Two fifths (42%) of businesses without a BACS backup system had more than 1,000 employees.
Additionally, 29% of the 1,000 professionals surveyed believed that payroll issues contributed to their staff turnover. Nearly a third reported that BACS had failed more often than they would like.
“HR should absolutely consider having a BACS backup system to ensure payroll continuity and therefore ensure that employees are always paid on time, even in unforeseen circumstances,” Mayte Saez, senior product marketing manager at HR software Remote, told HR magazine.
“Incorporating a BACS system can be transformative for payroll systems and, most importantly, for employees' experience.”
More than half (52%) of employees reported having experienced late payments, Caxton's researchers found. A fifth (20%) of those indicated that they were unable to meet essential living costs as a result.
HR professionals should ensure that employees are paid on time, to retain staff, suggested Rupert Lee-Brown, Caxton's founder and CEO.
Read more: How to futureproof payroll
Speaking to HR magazine, he said: “Businesses out there are lacking resilience when it comes to payroll.
“A business relies on its people, so payroll problems that might leave staff unpaid can have a real impact on staff morale and retention, not to mention the personal and financial lives of employees.
“What comes through loud and clear in our latest survey is that businesses which lack payroll resilience leave themselves vulnerable to a range of externalities, and put themselves at a competitive disadvantage.”
Nearly two thirds (61%) of payroll professionals agreed that BACS was not fit for payroll on its own. The same proportion reported having spent more than 10% of their time rectifying payroll issues.
Read more: Payroll errors impact 25% of UK employees
Payroll professionals should not rely solely on BACS, according to Sylvain Grande, chief product officer at software company PayFit UK.
He told HR magazine: “BACS should be the bare minimum when it comes to paying your people. Rather than having to manually pay individuals every payday, and risk errors or delays, businesses should look to automate the running of payroll, so that wages go out on the same day every time, and are one less thing for HR teams to worry about.”
Other types of automated payroll solutions, such as Faster Payments, could ensure that employees are paid on time while saving work for HR, Grande added.
He continued: “A technology called Faster Payments allows payroll to be run the night before payday and still have employees paid on time, rather than the two business days required with BACS.
“This maximises the window that you're able to edit your payroll in, saves your business time, and further reduces the time taken to pay your workers.”
