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HRDs say leadership doesn’t warrant payroll a board-level discussion

Despite nearly all companies understanding the risks of getting payroll wrong, close to 40 percent of HR directors (HRDs) said leadership teams aren’t doing enough to address pay problems.


New research, from payroll and HR software provider Zellis, found 36 percent of HRDs believe their organisation’s senior leadership team is not doing enough to address the potential business impact of inaccurate, late and non-compliant payroll practices.


The findings are a result of a survey, which took place this March, of 250 HRDs at large UK companies. It found that 94 percent of HRDs said their organisation’s decision makers understand the risks created by getting payroll wrong, but only 58 percent are actively implementing strategies and processes to mitigate them.


For HRDs, the most worrying consequences of poor payroll performance were:

  • Increased operational costs (cited by 81 percent);
  • Reduced employee engagement (79 percent);
  • Increased employee churn (75 percent);
  • Non-compliance with payroll legislation (67 percent).

In response to these challenges, over half (56 percent) of HRDs identified increasing the use of automation as one of their top three payroll priorities this year, along with developing a stronger compliance strategy (34 percent) and improving how they communicate with employees to receive accurate pay and benefits information (34 percent).


Nonetheless, more than half of HRDs (54 percent) said they are not currently reporting on payroll-related issues in senior leadership meetings, with the survey results pointing towards several possible reasons for this.


A third (32 percent) said they struggle with collecting and analysing data from their payroll systems, in order to create impactful performance reports. In addition, roughly a quarter (24 percent) claimed that their senior leadership team does not consider payroll strategic enough to warrant board-level discussions.


Some HRDs indicated that they would benefit from a more collaborative approach, as 24 percent agreed that the finance department should have shared responsibility for payroll performance and 16 percent said that the responsibility should be shared across HR, finance, and operations.

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