Research: payroll challenges in the retail sector

Research shows more than 60 percent of UK retail employees have received incorrect pay

Zellis

Dec 20th 2019

20 December 2019, LONDON – As they approach the busiest week of the year, new research indicates that retailers are facing an additional challenge to motivate, retain and support the wellbeing of their staff, in the form of the financial stress caused by incorrect and late pay. This is alongside other difficulties such as the growth in online competition and falling demand on the high street.

A survey of 650 British retail employees, conducted by Zellis, reveals that over half (61 percent) have noticed mistakes with their pay, while nearly a third (29 percent) claim to have been paid late on at least one occasion.

The impact of being paid incorrectly or late has a direct impact on the financial wellbeing of these employees, as 32 percent have failed to pay direct debits, 29 percent have gone overdrawn on their bank accounts, and 25 percent have been forced to pay bank and interest charges. A recent study from Neyber revealed that retail is one of the sectors most affected by financial wellbeing problems, with 68 percent of its workers suffering from money worries.

The survey from Zellis indicates that the financial stress caused by a bad payroll experience creates rifts in the employer-employee relationship, with 35 percent saying that it made them start to distrust their employer and 32 percent saying it made them feel their employer didn’t care about their wellbeing.

With the sector already heavily affected by productivity and skills concerns, a further 32 percent of employees said that it made them less engaged and motivated at work, while 15 percent said they have left at least one retail role as a result of a poor payroll experience.

Helen Hargreaves, Associate Director of Policy at the Chartered Institute of Payroll Professionals (CIPP), commented: “In the retail sector, where levels of staff turnover are high, shift patterns are seasonal, and large numbers of employees receive the National Minimum Wage, running a reliable and sophisticated payroll function is no easy task. With staff working extra hours and overtime at this time of year, retailers must guarantee the right information is communicated to the payroll team so that each person receives their fair pay for the work completed. January is a notorious month for poor financial wellbeing, so these companies would do much to boost employee trust and engagement if they ensure December payslips are accurate and on-time.”

John Petter, CEO of Zellis said: “In the midst of the busy winter period, retail businesses must take stock of whether their current payroll and HR systems are suited to handling the complexities of their workforce. Rigorous and ever-changing employment rules, especially those which relate to pay and benefits, are being more strongly enforced than ever before. Non-compliance can cause a myriad of unnecessary financial, reputational and HR problems for retailers that are already under significant pressure due to squeezed margins, rising costs, and low consumer confidence.”

Petter continued: “Unfortunately, increased competition, combined with a drive to cut costs, could be contributing to underinvestment in the back office systems which are vital to the wellbeing of employees on the ground. But if retailers want to preserve a strong high-street presence – which itself must be underpinned by a happy and engaged workforce – this is a problem which needs to be urgently addressed in 2020.”

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