When it comes to payroll management, it’s always been important to make sure everything is handled with efficiency and effectiveness. By consistently paying people correctly and on time, you’re doing what’s right for your employees.
In today’s workforce, this issue has taken on higher priority than ever, as the best candidates and employees have choices regarding where they work – and many won’t hesitate to take their talents to a new employer if their pay is mismanaged too often.
The Significant Role of Payroll Accuracy in Your Organization
The Value of Your Employer Brand
A key element that differentiates your company from your competition, your employer brand can make or break your talent recruitment and retention success. In essence, your employer brand is how your organization is perceived by job seekers, as well as by your current employees. In addition to word of mouth and other sources, much of that perception is shaped by online reviews.
- Recent research shows that 86 percent of candidates research company reviews as they decide whether or not to apply for jobs. The most desirable candidates don’t need to read more than one or two negative comments – including any pertaining to payroll errors or mismanagement – before they quickly dismiss any consideration of you as a prospective employer.
The Turnover Hit
Another recent study further illustrates the correlation between payroll accuracy and employee retention. It reveals that 24 percent of workers would look for a new job after being involved in a payroll mistake, and 25 percent would do so after a second such issue.
- Study results further show that more skilled employees are likely to start looking for a new job sooner following payroll errors. And younger workers tend to turn more often to online reviews. From this information, you can conclude that payroll mismanagement could lead to your company losing not only in-demand, skilled performers, but also promising talent of tomorrow.
And, you’re probably painfully aware of the cost of losing even one good employee to your competition. Estimates vary, but industry experts typically place this price tag at 1.5 to 2 times the amount of an employee’s annual salary.
What’s the Solution?
Steps to take to minimize payroll inaccuracies include:
- Continuously audit your payroll. The more proactive you are, the fewer fires you’ll have to put out.
- Revisit outdated processes. Automate when possible to reduce the risk of data keying errors.
- Set goals and track your metrics. As part of your continuous improvement, revise your goals to be relevant and time-bound.
Consider Outsourcing Payroll
One out of every three employers has been charged for a payroll mistake, with total penalties reaching billions of dollars. So it’s not surprising that 87 percent of business owners outsource payroll management. To avoid the costly risks associated with payroll errors, consider a partnership with KeyHR. Our specialized experts know how to get it right – so you don’t have to worry about it, and can focus your efforts on running your business. Contact us today to learn more.
- Posted by admin
- On May 10, 2023
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