Who hurts the most from inaccurate pay?
A nationwide Ernst & Young (EY) study showed payroll errors are costly and rampant with a traditional process. On average, a company makes 15 corrections per pay period. The average cost of fixing a single issue is $291.
EY’s research paints a bleak picture for organizations, but it’s not the full story. Behind every error on a check is a real person suffering real consequences. A Morning Consult study commissioned by Paycom revealed just how staggering the consequences are.
How do payroll errors harm employees?
Payroll errors have the potential to harm employees no matter their salary. Did you know according to LendingClub’s annual report, 42% of Americans making over $100,000 annually live check to check?
In fact, 9 in 10 U.S. employees would suffer severe financial repercussions after missing just one payday. This scenario forces people to make tough choices and even skip paying for necessities like:
- food
- child care
- medicine
- utilities
- rent or mortgages
And for an astonishing 2 in 5 employees, a shortfall with their pay could push them into situational poverty.
How do businesses prevent payroll errors?
In a survey from The Harris Poll commissioned by Paycom, over 50% of workers said they would look for a new job after experiencing any issue with their pay.
While mistakes may be inevitable, the consequences aren’t.
An overwhelming 7 in 10 employees in the Morning Consult study said they would benefit from seeing their pay early and confirming it’s right. Luckily, they don’t have to just hope for this technology.
Employee-guided payroll empowers workers to find and fix errors before payday. This stops mistakes before they threaten employees’ livelihood. It also allows HR professionals to truly focus on the “human” side of their roles.