91% of companies get staff pay wrong amid furlough confusion
New research by MHR International, the HR, payroll and analytics experts, has found that frequent changes to government Covid-19 employment support rules severely disrupted HR and payroll departments, with 91% making pay errors every month over the last year.
The survey of 250 HR and payroll managers in the UK and Ireland also found that almost all businesses (94%) have run into problems processing payroll.
Nearly half of the businesses surveyed (46%) said that their HR and payroll employees had to work extra hours to process changes to furlough or employment wage subsidy schemes.
A third (33%) said the amount of payroll errors has increased and 37% said the complications distract them from other business-critical tasks.
Anton Roe, CEO, MHR commented: “Payroll and HR teams have shouldered a heavy burden during the pandemic, with changes imposed at the drop of a hat. These have required extensive knowledge of rules about furlough and employment support, National Insurance, pensions, holiday entitlements and employment status. These teams need as much support as possible from employers to increase efficiency and avoid delayed or incorrect pay. Having good payroll software in place will not only significantly improve errors made, it will reduce the pressure on these hard-working teams.”
Parallel research by MHR International of over 1,000 employees in the UK and Ireland also reveals the damaging impact of payroll mistakes on personal lives. Nearly two-thirds (65%) of workers affected by errors or late payment said they have had to borrow from friends or family or use high-cost loans or credit cards to get by. Of those paid incorrectly, 71% said it has happened as many as three times in the last 12 months.
“Regular payroll mistakes not only damage employee morale but will also impact retention and place unnecessary stress on workers”, continued Roe. “Businesses making errors that result in failure to meet National Minimum Wage requirements could also receive fines and penalties.”