The payroll sector is heading towards a ‘looming skills gap’ as 40% of staff look to leave the industry within five years.

Staff want to leave the sector due to several issues, with 35% saying they regularly experience high levels of stress and pressure.

A quarter of them also felt there was insufficient investment in their careers from their employer, forcing them to seek new roles elsewhere. Just a quarter were leaving the industry due to retiring, found research from payroll software provider MHR.

Lacking the knowledge to do their jobs is sapping the confidence of 67% of respondents who are considering leaving the industry in the next five years, with just 43% of them excited about technological innovation in the industry.

Just 12% of the 400 payroll managers have been in their positions for 15 years or longer which MHR feels indicates people don’t see it as a long-term career. Additionally, 31% feel their job is not secure enough to warrant dedicating their whole working life to the role.

Jeanette Wheeler, chief HR officer at MHR said: ‘Our data is clear - it’s time for organisations to take action when it comes to supporting their payroll workers.

‘If they fail to act, then a brain drain is likely to follow. The arrival of new technology has the potential to make a career in payroll more rewarding and productive, opening up diverse and exciting career opportunities. However, this won’t happen by accident, and organisations must support employees, invest in their skills and development, and champion the function to ensure its potential is realised.’

Over half of the respondents felt that technology advancements are moving too quickly for them to keep their skills up to date, with just four in 10 feeling comfortable.

Wheeler said: ‘While investment in skills is crucial, data highlights that this will be futile unless organisations invest in the right technology too, with 38% still manually inputting data and 30% piecing data together from several different reports.

‘This lack of investment is leading to errors, with 89% of payroll workers stating there have been mistakes in the past 12 months which have led to late or incorrect payments. To help remedy this, 37% believe artificial intelligence will hold the greatest impact on the payroll function over the next five years.’

MHR go on to state that investing in the training of staff without investing in technology to streamline their jobs is ‘futile’ as many companies are still relying on processing data manually to get by. 90% of respondents said processing information this way has led to mistakes which have resulted in mistakes in employees’ payments in the last 12 months.

Over one year between 11 and 40 mistakes were admitted to taking place for 36% of payroll functions, leading to reputational damage within the company of not just the employee that made the mistake, but the entire team.

Many also believe payroll departments are undervalued and full of ‘untapped potential’ as payroll teams ‘are sat on a gold mine of data’, stressing that utilising this properly could help an organisation progress.

MHR drew on two conclusions to ensure the payroll team thrive instead of diminishing. A main pointer from MHR would be to invest in the correct technology and training for all staff but to also ‘nurture your people’ and aid them in progressing.

MHR Global research surveyed 400 payroll managers who work at companies with at least 400 staff members to get their view of the industry for National Payroll Week which runs from 2-6 September.

Visit BrAInbox today where you can find answers to questions like  How do I minimise work related stress for staff?

• Pregnant employee described as "very emotional and tearful" awarded over £350k after successful discrimination claim
• National living wage likely to rise by 5.7%
• Grenfell Tower Inquiry Phase 2 report calls for regulation reform after 'decades of failure' by government
• Suspended sentence for landlord who failed to maintain gas appliances