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Payroll Problems May Undermine Employee Experience, Finds Workforce Institute at Kronos Survey
[June 06, 2017]

Payroll Problems May Undermine Employee Experience, Finds Workforce Institute at Kronos Survey


Payroll problems may be the fastest way to send top talent to the exits. According to a new survey from The Workforce Institute at Kronos Incorporated, about half of the American workforce (49 percent) will begin searching for a new job after experiencing just two issues with their paycheck, an alarming rate that highlights the fragility of a carefully cultivated employee experience if organizations can't first deliver on core business processes.

Part two of the "Engaging Employees through Payroll" series surveyed more than 1,000 U.S. employees to examine the hidden costs of payroll errors and explore the vital role payroll professionals serve in building an engaging employee experience. Part one revealed payroll problems affect 82 million U.S. employees, which is more than half (54 percent) of the American workforce.

News Facts

  • Little patience for problems: nearly half of American workers (49 percent) will seek new employment after just two payroll mistakes, such as being paid late or incorrectly.
    • Approximately one in four employees - 24 percent - will look for a new job after the first payroll mistake, while another 25 percent will seek new employment after the second issue.
    • Salaried employees are more likely than hourly workers to start looking for a new job after the first problem (29 percent versus 19 percent.)
    • Nearly a third of parents (30 percent) will kick off a job search after the first error (compared to 16 percent of non-parents), while men (29 percent) are more likely than women (17 percent) to do the same after just one issue.
  • Effective managers are vital: employees look to their direct supervisor before anyone else for help, making this a critical role to resolve pay issues through effective guidance.
    • More than one in four employees (26 percent) say they would first turn to their manager, direct supervisor, or boss for help fixing a mistake.
    • About one-fifth of employees (19 percent) would report their payroll problem directly to their human resources department, while 14 percent would turn to their payroll department.
    • Surprisingly, seven percent of employees say they would not report a payroll error to anyone. Just four percent are not sure who they would turn to for help correcting a paycheck error.
  • Generational differences exist: Baby Boomers are most forgiving of payroll errors and have the deepest understanding of their paychecks.
    • Nearly half (44 percent) of American employees aged 55 and older say they would stay at their job as long as they are eventually paid correctly. That's in stark contrast to their colleagues aged 18-29 (13 percent,) 30-39 (17 percent,) and 40-54 (27 percent,) who are much less willing to stay even if they're eventually paid correctly.
    • Just 19 percent of Baby Boomers find the taxes and deductions on their paycheck confusing to read and understand. They once again outperformed othe generations, as 45 percent of employees aged 18-29 found their paychecks confusing, while more than half (53 percent) of employees aged 30-39 were confused, along with 38 percent of those aged 40-54.
    • While 43 percent of employees aged 18-29 and more than half (52 percent) of employees aged 30-39 have been forced to make a late payment on a bill such as a credit card, car loan, or home/apartment due to a payroll problem, just one in ten (11 percent) Baby Boomers report having ever encountered a similar situation.
  • Everyone wants a raise: an overwhelming majority of U.S. workers feel they deserve an annual pay raise.
    • According to the survey, 84 percent of all employees expect a pay raise each year they stay with their organization, with hourly (85 percent), salaried (83 percent), young employees aged 18-29 (81 percent), Baby Boomers 55+ (81 percent), female (88 percent), and male (80 percent) respondents in nearly universal agreement.

Supporting Quotes

  • Joyce Maroney, director, The Workforce Institute at Kronos (News - Alert)
    "Although organizations are making significant investments in benefits, rewards and recognition, physical workspaces, and other areas to help deliver an engaging employee experience, many payroll professionals are still burdened with manual processes and outdated technology. Just a single payroll error has the potential to encourage top talent to seek new employment, undoing tireless work to build an engaged workforce. Replacing legacy payroll tools with a unified human capital management cloud platform will create a rock-solid foundation for all other employee experience initiatives by helping payroll improve accuracy, process payroll quicker, and ultimately use their tremendous knowledge to take on a more strategic role building engagement and mitigating risk within the organization."

Supporting Resources


About Kronos Incorporated
Kronos is a leading provider of workforce management and human capital management cloud solutions. Kronos industry-centric workforce applications are purpose-built for businesses, healthcare providers, educational institutions, and government agencies of all sizes. Tens of thousands of organizations - including half of the Fortune 1000® - and more than 40 million people in over 100 countries use Kronos every day. Visit www.kronos.com. Kronos: Workforce Innovation That Works.

Survey Methodology
Please cite the above research as "Part two of the Engaging Employees through Payroll survey series" by "The Workforce Institute at Kronos Incorporated." This online survey was conducted by Regina Corso Consulting on behalf of The Workforce Institute at Kronos Incorporated between Feb. 23-28, 2017 among 1,013 employed U.S. adults, aged 18 and older. Figures for age, gender, education, income, and region were weighted to bring them into line with their actual proportions in the U.S. population. Because the sample is based on those who agreed to participate, no estimates of sampling error can be calculated. For more information on the survey methodology, please contact daniel.gouthro@kronos.com.

© 2017 Kronos Incorporated.¬†All rights reserved.¬†Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. See a complete list of Kronos trademarks. All other trademarks, if any, are property of their respective owners.


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