Payroll is key to the employee-employer relationship. The employer is responsible for making the process of remuneration is a seamless one. Unfortunately, this isn’t always the case – and the people impact of a poor payroll experience can be damaging.
In the lead up to this year’s National Payroll Week, we commissioned a survey of 2,000 UK employees to learn more about the quality of their payroll experiences.
We asked questions to employees across a range of industries, including financial services, manufacturing, retail, health and social care, and transport.
Amongst our key findings was that 60% have spotted a mistake on their payslip, while 39% have been paid late by their employer on at least one occasion.
We also uncovered how this affects mental and financial wellbeing, as well as the employment experience as a whole.
Mental and financial wellbeing
For employers, promoting positive mental wellbeing is essential. According to research from the CIPD:
· 80% of staff with poor mental wellbeing find it difficult to concentrate
· 62% take longer to do tasks
· 50% are less patient with customers
The positive mental wellbeing of employees has a close link with feeling financially stable, and knowing they will be paid accurately, and on-time, will contribute to this.
According to our research, around half of employees have been caused undue stress and worry after being paid late (55%) or spotting a mistake on their payslip (50%).
In addition, 40% said it made them feel unstable in their financial situation.
Financial wellbeing is high on the HR agenda, with many business running initiatives to support their staff. However, we found that due to receiving their salary later than scheduled:
· 37% could not pay direct debits and standing orders on time
· 33% wasted time trying to resolve the issues caused by missed payments
· 29% went overdrawn
· 26% had to pay bank and interest charges
· 24% experienced a negative impact on their credit rating
While easily overlooked, there is a clear link between wellbeing and being paid reliably.
Engagement and productivity
While many different factors affect productivity, stress and worry will contribute to employees being less effective in the workplace.
Perhaps it’s not a surprise that we found that after being paid late, a quarter of employees felt unengaged and demotivated.
If employees don’t believe the company is going the extra mile to provide a quality employment experience, they are likely to respond in a similar manner. This is not good news for either side.
Trust and loyalty
Successfully retaining talent is only possible if the employer builds trust and loyalty amongst staff.
For some HR professionals, the idea that providing a poor payroll experience impacts staff retention might be unthinkable. We found that being paid late made 31% of employees distrust their employer, and 48% feel that their employer simply didn’t care about them.
But perhaps most surprisingly, 21% claimed they have quit their job and moved to another employer as a result of being paid late, or after the company had made an expensive mistake with their pay and rewards.
The nature of staff turnover varies from industry to industry, and a certain level is to be expected in every organisation. However, most HR teams want to avoid any problems that damage their retention rate. A high level of churn can cause productivity issues, put business continuity at risk, and hurt the organisation’s reputation as an employer.
Developing an excellent employment experience involves many different factors, but making sure staff are paid right is certainly at the top of the list.
Making payroll a crucial part of the employee experience
We are Zellis, the market leading provider of payroll, HR and managed services. We know that innovative technology and services create better employee experiences which, in turn, leads to stronger business outcomes.
If you are looking for a way to transform your payroll and HR operations, learn more about our award-winning software, ResourceLink, or speak directly to one of our experts today to learn how we can help you achieve your business objectives.