Business owners’ poor management of payroll is preventing their company from growing as well as it could, a new survey suggests.
Software company IRIS Software Group found that 29% of business owners think payroll requires too much of the time, with 25% agreeing that the amount of time spent managing payroll affects business performance.
A further 25% said they can’t keep up with other staff demands due to the time they have to dedicate to payroll processes, and a similar number suggested the amount of time spent managing payroll is preventing them from developing business opportunities.
With payroll impacting overall business performance, the study indicates that pressure to remain in business during the Covid crisis has meant managing payroll has become more difficult. Two in five business owners (38%) think payroll is more stressful now than before the pandemic, with just under half (48%) making changes to how they manage processes in the past nine months in an attempt to free-up time to focus on stabilising and growing their business.
Of those surveyed that furloughed staff, over half (59%) have had to make changes to how they manage payroll as a direct result of the pandemic. One in five have changed their payroll system entirely. A further 17% have started outsourcing payroll and 7% have moved to using more automation such as cloud-based or digital software.
Despite these numbers, payroll has been found to be a key driver for employee happiness. Four in five (81%) of the payroll professionals survey said whether or not the business gets payroll done correctly directly impacts their employees’ happiness. Of those who reported this, 94% have had to make changes to how they manage payroll as a result of the pandemic.
Nick Gregory, chief marketing officer at IRIS, said: “As we move into the next normal, business leaders need to have the bandwidth to work on their business, not in it. There is a way to take the pain out of managing payroll and turn it into something that doesn’t result in stressed payroll professionals, unhappy employees or businesses struggling to move forward with confidence.
“Harnessing automation and cloud-based software quietens the noise coming from payroll. And it gives leaders peace of mind that the ever-increasing complexities around payroll are being handled appropriately. This, in turn, means they can focus on investing in staff and growing their business.”