The importance of payroll accuracy for businesses
Small businesses who wish to retain the best talent should focus on their payroll and financial departments, according to a new study.
Sage UK found that more than a third of employees would look for a new role if they were incorrectly paid just once while in a job.
This means that businesses who wish to keep their finest talent must be decisive with regards to how their finances are managed.
Not only do financial issues create an uncertain working environment but it can also impact on productivity and service delivery – especially if an employee’s focus is elsewhere.
More than half of staff said they would lose trust in their employer were payroll errors to occur while some even said they would resent their bosses in such circumstances.
Staff morale could also be affected as 44% of those questioned said they would probably enjoy their job less if payment was late or incorrect.
The study can therefore act as a wakeup call to some businesses who may regard payroll as simply a back-office process.
It suggests that it could impact morale with just one small error and could even jeopardise recruitment should an employee no longer trust the company.
When payroll errors do occur, more than three quarters of staff revealed they would let their colleagues know they had been paid incorrectly.
Meanwhile, 90% of people said they would not want to apply for a new role or work for a company if they discovered there were payment issues.
Nearly a quarter of staff reported being paid late or incorrectly in the past 12 months and while it may appear to be a small issue it can have far-reaching consequences.
Small firms can struggle to keep the best staff and issues relating to payments could damage their business – damaging both brands and output.
In some cases where many staff opt to leave as a result of poor financial management, the companies concerned could require business rescue just to continue trading.
At the other end of the scale though, the study highlights the positives that can result from getting the payroll right.
Engagement can be boosted, an employer can appear as a better option to fresh talent entering the job market and morale can be increased – potentially benefitting sales and productivity.
This should bring more finance into a company, helping to secure its long term future and providing solid foundations from which to grow and expand.
By Phil Smith