In today’s hyperconnected world, the reputation of a company can make or break its success. Business owners across all industries will be feeling the pressure of increasing scrutiny concerning everything, the most obvious being the quality of their products or services, but other areas such as leadership style, ethics, values, diversity, employee mental health and company benefits (but to name a few), are under the spotlight more than ever before.
One often overlooked, yet crucial function within a business, is payroll. A lack of care and poor payroll management can pose significant risks for any organisation. When employees are not paid, paid incorrectly, or paid late, the repercussions can be far-reaching. In this article, we take a look at the impact that payroll mishaps can have, and explore the ripple effects they can create.
When an employee joins an organisation, the least they expect is to be paid correctly, on time, and for their personal information to be handled privately and with care. Get any aspect of this wrong once, the trust begins to fade. If it happens multiple times, the trust is gone.
Employees talk, and with review sites such as Glassdoor giving them a platform to voice their unhappiness, word will get out not only internally, but externally too. This will do no favours for how the company is perceived, and current employees won’t want to stick around – especially when their livelihood is on the line. This leads us onto our next point…
Poor employee retention
No matter how much an employee enjoys their job, if they consistently aren’t getting paid correctly it’s more than likely that they will move on. A one off error might be forgiven, but repeated errors that affect a person’s financial situation is another story.
This can often have a snowball effect on other members of staff as word gets round and the trust starts to dwindle company-wide. This in turn can lead to increasing recruitment costs, and hiring new talent could prove more difficult than it should…
Difficulty attracting new talent
Unhappy employees and poor retention rates are likely to have a significant impact on a company’s ability to attract new talent.
Again, with the likes of social media and company review sites such as Glassdoor and Indeed, it’s easy for potential candidates to do their research before committing to a new job role. The best talent is unlikely to want to be associated with an organisation that isn’t reliable when it comes to paying their employees.
A drain on resources
Poor payroll management can be costly, and a huge drain on company time and resources. Non-compliance can lead to hefty fines, and rectifying errors will likely burden HR and finance teams. Once again, this can lead to disgruntled employees and inefficiency in terms of time that could be better spent on strategic initiatives and business growth.
When employees are unhappy at work, a lack of morale and motivation begins to show and productivity drops as a result. Ultimately, you won’t be unlocking your team’s (or your company’s) full potential, and it’s time to seek change.
What’s the solution?
If this all sounds familiar, it’s important to get to the core of what is causing these consistent errors. Has your HR / payroll team reached its limit? Has payroll become a second thought in a vastly growing company? Is your technology no longer cutting the mustard?
These are common problems, and only once you have identified the main pain points within your payroll division will you be able to consider a solution.
Below are some potential solutions that could drastically improve your company’s payroll management practices:
Payroll system health check
As technology evolves and payroll systems become more sophisticated, it can be common for some companies to get left behind with legacy systems that simply aren’t as effective as they should be.
This is where health checks can be extremely useful – they will assess whether your software is aligned with your current people structure, how well the system has been maintained, how efficient its payroll processes are, legislative requirements and security amongst a whole host of other functions. From this, you’ll soon be able to gauge what is and isn’t working for your company, and whether or not it might be time to consider an updated system.
At Phase 3, our payroll system health checks can provide you with a detailed overview of the current state of your payroll software. We’ll find the gaps in performance that can help your payroll operations excel, and address the issues that could be putting your reputation on the line.
Outsourced Payroll Providers
Another option for companies struggling to sufficiently manage their payroll is an outsourced payroll provider. This is where an external specialist takes on as much or as little of the company’s payroll function as is required, and effectively alleviates the burden placed on internal resources.
Being such a critical business function, outsourcing your payroll can give you complete peace of mind that it is being dealt with professionally month in month out, freeing up time for you to focus on growing your business. It’s a cost-effective solution that guarantees increased accuracy, mitigates compliance risk, and above all, preserves employee satisfaction while safeguarding your reputation.
Phase 3’s outsourced payroll services are provided by our team of CIPP-accredited, highly skilled consultants. With extensive expertise in the complete end-to-end process, our specialists deliver unparalleled excellence. Whether you choose to outsource a portion or the entirety of your payroll function, our dedicated team collaborates closely with your company to seamlessly and consistently handle all aspects with the utmost precision and efficiency.
By prioritising accurate and efficient payroll practices, you not only ensure the financial stability of your organisation, but also foster a positive work environment that promotes employee satisfaction and loyalty.