Nearly 40% of Employers Suffer Millions in Preventable Losses

New study finds major financial impacts from workforce management issues

Mar. 31, 2026 at 2:36pm

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A photorealistic studio still life featuring a stack of business documents, a calculator, and a pen arranged on a clean, white background, conceptually representing the abstract challenges of payroll, compliance, and workforce management.A minimalist studio still life highlighting the financial and operational risks of ineffective workforce management practices.Lowell Today

A new joint study by workforce management software provider UKG and accounting firm KPMG has found that nearly 40% of employers suffer millions of dollars in preventable losses each year due to workforce management challenges like compliance violations, payroll errors, and inefficient scheduling.

Why it matters

The findings highlight the significant financial toll that workforce management issues can have on businesses, especially as companies navigate an increasingly complex regulatory environment and tight labor market. Improving workforce management practices could help employers avoid costly penalties and boost productivity.

The details

The study, which surveyed over 1,000 HR and finance leaders, found that the average employer loses $3.5 million annually due to preventable workforce management issues. The most common problems cited were payroll errors, compliance violations, and inefficient scheduling leading to overtime costs. Larger organizations with over 5,000 employees reported average annual losses of $8.1 million.

  • The study was conducted in the first quarter of 2026.

The players

UKG

A leading provider of workforce management and human capital management software solutions.

KPMG

One of the 'Big Four' global accounting and professional services firms.

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What they’re saying

“Workforce management issues continue to plague employers, leading to significant financial losses that could be avoided through better processes and technology.”

— Brian Reaves, Chief Belonging and Diversity Officer at UKG

“Improving workforce management is a critical priority for businesses looking to boost productivity, ensure compliance, and protect their bottom line.”

— Lynne Doughtie, U.S. Chair and CEO of KPMG LLP

What’s next

The full study report will be released in the coming weeks, providing more detailed insights and recommendations for employers.

The takeaway

This study underscores the significant financial impact that workforce management challenges can have on businesses of all sizes, highlighting the need for employers to invest in better processes, technology, and compliance measures to avoid preventable losses.