Payrollers respond to recent ‘unacceptable’ payroll blunders

Supermarket chain Asda and retailer Next both hit headlines recently after staff were left out of pocket due to payroll errors.

Employees at Asda were underpaid by more than £500, which forced them to take out loans, skip paying bills and use food banks to get by.

It was reported that almost 11,000 errors were made in recent months by an external payroll firm, which Asda apologised for. A spokesperson added: “We have taken action to ensure nobody was left out of pocket and have worked closely with our payroll provider to resolve the issue and to ensure colleagues are paid accurately and on time.”

Meanwhile, Next recently apologised to its workforce when it emerged that workers had received months of underpayments.

According to the business, the errors were caused by a technical glitch within its new computer system.

These two separate incidents hold harsh lessons for payroll teams and employers, shining a light on the importance of communication with employees and the need to pay staff on time and accurately.

Jamie Flarry, group employee accounting manager at Champneys, concurred with this as he told Reward Strategy: “I know the odd error happens and we all pride ourselves in ensuring we pay staff correctly, but that level of errors is unacceptable from payroll.”

While some blame can be placed on the payroll software/provider that the likes of Asda and Next have in place, Sarah Goodrick-Meech, head of global payroll at Primark, shared that there is “equal responsibility” between those who are reviewing the process too.

She continued: “Those reviewing the payroll should have sufficient checks and review of calculations prior to sign off from an audit perspective. Unfortunately, in the payroll world there are many businesses that don’t invest in training for their internal payroll team and depend on their payroll provider/system to deliver an accurate payroll.”

How to avoid payroll errors

Reward Strategy launched a poll on LinkedIn to find out how these types of blunders could be avoided in the future.

56% of those who voted agreed that communication needed to be improved, while 20% said that organisations should switch to using alternative tech.

For four percent, switching back to using spreadsheets was an option, something that Flarry also agreed could be worthwhile as he said the “human touch” is still needed when paying staff.

He continued: “Over the last 20 odd years I have seen payroll processing evolving and changing, however this shows we can’t fully rely on automated payroll process and a human touch on the process is still required.”

Rachael Telford, payroll manager at the Royal Opera House, explained to Reward Strategy that additional resource is needed as she warned that many companies “deem a one-man army sufficient to cover it all and this often includes the organisations with high volume payrolls”, which can then lead to errors occurring.

Elsewhere, Jim Woodlingfield, payroll and pensions manager at Sunderland City Council, shared his advice: “Invest in training and development and continuous improvement of processes, recording and evaluating near misses.”

Legal & General’s head of customer payroll, Jeanette Hibbert, believes that reviewing processes is the key.

She concluded: “Review processes for resilience, potential for error, complexity and efficiency. How easy is it for mistakes to happen? What is the governance around the processes and what quality control is in place.”

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