By Daniel Hunter

The payroll department could be the lynchpin for talent management and employee engagement in the UK’s small businesses, according to new research from Sage UK.

Sage surveyed of over 1,000 consumers with more than a third (35%) of respondents saying they would look for a new job if their employer paid them incorrectly just once.

In addition to those who would look elsewhere for employment at the first sign of payroll issues, 51% agreed it would cause them to lose trust in their employer and half went so far as to admit payroll errors would cause them to resent their employer.

Staff morale could also be at risk, with 44% of respondents revealing that the prospect of being paid late or incorrectly would make them enjoy their job less.

“Many small businesses see payroll as a back-office process that doesn’t necessarily affect business performance. These findings challenge that way of thinking by showing that payroll can have an immediate effect on staff job satisfaction with just one misstep, and could even jeopardise recruitment,” said Jonathan Dowden, Payroll Expert at Sage UK.

“Payroll is something employers simply must get right. With a clear potential to transform staff morale, influence employee engagement and make an employer more appealing to current or future talent, it should be brought out from the shadows and into the spotlight for businesses.”

Sage’s research found payroll errors could be a thorn in businesses side when it comes to staff satisfaction and recruitment. Over three quarters (77%) of respondents stated they would tell other people if they had been paid incorrectly, while 9 in 10 respondents would be less inclined to want to work for a company or apply for a job if they heard about them paying people late or incorrectly.

With nearly one in four people (22%) reporting they have been paid late or incorrectly in the last 12 months, this should motivate companies to look after their payroll and put it front and centre of their business. Whether running payroll themselves or outsourcing, businesses remain liable for their staff’s pay meaning businesses simply cannot risk payroll going under the radar until something goes wrong.