Retail giants Asda and Next have recently been hitting the headlines for failing to pay their workers correctly on several occasions.
This comes at a strange time in employment history, with the cost of living at an all time high, yet companies are famously struggling to hold on to staff following the Great Resignation which was triggered by the pandemic.
With labour demand outstripping supply in almost all sectors, payroll mistakes can be costly in more ways than one for employers.
The latest round of reports started with Next. Having introduced a new payroll system in February, many workers faced underpayment over the following months. It was also reported that staff pension contributions were deducted but not invested into retirement schemes.
The problems were causing up to 113 calls a day regarding the issues, which are ongoing but have since decreased.
“We have experienced a number of issues with our new payroll system and have been tackling them as a matter of urgency. We are acutely aware of the problems these payroll errors have caused some of our colleagues. We sincerely apologise to all those affected,” said a Next spokesperson.
Barely a day had passed after the Next payroll story, before reports surfaced about problems with Asda payroll as well. Staff reported underpayments of £100-£500, leaving workers short of funds to pay rising household bills or buy food. But underpayment wasn’t the only issue. There were also reports of overpayments which left workers short in subsequent months, as the overpayment was corrected. But also in some cases affected benefits which were reduced because of the overpayment.
The GMB union heard reports of staff skipping meals and visiting the food banks, as well as skipping bill payments which caused a reduction in their credit score and taking out loans to cover essential costs.
“It is imperative that our colleagues are paid correctly and on time and we are sorry this has not been the case for some of them. As soon as we were aware of this issue, we took action to ensure that nobody was left out of pocket,” said an Asda spokesperson.
It is a candidate’s market right now, with job vacancies higher than the number of unemployed people in the UK for the first time since records began. But despite this, a report from ONS earlier this year showed that wages were failing to keep up with rising prices.
This makes it even more crucial to retain current staff. This will be impossible if employers fail to pay staff on time, fairly, or correctly.
Small agencies often struggle with payroll as it can be a time-consuming process. But being unable to access a skilled, experienced, and dedicated HR team is a risk in the current climate. That’s why outsourcing your payroll to a specialist like JMK can help provide support where you need it most, so your team can focus on finding quality contractors.
If you would like to know more about JMK’s outsourced payroll options, get in touch with one of our team today.
Since 2002, JMK have been compliantly consolidating back-office, accountancy and payroll functions.
We have evolved to provide a range of expert services; such as Funding, becoming a leading provider to the contracting industry.
We know every agency is different in some shape or form, even if only by a little, but important bit. Combining our knowledge and experience of multiple sectors enables JMK to support you all from recruiters and payroll, through to finance, compliance and management.
With JMK as your trusted partner, even the smallest team can process the largest payroll, regardless of payroll type.
Have a look at the wide range of services our Funding can provide to you and your business, it is far more than just payroll and finance.