any questions, please do not hesitate to get in touch with our team.
