Botched IT upgrade inadvertently cuts pay for Next employees

UK retailer Next has apologised to employees for months of salary underpayment caused by a botched IT upgrade.

The company has been experiencing issues since February and the faults are related to a decision to outsource its payroll functions to US software giant Oracle, according to The Sunday Times.

It's unclear when or why Next opted to outsource its payroll systems to Oracle as neither company appears to have made any formal announcement of the move. The retail company usually develops software in-house but has struggled to make Oracle's systems work with its own and has been forced to implement a special team to spot-check errors manually. Oracle declined to comment on the issue.

Next also declined to say how many of its 43,000 workers had been affected, but reports suggest both weekly and monthly-paid staff have been short-changed with some missing as much as £200 per month. In some cases, staff have had their pension contributions deducted from their pay, though Next has said it will make sure that these problems will be rectified and all employee losses will be made good.

"Over the last few months we have experienced a number of issues with our new payroll system and have been tackling them as a matter of urgency," a Next spokesman said. "This is one of the very few instances where Next has outsourced critical software and we have learnt some important lessons about integrating our in-house applications with third-party platforms.

"We are acutely aware of the problems these payroll errors have caused some of our colleagues. We sincerely apologise to all those affected and assure them that we are resolving these problems as a priority."

This isn't the first time this year a UK retailer has experienced automated payroll issues; Supermarket Asda admitted that some workers lost out on as much as £500 due to problems with an external payroll system - some 5,500 members of staff were reportedly affected.