A recent Ernst & Young (EY) study underscores the financial repercussions of payroll errors in the United States. The survey reveals that one in five payrolls contains errors, resulting in an average cost of $291 per error. This financial strain is further magnified by the fact that the average organization expends resources to rectify 15 corrections per payroll period, contributing to lost revenue, prolonged hours of rectification, and potential legal consequences.
Chad Richison, CEO of Paycom, emphasizes the importance of accurate payrolls to avoid hindrances in business operations. He advocates for proactive measures, such as Paycom’s innovative self-service payroll solution ‘Beti,’ which empowers employees to detect and rectify errors before they escalate.
EY’s targeted research, encompassing companies with 250 to 10,000 employees, unveils a troubling trend. Organizations grappling with payroll errors often resort to job cuts (40%), while regulatory compliance issues result in similar actions (over 50%). The impact is not confined to financial loss; it encompasses declined employee morale, fines, and reputational damage.
The survey finds that the most prevalent errors include time/attendance and expense-related discrepancies, each costing approximately $250,000 for every 1,000 employees. The report underscores the need for precision and innovation to safeguard business prosperity.
