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As National Payroll Week hits its stride, HR, payroll, and finance expert MHR is drawing attention to the profound impact that inefficient payroll systems can have on their business resiliency, Business Leader reports.
MHR research revealed that in an organisation with 500 employees, payroll errors could cost businesses £150,000 annually. With a potential recession on the horizon, such an unnecessary expense is something many organisations simply cannot afford.
This issue is reportedly one that is widespread; more than nine in ten (91 per cent) businesses across the UK and Republic of Ireland admit making payroll errors every month.
MHR has therefore shared four actionable steps that businesses can take to build an effective payroll system that eliminates these errors and improves operational efficiency:
- Eliminate human error with automation
Payroll has relied on legacy technology for many years and nearly three-quarters (72 per cent) of organisations continue to use dated manual processes, despite the availability of technology for automated and real-time payroll.
With fewer manual workflows, data entries and calculations, there is a much lower risk of human error. For example, an automated process avoids duplicate data entries into multiple systems, ensuring HR, payroll and finance teams are all on the same page.
A digital solution provides better accuracy and frees up much-needed time that employees can spend elsewhere on more business-critical tasks. In fact, 36 per cent of respondents in MHR’s research said that manual payroll systems distracted them from critical business tasks.
- Improve financial wellbeing
The transparency provided by real-time payroll engines gives businesses an up-to-date view of their employee data. With this, HR, payroll and finance teams can make more informed business decisions, improve accuracy of reporting and crucially any potential errors can be spotted, investigated and corrected before payday.
Data inaccuracies and payroll errors have consequences. Of those respondents who had experienced incorrect or late pay in the last year, over a third (35 per cent) had to borrow money from family members or friends and a quarter (25 per cent) struggled to pay essential bills. Unhappy employees are not afraid to act in their best interests; half (50 per cent) of respondents said they would consider switching roles if they experienced repeated payroll errors.
- Remain compliant
Legislation is constantly changing, making it difficult for professionals to keep up, especially when procedures need updating manually. Payroll teams need to stay on top of environmental changes too, with black swan events, such as the pandemic or the looming recession, capable of having significant knock-on effects on payroll.
Digital solutions are scalable and can be adapted to match specific business and regulatory requirements and respond to changes in the market. When technology is steering the ship and driving a company’s compliance, businesses will be more resilient to market shifts and be far less likely to be caught out by legislative breaches and their associated costs.
- Outsource payroll
Nine in ten (90 per cent) organisations surveyed by MHR run their payroll in-house. Yet, when asked how they might improve their processes, half (50 per cent) said they would use a managed or part-managed payroll service.
By outsourcing payroll to the experts, businesses can reportedly benefit from at least 98 per cent accuracy, providing a significant reduction in errors compared to the average in-house process and freeing up valuable time within the business.
In addition to the savings in cost and improved accuracy of outsourcing payroll, businesses can also benefit from expert advice, with a third (34 per cent) of organisations agreeing external vendors can provide guidance on improving internal processes.
Mark Jenkins - CFO at MHR - said, “It is staggering that so many organisations are still doing their payroll manually given the risk of human error and the huge amount of time and resources it takes to complete. These errors – such as a late payslip – have consequences, and can do great harm to an employee’s financial wellbeing.
“With so many businesses admitting to making such mistakes every month, the need to transition to an automated process is clear.”
Source: Business Leader
(Quotes via original reporting)
As National Payroll Week hits its stride, HR, payroll, and finance expert MHR is drawing attention to the profound impact that inefficient payroll systems can have on their business resiliency, Business Leader reports.
MHR research revealed that in an organisation with 500 employees, payroll errors could cost businesses £150,000 annually. With a potential recession on the horizon, such an unnecessary expense is something many organisations simply cannot afford.
This issue is reportedly one that is widespread; more than nine in ten (91 per cent) businesses across the UK and Republic of Ireland admit making payroll errors every month.
MHR has therefore shared four actionable steps that businesses can take to build an effective payroll system that eliminates these errors and improves operational efficiency:
- Eliminate human error with automation
Payroll has relied on legacy technology for many years and nearly three-quarters (72 per cent) of organisations continue to use dated manual processes, despite the availability of technology for automated and real-time payroll.
With fewer manual workflows, data entries and calculations, there is a much lower risk of human error. For example, an automated process avoids duplicate data entries into multiple systems, ensuring HR, payroll and finance teams are all on the same page.
A digital solution provides better accuracy and frees up much-needed time that employees can spend elsewhere on more business-critical tasks. In fact, 36 per cent of respondents in MHR’s research said that manual payroll systems distracted them from critical business tasks.
- Improve financial wellbeing
The transparency provided by real-time payroll engines gives businesses an up-to-date view of their employee data. With this, HR, payroll and finance teams can make more informed business decisions, improve accuracy of reporting and crucially any potential errors can be spotted, investigated and corrected before payday.
Data inaccuracies and payroll errors have consequences. Of those respondents who had experienced incorrect or late pay in the last year, over a third (35 per cent) had to borrow money from family members or friends and a quarter (25 per cent) struggled to pay essential bills. Unhappy employees are not afraid to act in their best interests; half (50 per cent) of respondents said they would consider switching roles if they experienced repeated payroll errors.
- Remain compliant
Legislation is constantly changing, making it difficult for professionals to keep up, especially when procedures need updating manually. Payroll teams need to stay on top of environmental changes too, with black swan events, such as the pandemic or the looming recession, capable of having significant knock-on effects on payroll.
Digital solutions are scalable and can be adapted to match specific business and regulatory requirements and respond to changes in the market. When technology is steering the ship and driving a company’s compliance, businesses will be more resilient to market shifts and be far less likely to be caught out by legislative breaches and their associated costs.
- Outsource payroll
Nine in ten (90 per cent) organisations surveyed by MHR run their payroll in-house. Yet, when asked how they might improve their processes, half (50 per cent) said they would use a managed or part-managed payroll service.
By outsourcing payroll to the experts, businesses can reportedly benefit from at least 98 per cent accuracy, providing a significant reduction in errors compared to the average in-house process and freeing up valuable time within the business.
In addition to the savings in cost and improved accuracy of outsourcing payroll, businesses can also benefit from expert advice, with a third (34 per cent) of organisations agreeing external vendors can provide guidance on improving internal processes.
Mark Jenkins - CFO at MHR - said, “It is staggering that so many organisations are still doing their payroll manually given the risk of human error and the huge amount of time and resources it takes to complete. These errors – such as a late payslip – have consequences, and can do great harm to an employee’s financial wellbeing.
“With so many businesses admitting to making such mistakes every month, the need to transition to an automated process is clear.”
Source: Business Leader
(Quotes via original reporting)