UK’s largest employers frequently pay their workforces incorrectly

A Censuswide survey of more than 250 HR and payroll managers, in companies of 1,000 employees in the private sector, has been carried out on behalf of MHR.

The survey was commissioned to examine if the payroll function has evolved to keep pace with the demands of the modern workplace and complexity of the process.

It found that more than three quarters of companies had 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:

• 27 percent said errors or late payments occurred one to three times, in the past 12 months.
• 12 percent said employees were paid incorrectly or late seven to nine times, in the past 12 months.
• Eight percent said they paid employees incorrectly or late 12 times, in the past 12 months.

MHR said 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 as part of their payroll process and over a third 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 and paper said it was because it had always been done that way.

David Crewe, head of service operation for outsourced payroll at MHR, said: “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.

“With payroll professionals already facing many arduous tasks and under pressure to meet compliance obligations to ever-changing employment legislation, it’s inconceivable that organisations of this size can even consider doing their payroll manually rather than with a secure, automated system.”

The full results of the survey can be found here.