Nearly 90% of businesses made payroll errors in 2022

Almost half (43%) of all businesses in the study listed such inaccuracies as the biggest challenge they currently face with their payroll operations; with more than half (53%) listing the investigation and correction of errors as the most time-consuming element of their payroll. 18 days per business, per year, lost to payroll errors With 80% of respondent businesses reporting to spend at least 12 hours per month on the correction of payroll errors, the scale of the problem, and its impact on productivity, cannot be underestimated. 12 hours per month is the equivalent to 144 hours per year, or 18 days of payroll staff time effectively wasted on error correction.

New research* finds almost nine in 10 (88%) UK businesses suffered errors with their payroll that resulted in employees not being paid correctly or on time, in the last year.

Almost half (43%) of all businesses in the study listed such inaccuracies as the biggest challenge they currently face with their payroll operations; with more than half (53%) listing the investigation and correction of errors as the most time-consuming element of their payroll.

18 days per business, per year, lost to payroll errors
With 80% of respondent businesses reporting to spend at least 12 hours per month on the correction of payroll errors, the scale of the problem, and its impact on productivity, cannot be underestimated. 12 hours per month is the equivalent to 144 hours per year, or 18 days of payroll staff time effectively wasted on error correction.

Technology identified as the way forward by businesses
When asked how they could improve their existing payroll practices and greatly reduce the likelihood of such errors, half of all respondent businesses (50%) identified the adoption of new, digital payroll technologies.

The single greatest reason for not having actioned these changes is cited as a lack of resource (46%), however many businesses will likely reconsider this rationale in 2023, following the revelation that technology adoption could save time and money equivalent to 18 working days of payroll time per year.

Anton Roe, CEO at MHR comments: “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.”

Research from MHR

https://mhrglobal.com/uk/en/downloads/payroll-research-report

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