[Global] Employers lose millions from ‘payroll leakage’

A new report, highlighting the impact of inefficient payroll systems and processes, has revealed that organisations globally are losing millions due to "payroll leakage”, HRD reports.

The report from UKG and KPMG defines payroll leakage as the "consistent, unintended financial losses within an organisation's payroll spend" because of a variety of factors.  

These could reportedly include inefficient processes, system limitations, fraud, policy deviation and exceptions, timekeeping issues, payroll transaction errors, and compliance failures.  

The report said, "Leakage is the signal that systems and processes aren't aligned; it's where inefficiency hides yet never seen as it is a distributed cost across the entire enterprise."  

In their survey of more than 300 senior global leaders, UKG and KPMG found that 38 per cent of organisations have experienced $1 million to $5 million annual leakage.  

The reasons cited for this include overpayments, duplicate payments, authorised (contra-policy) and unauthorised payments, together with operational inefficiencies.  

The report’s findings show that a leakage of just 1 per cent for an organisation with 50,000 employees could result in $10 million to $15 million in preventable losses.  

According to the report, its impact goes beyond the financial; payroll leakage can erode employee trust and job satisfaction.  

In addition, public compliance failures impact stock prices and business continuity, reduce partner confidence and overall reputational trust.  

Source: HRD

(Quotes via original reporting)

A new report, highlighting the impact of inefficient payroll systems and processes, has revealed that organisations globally are losing millions due to "payroll leakage”, HRD reports.

The report from UKG and KPMG defines payroll leakage as the "consistent, unintended financial losses within an organisation's payroll spend" because of a variety of factors.  

These could reportedly include inefficient processes, system limitations, fraud, policy deviation and exceptions, timekeeping issues, payroll transaction errors, and compliance failures.  

The report said, "Leakage is the signal that systems and processes aren't aligned; it's where inefficiency hides yet never seen as it is a distributed cost across the entire enterprise."  

In their survey of more than 300 senior global leaders, UKG and KPMG found that 38 per cent of organisations have experienced $1 million to $5 million annual leakage.  

The reasons cited for this include overpayments, duplicate payments, authorised (contra-policy) and unauthorised payments, together with operational inefficiencies.  

The report’s findings show that a leakage of just 1 per cent for an organisation with 50,000 employees could result in $10 million to $15 million in preventable losses.  

According to the report, its impact goes beyond the financial; payroll leakage can erode employee trust and job satisfaction.  

In addition, public compliance failures impact stock prices and business continuity, reduce partner confidence and overall reputational trust.  

Source: HRD

(Quotes via original reporting)