The Incidence & Impact of Payroll Management Mistakes

Anybody can make a mistake but some are more costly than others, in more ways than just financially. A new in-depth study by global payroll provider Remote has revealed how alarmingly-common payroll mistakes really are and how they can have devastating impacts on both employees and employers.

The study involved surveying the experiences and opinions of over 2,500 employees, who were selected from a wide variety of sectors and demographics in Germany, the USA and the UK. In excess of 1,300 professionals from the HR and payroll management sector were also surveyed.

The key finding from the study was that more than half of the employees who responded to Remote's survey said that they had experienced an issue with their pay during their career, with 40% reporting that an error had occurred within the past year. More than one in ten (11%) employees had experienced a payroll mistake in the previous month (September). 18% of those surveyed had suffered the effects of three or more payroll errors.

Other findings from the Remote survey included:   

  • The most common issue with payroll was underpayment, with 42% of employees reporting that this had happened to them. 24% had received their due payment later than expected while around 10% of people had been overpaid.
  • Underpayments and late payments were found to have a wide variety of negative effects. 47% reported feeling stressed and anxious while 65% said that the error had caused them to be unable to pay vital bills. 
  • 32 of people who had experienced payroll errors said that these had negatively impacted how much they trusted their employer. Employees in the UK were revealed to be the most likely to 'change their opinion of their employer', with less than half saying that their relationship with that employer has stayed the same after the mistake (compared to 64% of German employees and 53% of USA employees). 
  • When surveying payroll management and HR teams, the Remote study found that an overwhelming 95% of employers acknowledged that payroll errors had negative impacts on employees, though just 24% thought that the impact was 'significant'.
  • 49% of HR teams said that they spent five or more hours a month correcting errors.
  • Of those HR decision makers who had decided to outsource payroll management, over 71% felt that doing so had had 'a positive impact on accuracy'.   

The sheer amount of errors reported proves beyond all doubt that managing payroll is a challenging, time-intensive process. That's why you need an expert, BACS-approved payroll bureau like Bachmann Group to help. Find out more about the gold-standard payroll management services we offer by browsing our website or getting in touch with our team.

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