Does payroll make your employees happy?

Posted on 2 February 2017 by IRIS FMP

Payroll plays a critical part in any business. Get it right and you’ll make your employees happy. Get it wrong and you’ll be heading for trouble. Don’t provide a simple way for those employees to get payroll errors corrected and you’re in a heap of trouble.

We did some research back in 2015 which suggested that a lot of employees simply don’t know who to contact in relation to their payroll queries. Is it HR, payroll, finance, their line manager, the MD, or some strange company at the end of a helpline?

There’s no point thinking it’s different in your company, and that everyone’s happy every payroll month. They aren’t.

Where does it go wrong? And how can you keep your employees happy?

The issues often start with how key payroll or other important information is relayed around your business. Is payroll included in the induction for new starters? Most payroll inductions usually start on day one of a new job, when alongside all the other induction paperwork a form is thrust in your face to complete with your Bank details so you can be paid. And that’s it, you’re on your own. You may get your line manager or a friendly colleague in passing telling you when pay day is, but that’s about it.

Are employees regularly updated with details of who to contact with payroll queries? – does your company use an intranet, newsletters, or put a note on the bottom of every payslip or on their payslip portal giving that advice? From what I’ve experienced for some the answer is probably not.

Employees happy

I really can’t understand why an employer or payroll professional wouldn’t want employees to know who to contact. After all payslip queries still dominate employee contact with HR (43% of all queries according to IRIS FMP research in 2015). Going around the houses trying to resolve a payroll query is one of the most demotivating things for an employee. Indeed some research in the summer of 2016 suggested a third of employees would consider looking for a new job if their employer paid them incorrectly just once, 44% would be demotivated, and 51% would lose trust in their employer. Would your employees leave just because of a few payroll issues. Maybe not, but for some it could be the straw that breaks the camel’s back.

And of course all that lost time for hard pushed payroll, finance or HR professionals, dreading the end of the month when salaries hit the employee bank accounts and the calls come flooding in. Over a quarter of employees have had six or more HR queries in the last three years, according to research amongst a thousand employees, so the numbers stack up. You can help yourself.

But if the problem is caused by overworked internal teams on a vicious spiral downwards, where queries create less time for payroll processing, creating more errors, which equals even less time for processing and so on, perhaps it’s time for senior managers to look at better internal support, new systems or outsourcing.

If nothing else, make it easy for employees to make contact with payroll queries.