Connecting People with Careers

1 in 5 Employees Quits Job Over Poor Payroll Experience

September 5, 2019

According to new research commissioned by Zellis and conducted by an independent research firm, one in five Brits (21%) has changed jobs after being paid late or inaccurately by their employer, equivalent on a national scale to nearly seven million employees. The scale of the problem is significant, with 60% of employees identifying mistakes on their payslips. Additionally, 39% responded that they had been paid late on at least one occasion, after which they felt:

The employer didn’t care about their wellbeing (48%)

Undue levels of stress and worry (47%)

At risk in their financial situation (40%)

Less engaged and productive at work (25%)

The survey of 2,000 employees further highlighted the acute impact of late payment on financial wellbeing:

More than a third said they had missed payments on direct debits (37%)

A similar number said they had gone into their overdraft (31%)

A quarter said they had incurred bank charges (26%) and suffered damage to their credit rating (24%)

John Petter, CEO of Zellis commented: “I was surprised by the results of the survey, since in our experience of working with some of the UK’s largest employers on their payroll, the standards of accuracy and reliability are very high. But this research suggests our customers’ experience is atypical, and that business leaders need to champion the work of payroll professionals to ensure employees have their expectations met for accurate, on-time pay.” With an increasing trend towards employee self-service, the question of who is responsible for payroll accuracy lacks a firm answer. Only slightly more believe it is the shared responsibility of the employer and the employee (47%), than believe it is the sole responsibility of the employer (44%). However, only a quarter (24%) said that they check their payslip every month, and therefore may not always be aware of the mistakes that are made. Companies in London are the worst in the UK for paying late, with 56% of employees in the area stating they have experienced the problem, compared to a nationwide average of 39%. While the South East has the lowest incidence rate, it still stands at roughly a third (32%) of employees.

Helen Hargreaves, Associate Director of Policy at the Chartered Institute of Payroll Professionals (CIPP), commented:

“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. However, the responsibility is shared between employers and employees. Employees play a significant role in providing the payroll department with accurate and timely information; without it, the payroll department can’t fulfil its core objectives.

“But receiving accurate and timely information is only half the story. Payroll processing is becoming increasingly complex, with additional duties introduced every year. Although purchasing good quality payroll software will shoulder some of the burden, it’s crucial that payroll practitioners keep themselves up to date with all the changes to legislation, ensuring they are best placed to meet their obligations.”

The increased chance of breaching employment legislation and, consequently, of facing severe penalties and reputation damage, is another significant risk of running an inefficient payroll system. For example, according to data from BEIS, UK employers last year paid nearly £30 million in penalties and arrears due to non-compliance with national minimum wage requirements.

Petter concluded:

“Our research dispels the myth that payroll doesn’t have a strategic impact on businesses. Contribution to employee churn, a reduction in engagement and a negative impact on productivity all hit a business’s bottom line. Add to this the financial and reputational risk of legislative non-compliance, and it’s clear that payroll should be a board-level discussion.”

Source: Mark Powney, Recruitment Buzz

Link: https://recruitmentbuzz.co.uk/1-in-5-employees-quits-job-over-poor-payroll-experience/

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