Regular payroll errors afflict 88% of businesses in UK

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.

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.

“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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