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How Better Payroll Management Helps Companies With Employer Branding

Payroll Management

Payroll. For most companies it falls solidly in the “boring-but-necessary” category. All those tax forms and direct deposit details hardly seem like brand-building. But what if we told you that lackluster payroll management is like termites gnawing away at the foundation of your employer brand?

Yeah, it’s one of those silent killers no one thinks about, slowly compromising the integrity and reputation of your business. Between compliance headaches, confused employees, and costly errors, it cultivates resentment and mistrust in the one group you want on your side most: your own people.

What Is Employer Branding, and Why Do Payroll Problems Hurt It?

Alright, let’s get you up to speed on what employer branding is all about and how payroll catastrophes rain on its parade. Employer branding is basically your reputation as a place to work – what employees and future hires believe about your company culture, values, and appeal.

It’s what makes top talent seek you out as an employer of choice – or have second thoughts about hopping aboard. So where does payroll fit in? Well, erroneous paychecks, late payments, and preventable admin headaches are a surefire way to turn your people against you.

Employees talk, whether by the water cooler, on Twitter or on Glassdoor – and if you consistently get your payroll wrong, it won’t be long before your name is tarnished amongst talent (both current and potential) as well as suppliers, particularly if you are trying to obtain credit.

However, even despite the consequences, a whopping 33% of employers admit to making payroll errors, costing them (and the economy) billions of dollars each year. On top of this, roughly 14% of companies have received litigations related to payroll errors. On average, this results in $3,200 in costs and roughly 29 hours of internal time to settle. Clearly, it pays to pay accurately and on time.

Common Payroll Mistakes That Hurt Your Brand

The payroll processes for most companies resemble a tangled web of regulatory and compliance requirements. In the United States alone, the tax code spans over 74,000 densely-worded pages.

Similarly, UK payroll necessitates navigating a complex array of PAYE tax, income thresholds, gross-net pay classifications, and a labyrinth of regulations. As a result, payroll errors with regards to HMRC reporting have cost UK businesses more than £75 million since 2020. That’s a headache for even the most seasoned HR team.

Aside from the regulations, it’s easy for payroll operations to trip up. Delays from manual processes or bottlenecks mean employees don’t get paid on time. Inflexible, generalized compensation plans often don’t fit individual contributor scenarios. And changes big and small typically get pushed out with little context, confusing employees that rely on clear policy communication.

With so many chances for missteps, it’s almost inevitable that payroll errors are commonplace. Regardless, unforced errors erode trust and amplify employee dissatisfaction quickly. Employees see payroll as a signal of the value companies place on them. When it feels haphazard or compliance-driven rather than people-focused, you risk talent jumping ship and broadcasting grievances.

Steps to Improve Payroll Management

So how do we untangle this web of payroll pain points and compliance tripwires? Well, while we may not be able to eliminate complexity outright, the right tech solutions can help streamline processes. Cloud-based software automates processes company-wide, ensuring compliance pitfalls get addressed systemically.

For example, look at how tax codes like PAYE within the UK continually trip organizations up, especially the ones that rely on manual entry and siloed data. But seamless, automated UK payroll software integrates all these processes into one accurate, holistic sequence. No more waiting around for sluggish updates across scattered spreadsheets and outdated finance tools.

Along with automation, communication and flexibility keep payments feeling personalized. Segment custom compensation models based on roles rather than blanket policies detached from real needs. Notify folks directly of impactful payroll year-end changes, explaining the rationale and walking through adjustments.

Make genuine collaboration part of your payroll personnel’s responsibilities. Make sure they sync up with other departments on branding and engagement initiatives. It communicates that you don’t view payroll as strictly a back-office function, but vital to the employee experience.

The Bottom Line

Funny thing is, companies spend tons of energy on things like PR campaigns, social media faceplants, press releases reviewed by ten sets of eyes – all the usual suspects when it comes to employer brand management. But they sleep on one of the most powerful yet overlooked brand levers out there: payroll.

When you boil it down, nothing impacts talent loyalty more than getting paid accurately and on time. You can have all the added perks and benefits you want, but if you get the tax code wrong or if payments are late or incorrect, your reputation as an employer is going to take a serious hit.

It’s time to see payroll for what it is – a vital pillar of your employer brand, not just a box-ticking admin chore. Do it right, and you’ll reap dividends through stronger talent attraction, engagement, and retention, all of which are key to any successful business.

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