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Latest NewsHR TechnologyPayroll

Regular payroll errors afflict 88% of businesses in UK

by Adam McCulloch 23 Feb 2023
by Adam McCulloch 23 Feb 2023 Photo: Shutterstock
Photo: Shutterstock

Payroll errors are endemic among UK firms with almost all organisations experiencing regular errors, research has found.

HR, payroll and finance provider MHR has conducted a study finding that 88% of businesses suffered payroll errors in 2022 that resulted in employees not being paid correctly or on time.

As a result, 80% of companies spent 12 hours or more per month on payroll error correction. Half of the respondents told researchers that they believed updating their payroll systems would improve matters.

More than half (53%) reported that investigating and correcting payroll errors accounted for the most time-consuming element of their work.

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Respondents felt that the adoption of new, digital payroll technologies would solve many of their issues but just under half said that lack of resources was holding them back in this regard. This segment said, once told they could save 18 working days of payroll time per year with better tech, that they would most likely look again at investment in better systems in 2023.

Anton Roe, CEO at MHR said that payroll mistakes could make it more difficult for employees to negotiate rises in the cost of living. He said: “Payroll errors represent not just a costly mistake to businesses, or a barrier to their growth, but also a real threat to employees up and down the country who will be relying on accurate pay to help navigate the ongoing cost of living crisis.

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“While the scale of the problem – 88% of businesses suffering payroll errors – is deeply troubling, I am heartened by the finding that half of businesses have rightly identified new payroll technologies as a means of improving their existing operations. By shining a light on this issue, and the fact that businesses are losing as many as 18 days per year to such errors, we hope to see more businesses reconsidering their position on technology adoption in 2023.”

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Adam McCulloch

Adam McCulloch first worked for Personnel Today magazine in the early 1990s as a sub editor. He rejoined Personnel Today as a writer in 2017, covering all aspects of HR but with a special interest in diversity, social mobility and industrial relations. He has ventured beyond the HR realm to work as a freelance writer and production editor in sectors including travel (The Guardian), aviation (Flight International), agriculture (Farmers' Weekly), music (Jazzwise), theatre (The Stage) and social work (Community Care). He is also the author of KentWalksNearLondon. Adam first became interested in industrial relations after witnessing an exchange between Arthur Scargill and National Coal Board chairman Ian McGregor in 1984, while working as a temp in facilities at the NCB, carrying extra chairs into a conference room!

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