Payroll people in big companies about to walk
- Written by Tracy Angwin the CEO and founder of Australian Payroll Association
Employee-payment errors likely to continue across corporate Australia, with payroll people burnt out and set to leave their jobs
Tracy Angwin is the CEO and founder of Australian Payroll Association, Australia’s leading network for payroll professionals that offers payroll advisory, training, qualifications and consulting. She is also a non-executive director of Payroll HQ, a managed payroll service provider. austpayroll.com.au.
Burnout and leadership challenges in payroll professions are shaking up corporate Australia, and perhaps risking wide-spread employee payment inaccuracy. Recently, there has been a large rise in corporate underpayments, which is putting stress on payroll staff, particularly in large companies of more than 500 employees. With more than 25 years’ experience working in the Australian payroll sector, I have witnessed first-hand the payroll industry’s shortcomings and the need in the market – now more than ever – for on-going compliance and governance support systems.
Unpaid wages and employee entitlements have become a pressing issue in corporate Australia, with the Fair Work Ombudsman recovering a staggering $530 billion for nearly 400,000 employees in FY2022 alone. Investing in payroll teams and engaging external specialists is key to ensuring payroll accuracy and avoiding employee turnover.
Established in 2010, Australian Payroll Association is a leading industry network that has helped thousands of organisations improve their payroll processes. The network offers end-to-end payroll process reviews, advisory services and training for professionals in the payroll industry.
An independent survey of 2,178 payroll professionals, commissioned by our team, found that a staggering 46 per cent of payroll professionals at large companies are feeling the strain, compared to only 28 per cent in smaller companies. As employee payment errors loom, it's time for organisations to address these challenges head-on.
The survey discovered that 61 per cent of us work over 40 hours a week, with 41 per cent reporting burnout. Since the pandemic, more than half of us have seen our workload escalate, with the highest rates of burnout (46 per cent) and increased workload (57 per cent) observed in large companies. Although smaller businesses are faring slightly better, challenges unfortunately remain widespread across the industry, highlighting the urgent need for support and solutions.
We’ve identified lack of leadership, resources, and investment in payroll, coupled with unrealistic deadlines and expectations, as major contributors to burnout among Aussie professionals. With these challenges in mind, we predict the highest rate of job turnover in the next year to be from employees in large companies, reaching 28 per cent. In comparison, smaller and medium-sized companies will more likely face lower rates of around 19 per cent and 26 per cent, respectively.
It's evident that addressing these issues is crucial to retaining valuable payroll talent. A resounding 36 per cent of us in large companies revealed our employers fail to provide the essential support, training, and resources needed for a fully compliant payroll operation. In contrast, smaller and medium-sized companies fare slightly better, with 26 per cent and 29 per cent, respectively, still acknowledging room for improvement.
Senior management's lack of understanding regarding the essential payroll structure is a deeply concerning trend. Shockingly, numerous senior executives quietly confess to being clueless about their own company's payroll function. This ignorance poses a significant risk amid increasing wage theft laws and the potential liabilities faced by executives and directors.
The issue is exacerbated by overworked payroll teams relying on outdated technology, inadequate processes, and a lack of necessary skills and knowledge. The reliance on unchecked technology has been a leading cause of the high-profile cases of underpayment reported in recent years. It's troubling to see minimal effort invested in verifying payroll compliance, often resulting in CEOs blaming "the system" for errors.
A multitude of factors contribute to the achievement of a payroll system that is both highly productive and low risk, ensuring efficiency. Businesses of any scale can reap the advantages by engaging in expert training and consulting services dedicated to payroll, guaranteeing adherence to regulations and fostering a positive atmosphere among employees.
