01 April 2020

Jerome Smail, freelance journalist, presents the views of industry luminaries.

Value is a magic word in the world of work. Whether you’re an employer or an employee, the more value you can add the greater your chance of success.

In the modern workplace, and in an increasingly competitive job market, the onus is on the employer to provide workers with more than just a regular income. Flexibility, for example, is becoming an expectation and, in many cases, a necessity.

Richard Dutton, account director for human capital management and enterprise resource planning organisation Symatrix, says this can come in many forms. “Today’s workers are increasingly attracted to an employer because of flexibility of pay and the benefits offered,” he says, adding that: “It may suit their lifestyle to have a change in the frequency of pay, like being paid weekly rather than monthly. They might want online access to payslips as and when they need it. They may also, on occasions, need to access a proportion of the money they have already earnt before their regular pay day.”

Organisations should be looking to support employees’ wellbeing, obviating the need for them to borrow money that then has to paid off with high interest rates, he adds. “With a flexible payroll solution, money can be available to the employee when needed and then included in the calculation of the next pay day.”

CIPP board director Stuart Hall believes flexible pay will need to become a more common feature in employee packages, especially for lower-paid employees. He explains: “In the past, maybe a company might have said, ‘Our payday is always the last working day of the month.’ But then how do you handle the employee who joins you and then says ‘Do you know what, for the last ten years I’ve been working for a company where the paydays are on the 26th, so that means my mortgage and all my outstanding bills go out on the 25th or the 26th’?

“They’re going to struggle there because they will have to wait until the end of the month. But through smart banking, you can have payroll systems where the employer will say, ‘OK, if you want to have part of your salary paid on the 25th to cover your mortgage payment and bills, we can do that, and then the remainder of your salary will be paid on the last working day’. Or it may well be that some employers will say, ‘You can get paid whatever day you like after the 25th of the month’.”

So how can payroll deliver this? “First, they need a robust payroll system,” says Dutton. “That means documenting payroll processes and ensuring technology is configured correctly to enable operational excellence. They must also ensure HR [human resources] and payroll data are managed in a single application, that systems are singular, and data is available to users based on their job role and security profile. That is fundamental. If the HR process is working well, it is the foundation of the flexible payroll service that is needed to support employee wellbeing.”

However, Dutton points out that delivering this kind of payroll service also places demands on payroll teams. “To accommodate this, organisations are looking to embrace their underlying HR and payroll technology and applications,” he says. “Often, businesses have functionally capable applications at their disposal, but they have invariably not been implemented in an operationally efficient way. That makes it difficult for them to report on data or to run payroll in a pre-payroll process either mid-term or in the course of any payment cycle. In short, they need to obtain better and more immediate access to the payroll data at their disposal. To do that, they should first objectively assess whether they are getting optimum value from the application they currently use for HR and payroll.”

CIPP chair Jason Davenport comments: “There are multiple ways an employer can consider how a new system or process can add value. For example, if moving from a manual process to one that is electronically managed and has workflow – e.g. holiday authorisation – employers should think about promoting all of the factors that create an improvement. Such as: no loss of forms; more immediate response for approval or rejection; all items are trackable – so you can review when things were done and don’t have to keep separate notes. All this adds value to the employer and the employee.”

Another example, says Davenport, is moving to online payslips and having the individual’s history stored in one place – this makes them “easy for review for when completing other matters such as banking requests for information, and they also won’t get lost in post or lost in the house. Being smart with that technology also means you can provide hyperlinks to the likes of HMRC or other benefits providers.”

Andrew Drake, client development director at HR and benefits organisation Buck, observes that in today’s world, people expect everything to be digitalised and want information and action at the touch of a button. “Digitising HR processes can also create a more engaging employee experience when it comes to other aspects of the workplace”, he says. “Instead of waiting a week for someone to get back to them, a digital process can allow employees to log in to the absence management module attached to their HR system and see if there are any clashes with the time they want to take off. Processes like this can bring greater clarity at a much quicker pace and avoids frustration if a holiday request is rejected.”
There is an expectation among employees that the reward and benefit platforms offered by employers will be available digitally and on demand, says Drake. He points to research that says over half of UK employees are completing basic HR admin tasks on their own device rather than a work device, including 64% submitting sick notes. “Not recognising this trend and failing to adapt HR processes accordingly can immediately cause a discord with staff, who will find it old fashioned when they try to contact HR and it’s outside working hours,” he argues. “By going digital with these processes and systems, it allows employees to do things when convenient for them, adds value and means any frustrations or potential blockages are eliminated.”

As pointed out by Nicola Hirshfield, head of HR delivery at Cantium Business Solutions, by removing the burden of time-consuming, repetitive work that often goes hand in hand with HR and payroll systems and processes, organisations stand to add value for their employees at multiple levels – whether it be those tasked with the HR or payroll delivery role or the manager and employee engaging with the function. “Reciprocally, putting the needs of their people at the centre of HR and payroll systems and processes brings with it a wealth of benefits to the business”, she says.

Robotic process automation (RPA) is one of the technologies that Hirshfield’s organisation is harnessing. “We are successfully using RPA with customers to record information, such as new starters, in the payroll database,” she explains. “We have invested in creating forms which ensure employees give all the information required, so that the robot can pick it up and do what needs to be done.”

So how does this add value to employees? “Firstly,” says Hirshfield, “it means we can achieve high levels of accuracy in the delivery of payroll. From the perspective of the employee, payroll errors are frustrating at best and can have serious consequences at worst. The impact of being paid incorrectly can be wide-ranging – upsetting and stressful for the member of staff with knock-on effects for them and their family, particularly if they aren’t on a basic salary or are perhaps in receipt of benefits. It is not up to them to be the experts and yet, more often than not, the onus is on them to resolve the error. Inevitably, this also compromises their time, and that of their manager. Removing those pain points for employees adds untold value.”

There are other ways modern technology can increase value. Jon Maddison, managing director for Europe, Middle East and Africa at Achievers, the employee recognition organisation, says companies should actively seek employee feedback on how added value can be delivered. He comments: “Pulse surveys can be a very effective way of doing so, particularly via an anonymous and easy-to-use interface, such as single-click surveys. Offering a fast and secure way for employees to voice their opinion can give businesses a clear understanding of the engagement of their staff and insight into their views on particular issues.”

While payroll departments unquestionably add value to their organisations, it’s often said that this isn’t duly recognised and the strategic role they play is overlooked. However, there are steps that can be taken to address this and increase the function’s visibility.

Davenport suggests “promoting learning among the workforce and ensuring tasks and processes are well-documented and easy to follow”. Key is ensuring workers understand their payslip – “by promoting what deductions are all about and how the mechanics of payroll and pensions operate”. This, says Davenport, could be via webinars, promotional videos, fact cards or any other medium that works in the workplace, adding: “A suggestion would also be for the payroll department to agree a dashboard of key statistics that are useful and meaningful – this may be by department, by cost centre or whichever directorate may work best for an organisation. This could include how many or few advances are paid, how much overtime has been paid out compared to budget, or how much sickness costs each department and typically whether this is short term or long term.

“There is such a wealth of information available to the payroll department and working in a timely and accurate manner allows other departments to focus on their objectives. One of the best examples may be the customer service telephone that never rings for a query because the business teams are so well educated as everything is delivered one hundred per cent, with all information at the managers’ fingertips. Isn’t that what each department would like?”

Hall agrees the goldmine of data and information payroll gathers can be hugely significant in adding value to the function, especially when it comes to predictive analysis. He explains: “If you’re a retail business, for example, think about what you can get by going back over the last three or four years. You can say, ‘Right, when’s the peak?’. So, you know there’s going to be a peak around December because you had to employ more people. But what does that actually mean, and how does that work by store? And how did that feel? How does that affect manpower? And how can that store actually increase by a certain number of employees but have a better return?”
Hall concludes: “It’s about looking at the analytics and modelling. To my mind, payroll departments need to move beyond just reporting and compliance.”

Lysa Morrison, director of transformation at Cintra, provides views about getting value from employees. She says: “The top predictor of an employee’s success is emotional intelligence (EQ). Ninety per cent of top performers are also high in EQ but, on the flip side, just twenty per cent pf bottom performers are high in EQ.”

Lysa asserts that perhaps the most important factor in an organisation’s success, and in getting added value from employees, are its managers. Their impact on performance, she says, is directly linked to their self-awareness, self-management, self-motivation, social awareness and relationship management skills – or in other words, their EQ skills.

Continuing this argument, Lysa contends that “The relationship employees have with their line manager has the most influence over performance, retention, stress levels and growth”, adding that the good news is that EQ and management are skills that can be learned and developed. However, Lysa observes that “If it’s that’s easy, why do so many EQ, management and leadership training programmes fail to deliver meaningful value?”

The answer opines Lysa is that “Many approaches are too generic. Managers must recognise that great employees come in all different shapes and sizes. Teams are made up of individuals, with different strengths that can be nurtured and developed to create high-performing units. The most important experience at work is the experience of team; the biggest decision an organisation makes is who it appoints as managers.”

Lysa notes that though “skills and knowledge can be taught, talent cannot. It needs to be identified and nurtured. To bring about real performance-enhancing change, the organisation itself needs to have a supportive environment that enables and nurtures growth.”

This article was featured in the April issue of Professional in Payroll, Pensions and Reward magazine and was correct at the time of publication.