'Catastrophic effect' | 'Distraught' staff missing mortgage & bill payments after months of errors in new £30m payroll system

'Distraught' staff missing mortgage & bill payments after months of errors in new £30m payroll system

Council employees have been left distraught and facing ‘catastrophic’ mental health concerns amid ongoing payroll system errors resulting in months of incorrect wages.

Surrey County Council has been plagued by issues relating to its payroll system, which was introduced in June 2023 to replace a previous system that was more than 20 years old, according to the Local Democracy Reporting (LDR) service.

But the new system, which reportedly cost £30m to get up and running, has resulted in pay errors ever since, with many public sector staff such as teachers and firefighters being paid either too much or too little each month – both of which have had “dire reverberations”, according to union figures.

The unions aiding staff have now warned that the issues have seen some staff missing payments on their mortgages, rent and household bills.

According to Surrey County Council Trade Unions (SCCTU) which is made up of 12 recognised bodies including Unison, NEU and Nasuwt: “All the trade unions in Surrey County Council have been helping distraught staff deal with pay errors month-on-month since June 2023.

“These errors include large overpayments and underpayments, which have had dire reverberations for the staff in question. This includes employees being unable to make payments on their mortgage, rent, cars, and utilities.

"For single parents, lower paid staff, and staff who have their wages topped up by Universal Credit, the fallout from these mistakes have had a catastrophic effect on the mental health of staff and their families.”

The union group estimates that a permanent solution won’t be found until the summer.

A spokesperson for the council told the LDR: "The recovery plan is making good progress, with the number of errors reducing significantly over time.

"We are still working through some of the issues and we are grateful to our staff and schools for both their efforts and patience as we continue to do this."

The Surrey branch of the union UNISON also claimed that around £100,000 had been handed out in emergency payments to staff whose wages have been wrong.

Payroll issues blighting UK firms

It’s not just at Surrey County Council that payroll issues are occurring. A recent study from Rippling found that HR leaders in the UK are grappling with stress, burnout, and hindered strategic work due to outdated payroll technology and inefficient processes.

The research, based on a OnePoll survey of 250 UK-based payroll managers across businesses of varying sizes, sheds light on the challenges faced by HR professionals tasked with managing payroll.

Notably, around 32% of payroll managers invest over seven days per month into the payroll process, a task that often detracts from their ability to engage in more strategic responsibilities.

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Medium to large businesses, employing 500 to 999 people, appear to be disproportionately impacted by antiquated payroll practices.

A staggering 90% of payroll managers in this segment report manually inputting data into spreadsheets on a monthly basis to ensure timely employee payments.

Consequently, a significant majority, 77%, of respondents from medium to large businesses feel that payroll management contributes to stress and burnout.

Moreover, 78% of those surveyed express frustration at being impeded from focusing on strategic initiatives due to the inefficiencies within their organisation's payroll processes.

A further 71% acknowledge the need for a change in their payroll provider, while 78% express a desire to overhaul their payroll system, albeit with apprehensions about the arduousness and duration of the process.

The study also delves into the practice of outsourcing payroll operations. Approximately 24% of businesses across all sizes resort to outsourcing, incurring an average monthly cost of £3.69 per employee.

For a company employing 2,000 individuals, this translates to nearly £90,000 annually.

This financial burden, coupled with the considerable internal resources required to navigate the intricate process, underscores the financial and operational toll of inefficient payroll management.

The importance of deploying modern technology to alleviate the administrative burdens associated with payroll management cannot be overstated.

By integrating technology that connects applications, systems, and databases, HR teams can free themselves from repetitive tasks, enabling them to contribute more strategically to their organisations' growth and success.

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