Why now is the right time to restrategise your payroll
By Steven Watmore, Product Manager, Sage UKI
National Payroll Week – admittedly it’s not an awareness week on everybody’s radar. But for payroll professionals, and those in the know, it’s a time to reflect on the changes a year has wrought on the industry. It also provides with the chance to showcase the crucial roles our professionals play in paying the nation.
During the past 18 months, payroll has seen some huge shifts due to the turbulence created by the pandemic, and this has also shone a light on the importance of our payroll experts and the complex job they juggle.
Running from 6th to 10th September, National Payroll Week can be treated as a checkpoint for business leaders to access their own payroll strategies.
Payroll is not just about finances – it’s part of a wider wellbeing issue. And, just as three out of four (72%) HR leaders say the crisis has helped them demonstrate their value and increase understanding of HR’s role, according to Sage research, there is an opportunity for payroll teams to show their value and understanding of the intersection between payroll, job satisfaction, security and morale.
Through a company payroll audit, wellbeing and efficiency questions can be raised and tackled. Are there inefficiencies in current payroll? Are staff happy with the way they receive pay? Could investment in digital payroll services boost satisfaction? With these themes in mind, I’m going to focus on three top tips to take your payroll to the next level and meet employee needs head on.
- Initiate pulse surveys to assess payroll satisfaction
Historically, payroll has appeared to happen by magic and very much behind the scenes. But in the wake of the furlough scheme implementation, and the lifeline this has extended to workers across the country, payroll has gained new visibility as well as complexity.
Payroll now is part of a wider HR conversation. There’s a myriad of demands that align to wellbeing, since getting payroll right is vital for staff to pay for living costs, such as rent, mortgage and bills.
A pulse survey might cast out some insights into how employees are handling the pandemic. Payroll could be a vital piece of the puzzle here, given that the past year has been full of trial and tribulation for many of us, especially where finance is concerned. According to FlexEarn, three quarters (77%) of employees say that money worries impact them at work, so it’s important to explore ways that payroll can help alleviate financial stress for workers in ways like this. Something like Earned Wage Access, which lets staff utilise earned segments of salary in real-time before monthly payrolls, can help manage paying for living costs, especially unexpected expenditure.
- Audit payroll processes to root out inefficiencies
It’s easy to get overwhelmed by payroll. You need to pay staff, maintain codes of practice and manage cashflow. An emerging challenge is now keeping a handle on time worked as basic or overtime, as there is new fluidity in hours, with temporary workers and churn in companies – as part of a move washing over industries, dubbed the ‘Great Resignation’. An opportunity for businesses is to make sure they’re taking advantage of any government support they may be entitled to. Two good examples to look at is the Employment Allowance and Small Employer’s Relief.
Balancing compliance with needs for flexible payroll and emergency cashflow measures, such as freezing pay and recruitment if sales plummet, which was a challenge facing many during lockdown restrictions, places huge pressure on payroll teams.
All these moving parts paint a picture of disruption. There might be a lot of intricate nuts and bolts in the back office, but as long as you are delivering a successful, regular payroll service to clients or staff, then this is what will be intrinsic to wellbeing. To do this, you don’t necessarily need to supercharge productivity right away, but assessing where time is trapped, and thinking about how automation can save human effort, could prove helpful first steps.
- Check whether your software is up to speed with compliance
Managing payroll can be complex. It involves knowing tax compliance, by keeping track of updates from HMRC, ensuring that payroll is synchronised with benefits packages and pension schemes, and that workers are paid like clockwork.
For instance, one of the key changes in this tax year was around National Minimum Wage. Previously, people aged 21-to-24 were in the second wage tier, but this year those aged 23 and up will move into the top band. That could impact costs, so it’s worth reviewing the rates to understand how your business is affected.
With the right software and support, you can enact procedures at lightning-fast speed and keep yourself financially agile when circumstances switch. Updates are automatic through cloud-based platforms, so you don’t have to stress about whether your system covers the latest regulations. Having the right software can align to employee needs too, as many are clamouring for digital, mobile solutions, such as online payslips or app accessibility, which can be offered through the right payroll platform.
The road ahead
A step-by-step approach to evaluation, with an employee pulse survey, technology efficiency audit for the payroll team and compliance check can keep the payroll machine running smoothly. Ensuring payroll is healthy is very important. Payroll is the unsung hero of the economy, the essential gear that makes the engine turn, and with the rollout of the furlough scheme it has proved an essential prop to industries as they weather the storm.
As business goes digital, payroll professionals need to ensure they continue to upskill and update technology to remain at the top of the curve. Companies need make sure they invest in their payroll teams and give them time to learn and upskill, while also staying ahead of technology demands.
Data analysis and flexible payment schedules are changing the way payroll works, while employee needs and individual company requirements now play an increasingly central role in payroll management. Our payroll professionals have to be so much more than simply payslip processors as businesses look to glean more from this department, maintain great employee engagement and use deep data insight to develop their operations.
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