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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

OUTSOURCING YOUR IT SOLUTIONS CAN SAVE YOU FROM COSTLY DOWNTIME

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Cloud Services

Amir Hashmi, CEO and Founder of leading IT and Cloud services provider Zsah, discusses why you need full-time professionals if you want to avoid the money pits of IT downtime

 

A lot of wealthy business owners will uphold the following infamous statement – time is money. Many CEOs believe that it should be at the heart of your business strategy. They aren’t wrong, and it is no different when it comes to IT. Therefore, it is high-time that businesses consider the real risks and costs associated with IT downtime, and do all they can to avoid it

In the midst of a post-pandemic technological revolution, it’s now more important than ever to carefully consider who manages your technology. It is essentially the motor that drives productivity, efficiency and growth, and if therefore, if there isn’t a thorough and dedicated system in place, businesses risk system failure, which can risk everything.

Something so essential to a company deserves to be taken more seriously than just to deploy the services of an IT help desk when there’s a significant issue. The answer isn’t necessarily to consider ways in which you can fix a problem once it arises, but instead to ponder upon ways of preventing an issue from occurring in the first place. This is what leads us to managed IT support services: your personal, dedicated team of IT experts that not only fix issues when they occur, but that also constantly improve the software and hardware so there is less chance they ever take place.

 

The real cost of downtime

Whenever your IT isn’t functioning at its full capability, you are losing money. Even the shortest of gaps in service can severely impact the customers’ experience, your reputation, and the output and efficiency of your entire staff.

In 2017, ITIC sent out an independent survey to measure downtime costs. It found that 98% of organisations say that a single hour of downtime costs over USD $100,000, with 81% putting the figure at over $300,000. For 33% of businesses, 60 minutes of downtime would cost their firms between $1 million and £5 million.

Figures from Statista.com reveal 24% of organisations worldwide reporting average hourly downtime costs amounting to between USD 301,000 and USD 400,000, with 14% reporting greater than USD 5 million in costs.

Elsewhere, IHS Markit surveyed 400 companies and found downtime was costing them a collective USD 700 billion per year – 78% of which was from lost employee productivity during outages.

 

Managed IT solutions are the key

Though we may never know the full cost of downtime, it is evident that it costs individuals and businesses a large amount of money. Don’t wait until your next emergency to remedy a problem; get the professionals in now to prepare for the future, rather than just fix problems in the present.

When you work with a managed technology services provider, your network and infrastructure are supervised 24 hours a day, all year round. As with any IT service, this means that issues will be fixed – however the real advantage is more long-term. As technology service providers perform regular proactive upkeep, there will be a reduced chance of suffering from issues in the first instance, and when (or if) they do occur, it will be far simpler to recover data thanks to full cloud integration.

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HOW TRADITIONAL INSURERS CAN USE TECHNOLOGY TO IMPROVE THEIR RELATIONSHIP WITH CUSTOMERS

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The customer experience with insurance is anomalous, in that one is only required to engage with their insurer if things are going wrong for them. To add value to the relationship, new technology and methods should be adopted, in turn driving loyalty and business growth, writes Oliver Werneyer, CEO and Co-founder of Imburse

Oliver Werneyer

Insurance is one of the oldest industries in the world and it is still, to this day, considered a grudge purchase. Looking back, insurance has a history of having a challenging relationship with its customers. According to an IBM study, in 2008, only 39% of consumers trusted the insurance industry. This percentage has stayed largely similar over the years, having reached only 42% in 2020. For any business with growth ambitions, good customer relationships are crucial.

I believe that now more than ever, the insurance industry not only needs to continue investing in improving relationships with customers, but to really think about new ways of doing so. At a basic level, the moment of truth for an insurance customer is when either they need to pay or are getting paid. Insurers can have the best policy wording, quick claims processes, apps and advisors, but if the experience to pay premiums or to receive a claim is bad, the customer immediately loses trust.

The pandemic has exposed this tenuous relationship between insurers and its customers. The need to move everything online and provide personalised services has exposed significant shortcomings in the service insurers provide. The industry has been too slow to adopt newer technologies and move engagements closer to the customer (self-service and empowered). This is largely due to the legacy systems and processes that insurers failed to modernise over previous years.

This means that the better-positioned incumbents have stronger customer relationships and benefit disproportionately from the pandemic, as they are able to win more new customers and convert customers from other insurers. They also benefit from significantly lower customer acquisition costs and much better growth, as illustrated in this McKinsey report. Even new entrants or InsurTechs are benefitting massively by focusing on improved customer experience and customer relationships.

However, it is never too late for insurers to build better relationships with customers. The main way to build a good relationship with a client is to make life easier, live up to promises and add value through the relationship with them. By working on these key elements, insurers can start building strong relationships with their customers, and, through the right partners, deliver this in a timely and non-disruptive manner.

 

Embedded Services

Insurance products often get a bad reputation because they cost money, but the benefits might only come much later, or never. Customers don’t get to experience a positive relationship with insurance products, either because they never claim and feel like they lost out, or they claim and they’re in a bad situation. By either embedding other services into the insurance experience to deliver a more transactional engagement, or embedding insurance products into general customer experiences such as online shopping or rewards, insurers can enrich customer relationships to generate value.

This way, insurers become a value-adding part of the customers’ everyday activities and not just a product that they have to pay for and may never get anything back from. One example is to embed micro-savings capabilities, often found in banking, into pension savings and insurance products. This can allow customers to save more for pension, attract younger customers and build a portfolio of fiscally disciplined customers.

 

Tailored journeys and personalisation

Customers have come to expect personalised journeys and engagements from product providers. Streaming services, social media, e-commerce or mobility services have shaped the customer expectations. Now, customers are also expecting personalisation for insurers.

Insurers need to invest very heavily in delivering personalisation and customisation to customers as they engage with their products. Failure to deliver this puts renewed strain on the value perceived by the customer and their relationship with the insurer. This applies not only to customer interfaces, but to aspects such as payments. Insurers should make it easy and pleasant for customers to pay and get paid. As the main moment of truth, payment experiences need to work optimally.

 

Perceived customer value metrics and delivery

The value customers derive from insurance products is, generally, monetary. Therefore, insurers must invest in product enhancement to increase its perceived value. Perceived value is not tied to a monetary value. By being able to choose between multiple payment options, such as a $300 pay-out to a bank account or a $320 Amazon voucher, the customer has a higher perceived value of the payment. This can be achieved by leveraging non-insurance products that can be purchased at a discounted price, exclusive access that the customer would otherwise not have or conversion into a form that is more useful to the customer.

Payments, for collection and pay-out, are at the core of delivering this value. An excellent payment experience immediately influences the customer to be positively inclined toward a product (PwC report). In order to offer this, insurers need to leverage multiple technologies and providers, offer any speed of transaction in any market, and deliver faster automation and better risk control. The key is to transform insurance products into transactional value-adds to customers’ lives and use this opportunity to continuously build on relationships with customers.

The main roadblock for insurers is still the operational implications of these activities and the costs that arise. In looking to build a better customer relationship, insurers need to look at partners that are operational enablers to deliver this. Partners that can solve the integration and speed-to-market problem so that insurers are enabled to deliver new capabilities, not bombard them with new ideas and no path to delivery.

Imburse, for instance, enables insurers to access all the global payment providers and technologies available in any market. Through a single connection, insurers can deploy any payment capability into any channel, for collection and pay-outs, without ever again needing to build a direct operational integration to the providers. This gives them full freedom to leverage payments as a key value driver and customer experience enhancer.

Building a better relationship with insurance customers is key for the insurance industry to close the protection gap. Incumbents are in the prime position to look at Insurtech and Fintech partners to rapidly and significantly modernise, digitalise and transform their own capabilities to deliver major enhanced value to their customers.

Imburse is an advanced universal payment connector that enables businesses to gain cost-effective access to complete global payments technology, regardless of the service provider. To learn more, please visit www.imbursepayments.com.

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