The Underrated Importance of Accurate Payroll in Employee Satisfaction
On the surface, payroll may be a mundane administrative task. But accurate payroll is vital to employee satisfaction. Here's why.
Image source: Getty Images
A lot of the conversation around employee satisfaction tends to center around pay. And that's to be expected. (Regardless of anything else, you can't pay your rent with good vibes.)
But it isn't just the dollar figures on the checks that matter. It's also ensuring that those checks are accurate and on time, every single time.
A missed check can launch a cascade of problems
A paycheck error isn't just inconvenient. For the majority of people, one incorrect or missed paycheck could be enough to cause a cascade of financial disasters.
Studies suggest that at least two-thirds (and up to three-quarters) of U.S. households are living paycheck to paycheck. This means many families don't have the emergency savings to weather even a small interruption in the flow of income.
Without savings in the bank, a paycheck problem can put employees in a tight spot. This may mean missing meals or forgoing other needs. If the late paycheck means bill due dates are missed, we could be talking about substantial late fees that exacerbate the problem.
In the worst case, we could even be talking about a missed rent payment that leads to eviction.
Employees stressed about falling behind on payments -- or finding a new place to live -- aren't going to be happy or productive employees.
People want reliable employers
Even when folks aren't worried about the financial impacts of a missed paycheck, payroll problems can be a big hit to morale.
The basic covenant behind this whole "work" thing is that employees perform the agreed-upon tasks in the agreed-upon time period. In exchange, the employer pays them the agreed-upon amount of money at the agreed-upon time.
If either side doesn't hold up their end of the bargain, the whole thing collapses.
In other words: You'd probably question your employee's reliability if they stopped showing up for work. When payroll problems happen -- especially if they are recurring or unresolved -- your employees may start questioning your reliability as an employer.
How to keep your payroll rolling
Ultimately, it doesn't necessarily matter how you make payroll happen. As long as your system leads to accurate, on-time paychecks, you do you.
However, if you're not already taking advantage of modern payroll software, it could be worth a look. (Especially if you've experienced payroll issues and/or are scaling your business.)
Quality payroll software can help you avoid mistakes by handling a lot of the calculations and data transfers for you. It can even connect to your business bank account to handle the transfers. Plus, the best payroll software will integrate seamlessly with your accounting software to automate the entire process.
With a few clicks of the button, the software can tackle everything from generating accurate paychecks from employee timesheets, to initiating direct deposits, to calculating tax withholdings. This eliminates nearly all of the pain points of providing error-free, on-time payments.
Workin' hard for the money
We can talk about atmosphere, benefits, and team-building all day, but that's worth nothing if your employees aren't getting paid accurately and on time.
Even folks who aren't "in it for the money" still, you know, need the money. So, whether you choose to use payroll software, thousand-line spreadsheets, or an abacus and stone tablets, make sure you're staying on top of this all-important part of employee satisfaction.
Alert: highest cash back card we've seen now has 0% intro APR until 2025
This credit card is not just good – it's so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Brittney Myers has no position in any of the stocks mentioned. The Motley Fool recommends Flow. The Motley Fool has a disclosure policy.
