Just two payroll errors can cause 49% of employees to start job hunting

Dive Brief:

A new survey from The Workforce Institute at Kronos Incorporated shows that 49% of American workers will start a new job search after experiencing only two problems with their paycheck. The survey's conductors say this statistic shows how fragile employee engagement is when employers fail to carry out core business functions.
Part one of Engaging Employees through Payroll found that 82 million U.S. employees — or 54% of the American workforce — are affected by payroll problems. Part two of the survey looked at the hidden costs of payroll errors and the role payroll professionals have in creating an engaging employee experience.
The survey compared the effects of payroll errors on men and women. Men (29%) are more likely than women (17%) to leave their employer after just one payroll error. A third of working parents (30%) will start a new job search after the first error compared with non-parents (16%).

Dive Insight:

A previous Kronos study showed similar results, but also addressed the effect of payroll errors on classes of workers. The results showed that with 87 million Americans admitting that they lived paycheck to paycheck, paycheck errors further exacerbated problems for those waiting for their next paycheck.

More than a third (37%) said they were forced to pay late their mortgages, credit cards, car loans and other expenses. Gig workers fared worse than salaried or hourly workers, as 20% of them were underpaid and 20% were paid late. Payroll errors can cause the kind of anxiety and uncertainty that might drive workers to look elsewhere for work.

With just one payroll error capable of driving employees to start job-hunting, employers must adopt intervention strategies to prevent a mass exit. Logging hours correctly has historically been an issue, as well, which may play into some payroll problems.

HR can monitor payroll processes and move quickly to see that errors are corrected and communicated to affected workers and their managers. Employers who proactively address and correct problems might earn workers' trust and retain them.