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WHY NOW IS THE RIGHT TIME TO RESTRATEGISE YOUR PAYROLL

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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.

Steven Watmore

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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

Business

THE ACCELERATION TOWARDS A MOBILE FIRST ECONOMY

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By Brad Hyett, CEO at phos

 

Over the last year, we have seen a big shift towards contactless payments. Fuelling this has of course been the coronavirus pandemic, which has made the public hesitant to handle cash due to the health concerns.

As multiple national lockdowns forced physical stores to close, and customers demanded easy, cash-free payment options, merchants had to quickly adapt. The result? An increased provision of pay and collect services.

In the UK alone, 83% of people use contactless payments according to data from the Office of National Statistics.

So it’s vital that merchants are equipped with the most efficient payment solutions, as the UK heads towards a mobile-first economy.

 

Proliferation of contactless payments

In 2020, 90% of UK card payments were contactless. This equates to an increase of 12% on the year prior, despite the total number of payments made falling by 11% from 2019 to 2020. Moreover, the affordability of smartphones has increased significantly over the last decade. And it’s estimated that 84% of UK adults now own one.

We’re Seeing merchants embrace more efficient and cost effective payment methods in response. While physical payment terminals are often too expensive for many small businesses, software point of sale, or SoftPoS, enables merchants to turn hardware that they already own – i.e. their mobile device – into a point of sale terminal.

With merchants increasingly adopting these innovative technologies, contactless payments will continue to gain popularity among the general public. In 2020, 13.7 million people in the UK either didn’t use cash at all or only used it to make a single purchase. That’s double the same figure from the previous year.

 

Changing consumer demand

Now more than ever, consumers are aware of how innovative payment solutions can add efficiency to their daily lives. As such, consumers now demand better payment services, including reduced queuing times, checkoutless stores, and bespoke loyalty schemes.

Businesses such as Mercedes offer an end-to-end digital car purchasing service, so customers can go through the whole car purchasing journey from the comfort of their own home. This includes car deliveries, financing, insurance and more.

Meanwhile, eCommerce giant Amazon has started trialling checkoutless ‘Go’ stores, speeding up the shopping experience by eliminating the queuing process altogether. The days of waiting for a table at a restaurant are also over, as more people have grown used to booking in advance.

Hence, it’s important that we empower small businesses to remain competitive and provide them with the payment solutions to meet customer demand.

 

Global transformations

The digital payments revolution isn’t slowing down anytime soon. By 2026, only 21 percent of transactions will be made using cash.

The US might have been slow out of the gate, but it’s starting to see increased adoption of mobile payments. In-store mobile payments grew by 29% in the States last year alone.

This growth was primarily fuelled by Gen Z-ers and millennials. Latest projections show that there will be 6 million new mobile wallet users by 2025, with millennials accounting for 4 million of this figure. These two generations, the former in particular, have grown up with mobile banking.

For most Gen Z-ers, their first foray into financial services was with a challenger bank like Starling or Monzo. These banks are able to offer online features such as ‘split the bill’, fee-free withdrawals abroad and much more to cater to the modern financial needs of the younger generation.

The Middle East experienced similarly sharp increases in contactless payments. From 2019 to 2020, there was a 200% growth in contactless transactions. This shift towards a mobile-first economy in the region was inevitable; the pandemic merely accelerated this shift. A recent study showed that 80% of people living in the Middle East planned to continue using contactless payments post-pandemic, with speed and security being the main draw.

 

The future is mobile

As parts of the world now start to come out of lockdown, there’s an openness to new solutions and a widespread acceptance of new technologies.

It is now a case of when, rather than if, we’ll see a permanent shift to cashless in the future. For businesses, embracing digital innovation will be key to remaining competitive and keeping pace with consumer demand in this fast-changing payments landscape.

 

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HOW MERCHANTS CAN IMPROVE THE ONLINE PAYMENTS EXPERIENCE

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By Alan Irwin, Senior Director of Product at Global Payments UK

 

The dramatic increase in online shopping over the past 18 months has encouraged many businesses to invest in developing their omnichannel shopping experiences. The reasons vary – some are keen to capitalise on the trend of older shoppers migrating towards ecommerce and some are trying to make up for loss of sales in brick-and-mortar stores during the pandemic. It is also true that many businesses are shifting their models to sell direct to consumers to avoid high marketplace fees and are therefore building their ecommerce channels for the first time.

The checkout experience is arguably the most important and delicate part of the ecommerce transaction, as it can make the difference between a happy customer likely to return, and a shopping cart abandoned out of frustration and confusion. A survey from March 2020 suggested that 88% of online shopping orders were abandoned, i.e. not converted into a purchase. A seamless, customer-centric online payment experience is therefore critically important in ensuring completed transactions. But with so many payment providers available, what should businesses be looking for when trying to keep friction to a minimum?

 

Keep clicks to a minimum

Less touchscreen interaction equals less abandonment. Adapting the payment page to fit any device and supporting popular mobile digital wallets like Google Pay ensures a seamless, stress- and hassle-free checkout experience for the customer and keeps clicks to a minimum. Friction can present itself in the most minor features – for example, when the customer is navigating the payment form, the appropriate keypad should be shown to the customer when required. It’s much easier to enter a card number using the dial pad instead of switching between QWERTY keypad layouts.

Simplifying online forms with autofill and tokenisation also significantly reduces friction at checkout and shortens necessary time taken. Ensuring checkout forms are tagged correctly for “autofill” is a great way to offer customers a single-click to input the payment, shipping, and billing data that they have stored in their browser profile. Similarly offering a guest checkout option will help convert customers who are in a hurry or looking for a one-off purchase. This can also be achieved by offering to store the payment details (called ‘tokenisation’) for express repeat and one-click purchases.

 

Make it easy to understand

A tailored payments approach can increase both domestic and international global sales. By offering a checkout experience in the customer’s language, the option to pay in their currency of choice, and use their preferred method of payment (whether it’s PayPal, Alipay or card), businesses can build loyalty quickly and put customers at ease. It is equally important for merchants to ensure they always display simple direction and information about next steps to instil confidence and prevent customer drop-off. The customer should be informed of what is happening at every stage in the process, for example, whether they will proceed to SCA (Secure Customer Authentication) next or go straight through to completion.

In addition, validating forms in real-time means merchants can highlight potential errors to the customer early on, and payment providers should provide this functionality. This could be an invalid expiry date, an incorrect digit in the card number or incorrect CVV number based on card type. When issues are only flagged at the end of the process, this forces the customer to go back through the steps to figure out the error. Real-time signposting of problems removes this potential friction and reduces the potential for a declined transaction.

 

Ensure seamless security

Merchants should work with a payment partner who offers the right blend of security and compliance management without it coming at a cost to the end-to-end checkout experience for the user. Instilling trust and security in your checkout flow while utilising the right solutions to drive seamless authentication flows will increase customer confidence and help prevent drop-off.

The greatest level of security and control comes from either utilising hosted payment fields that the
merchant can natively integrate into their checkout flow, or a hosted payment page where they can
manage the look and feel. Showcasing your brand on the checkout page with trust signals and logos also adds to building trust with the customer.

Staying ahead of regulations is also important. Secure Customer Authentication (SCA) will soon be mandatory in the UK for all eligible digital transactions, and this doesn’t have to be a friction-full process. Tools like Transaction Risk Analysis (TRA) and Exemption Optimisation Service (EOS) can quickly score transactions and drive exemptions where there is the right blend of transaction risk.

 

The devil is in the details

These three rules for successful ecommerce checkout experiences may seem straightforward, but it is important to apply them at a micro level. It can take only one minor point of friction to cause a customer to abandon their cart, and this will inevitably be replicated across other similar customers. It is critical to identify friction points early on and anticipate customer needs throughout the process. Discussing these points and any opportunities to improve customer checkout experience with your ecommerce team and payment provider is an important first step towards ensuring your entire shopping experience remains competitively seamless and loyalty is won. It may be that your payment provider cannot address them, in which case it could be time to move on in order to stay competitive.

 

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