COMPLIANCE
Managing payroll with precision, efficiency and care
Payroll can be a complex juggling act with many moving parts, but it’s so much more than just another spinning plate. Jakub Zmuda, director of strategy at Modulr, considers why payroll matters and how it can deliver results for businesses
R esearch by Sage has found that businesses spend an average of 120 working hours per year on administrative tasks, with payroll being a significant contributor to this overhead. Could a different approach to processing payroll help? The simple answer is, yes! A payroll solution that reduces errors and cuts processing time by combining the efficiency and simplicity of automating payments with the speed of Faster Payments can deliver results where it matters most. The human impact of payroll Payroll is ultimately about people. With salary being a critical touchpoint in employee satisfaction, companies can’t afford to pay staff late, get salaries wrong, or expect their employees to give them a second chance. An article by the Global Payroll Association (GPA), Beyond numbers: empowering people through payroll transformation, estimated that in 2023, a third of the UK population were living payday to payday. In such circumstances, the consequences of late or incorrect payment do have a real impact on individuals. The GPA study also revealed that more than a quarter (28%) of UK workers have struggled to manage their finances – such as paying rent, mortgage, or bills –
due to receiving incorrect pay, with 59% of employees experiencing a negative impact to their mental health due to payroll errors, according to Zellis research. With rising costs, particularly during times of inflation, it’s easy to see why accurate and timely payroll is vital. SDWorx also identifies the impact of inefficient payroll processes on businesses, with poor reputation, low employee retention and an inability to attract new talent found to be the main risks. The cost on payroll professionals Bearing the weight of this reality means additional pressure on payroll professionals. UHY Hacker Young estimates the cost of payroll errors for UK firms to be in the region of £700 million each year. Frequent regulatory changes are difficult to keep up with and 60% of professionals find this challenging, according to the CIPP (https:// ow.ly/WRes50SCequ). The detail-orientated and diligent payroll professional now faces the consequences of errors. This is not only from employees expecting to be paid accurately and on time, but also from the business to prevent employee turnover, fines and a poor reputation in the industry. This imposing list only serves to underline the importance
of offering payroll teams the ability to meet this challenge with all the benefits technology now offers.
“With the importance of getting payroll right, the last thing
Seasonal payroll pressure Where payroll teams feel these pressures most acutely is around atypical events and shortened working weeks that require different working patterns. This might also include annual leave taken over summer, bank holidays or national holidays and around the festive period. This means unusual working patterns for some companies need is the employees handling it to be dealing with chronic workplace stress”
| Professional in Payroll, Pensions and Reward | September 2024 | Issue 103 28
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