31st May 2017
With a recent survey revealing that half of the US workforce, some 82 Million US Workers, have experienced Paycheck errors is there anything that can be done to improve the image of payroll?
The errors are equivalent to more than one payroll error for everyone that lives in the UK . It seems not being paid correctly is becoming the norm. And can US companies learn anything from the UK payroll experience?
The research, through the Workforce Institute, paints an interesting picture of errors found in US payroll processing, with the regulars of late and non-payments, over-payments, and incorrect payments dominating the survey responses, together with issues of ineffective technology and failure to comply with federal labor laws. Sound familiar?
The image of payroll worldwide has suffered in recent years, with high profile data breaches and thefts pouring fire on what previously would have been a protected insular part of business life. With the explosion of social media all that has changed, and employees are more willing to shout from the rooftops when things go wrong, both internally and externally.
Interestingly even when they get it right, employees still have issues, with nearly 64million American workers complaining that their pay stubs (wage/salary advice) are hard to understand.
Who’s to blame for payroll errors?
It seems that depending on who you speak with blame lies with payroll people, the software provider or outsourcer, Government and regulations, managers not signing-off timesheets, or indeed employees themselves. However, as you scratch beneath the surface you often find that time and circumstance play a large part of the failure to pay people on time.
No payroll person looks to pay an employee the wrong amount due. Payroll errors are usually created a number of ways:-
The Late submitter
This is the classic ‘Leave it till the last minute’ manager who inevitably gets the detail wrong, and leaves payroll to pick up the pieces.
This employee first picked up payroll when the company was small and it was pretty simple. Payroll formed a little part of their job but as the business has grown it’s now a monster. They just can’t cope with it all.
The Out of Depther
This person was completely on top of payroll at the beginning but as legislation and compliance issued have grown there just isn’t the technical capacity to make sure it’s all happening
No, this is not a payroll person replaced by fairies but being given a payroll system or software that look like it will process your payroll but is actually not fit for purpose.
Companies are often changing in size, shape and complexity and keeping track of the change can often create mayhem for payroll. New starters, leavers, new mergers, acquisitions, redundancies, amalgamations can all often be disruptive, leading to issues.
Serial ‘payroll’ killers
These employees are constantly on payrolls case every month with issues and problems to resolve, sucking time, and the life, out of payroll professionals in a vicious downward spiral
How do you avoid payroll errors?
1) Ensure your solution is fit for purpose
When you set up your payroll think carefully how you will manage it. Have you got enough resource internally? Is your current system doing everything you want it to do? Does reporting help or hinder you?
2) Review regularly
Regularly seeing whether your systems and procedures are robust enough for your current business situation should be a must do. Is it time to outsource, go for a part managed outsourced solution, or bring everything back inhouse with an integrated HR and payroll solution?
3) Educate, Educate, Educate
Give your employees and line managers as much information as you can, and regularly, so that employees understand their payslips better, and line managers can help deflect some of the issues. Educate your managers of the importance of submitting on time.