by Hannah Grimshaw, BPO Payroll Lead, Symatrix
The government has published guidance with regards to the next steps for the Coronavirus Job Retention Scheme (CJRS) and furlough – and that will have implications for almost every business operating in the UK today, including those working across the financial sector. One big change is that the furlough scheme closed to new entrants on 30th June, meaning that from 1st July employers can only claim in respect of employees who had been furloughed for a minimum period of three weeks before 30th June.
From 1st July as part of the government’s guidance on the next steps for the CJRS and furlough, employers will be able to bring furloughed staff back part time and will be able to claim through the CJRS for non-working time – otherwise known as flexible furlough.
Furthermore, as of 1st July, the three-week minimum claim period for furloughed employees has changed to one week, and from 1st August the level of government grant will start to reduce and employers will be required to contribute to the wage subsidy on a phased basis. These changes in themselves will mean that employers have a number of considerations to factor in relating to payslips and flexible furlough, post-employment notice pay, pay in lieu of notice, redundancy pay and parental leave.
In addition to this, on 26th June 2020, the government proposed amendments to the Finance Bill 2020 to protect individuals affected by Furlough, reduced hours or unpaid leave because of COVID-19. The new clause 32 ensures these circumstances, will not negatively impact the tax advantage of the enterprise management incentives (EMI) scheme membership. The new rules apply initially to the period between 19th March 2020 and 5th April 2021 with the potential for extension by the Treasury until 5th April 2022.
All of these changes are food for thought for finance organisations, or any business in general, and they will need to ensure that they have flexible and agile HR and payroll processes in place in order to manage them effectively. So how can finance organisations ensure that this is the case and that they are set up to be as agile and flexible as possible to deal with these processes through the pandemic and beyond?
Finding a Solution
To manage the requirements outlined above, organisations need a great operating model for payroll. Running an all-in-one approach to HR and payroll will make a significant difference in ensuring that businesses have the agility to make adjustments to payroll and manage claims processes to HMRC quickly and efficiently in these difficult times all wrapped with strong governance and controls that the ‘one’ solution brings.
If an organisation’s payroll engine is fed by separate HR, time and labour and recruitment systems (HCM), the data transfer / collation processes will require interface creating & maintenance and almost certainly manual intervention, which introduces risk into any process. If a process is 100% automated, it will be quicker and deliver fewer errors than a process with human intervention. In contrast, a single cloud-based HCM and payroll system removes the requirement for data transfer and manual interventions.
Managed services can also have a key role. The benefit of outsourcing HCM and payroll to an expert partner is that HR professionals can instead concentrate on the positive HR activities to both the HR and organisation strategy and that can in turn help drive operational agility. Businesses that have trust-based partnerships with managed service providers can draw on the expertise of those providers that have been though these processes multiple times with other clients. Managed services providers can provide expertise in a range of different areas, including how furlough is likely to impact a business right through to providing help with reports for making claims to HMRC, for example.
It is also important that every business, including those in the finance sector, adhere to the highest standards of data security and cyber-security, especially with large number of employees working from home. Being certified to ISO27001 enables finance businesses to ensure processes, procedures and IT systems are annually externally audited to make certain data is secure. With a Cyber Essentials certification or accreditation to FSQS, finance businesses can guard against the most common cyber-threats and demonstrate their commitment to cyber security.
The key point, however, is that a single HCM and payroll system, delivered as part of a managed services approach can be an ideal platform for increased security; less risk and enhanced agility – key benefits for any finance firm, especially in these difficult times.
