Employees at some of the largest organisations in the UK are regularly being paid incorrectly or late. This is according to a new Censuswide survey on behalf of HR and payroll provider MHR.
The survey of 251 HR and payroll managers in companies with 1,000 employees or more aims to evaluate the payroll function at some of the UK’s largest companies.
More than three-quarters (76 per cent) of companies admitted to failing to pay their employees correctly or on time on one or more occasions in the past year.
On average, respondents admitted that their employees had been paid incorrectly or late four times in the last 12 months.
Over a quarter (27 per cent) of respondents admitted errors or late payments had occurred one to three times in the past 12 months.
12 per cent of large companies paid their employees incorrectly or late 7-9 times with the worst offenders (8 per cent) confessing to doing so over 12 times.
The challenge facing HR and payroll teams to deliver accurate and punctual payments is compounded by the fact that over half of large organisations are still using spreadsheets (52 per cent) as part of their payroll process, and over a third (34 per cent) relying on paper timesheets.
When asked why their organisations stuck with these methods that are open to errors and miscalculations, more than half of respondents using spreadsheets (62 per cent) and paper (58 per cent) said it was because it had always been done that way.
David Crewe, head of service operation for outsourced payroll at MHR, says: “Our research shows that bigger isn’t always better, with a widespread failure of some of the UK’s largest and most successful organisations to modernise their payroll process. Worryingly many are still using outdated manual processes for gathering and inputting data resulting in an awful lot of people suffering from incorrect pay.
“This can have a profound impact on people, not only impacting their ability to pay the bills on time but affecting their overall wellbeing, morale and productivity, which over time can force them to leave their jobs.
“The responses to the survey highlight that organisations are either blind to the problems their HR and payroll teams face, reluctant to change their way of working, or simply don’t have the time to undertake a digital transformation project to fix the problem.
“It’s inconceivable that organisations of this size can even consider doing their payroll manually rather than with a secure, automated system.
“With Government plans to make tax fully digital already underway, the sooner organisations introduce new digital ways of working the better.”