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Mental Health and Financial Wellbeing Are Two Victims of Outdated Payroll Approaches Finds Caxton

Caxton, the payments solutions provider, has launched an industry report looking at the payment challenges faced by UK employees and payroll professionals. The research reveals the significant impact that outdated approaches to payroll are having on employee happiness. Not to mention the impact they’re having on business productivity and growth. The data is combined from both UK payroll professionals along with a comparative look at part-time and full-time employees.

Payroll professionals report on painstaking payday processes

Caxton conducted two separate research studies. One survey was conducted amongst 2,020 consumers in full or part-time employment. One polled 260 finance professionals responsible for payroll – both in an in-house and bureau setting. The online surveys were conducted by Walr. The research fieldwork took place between February 27 – March 2, 2023.

Seventy-six per cent of respondents responsible for payroll stated that they find the monthly payroll period to be stressful. A significant 41 per cent of their time at work is spent rectifying payroll issues. This is in lieu of doing their typical job. Furthermore, over a quarter (27 per cent) responded that they regularly communicate with their manager about the negative impact this has on their workload.

It seems that legacy systems and outdated attitudes and approaches to pay are primarily to blame and BACS is leading their list of complaints. In fact, 72 per cent of BACS users polled agree that, on its own, the system is not suitable for modern payroll. This is predominantly linked to lengthy input times and inflexible pay structures.

Many payroll professionals also believe it to be unreliable with 86 per cent of BACS users claiming it has previously failed them. A third also stated that they have to process a follow-up payment run almost every time.

Employees seeking flexible payday options to alleviate financial challenges

The Caxton report also surveyed employees in UK businesses to understand the pay challenges they face. The research shows that nearly half (47 per cent) of employees have had an incorrect or late wage paid to them. When asked about the physical or mental impact of not being paid on time or incorrectly, over 35 per cent reported feeling more anxious or stressed. Alongside this, almost a third (30 per cent) said their mental health has suffered.

The data also reflected the support offered by their employers since the cost-of-living crisis began. A significant number (29 per cent) of employees have not been offered any support at all. And, whilst the payroll function is not often known for its flexibility, three-quarters of employees would find access to earned salary in between their usual pay day to be beneficial.

 Rupert Lee-Browne, founder and CEO, Caxton
Rupert Lee-Browne, founder and CEO, Caxton

A further 57 per cent of employees claim they would choose an employer that offered ‘pay as you earn’ over an employer that does not. Nearly a fifth (18 per cent) claim it would be paramount in their decision process when choosing one company over another.

Caxton founder and CEO, Rupert Lee-Browne commented: “This research truly exposes the deep impact that archaic approaches to employee pay are having on both the payroll professionals and staff. Businesses must make payroll part of their digital transformation journey. In doing so, they can deliver dynamic new ways to support the financial health and wellbeing of their most important asset – their people.”

Author

  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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