The first half of 2020 has been a traumatic time for many of us, characterised by fear, uncertainty and doubt. Sitting at the eye of the COVID storm were HR and payroll professionals, who’ve done a fantastic job in unprecedented and extremely challenging circumstances.
But is there more we can do as an industry? Many employees admit that financial concerns are causing personal distress and affecting their productivity.
With no end to the uncertainty in sight, now is the time to double down on digital, not only as a more streamlined way to deliver payslips amidst mass remote working, but as a way to enhance the entire payroll experience. By promoting financial wellness, employers could even help to mitigate the impact of future recessions.
Time for change
The traditional payroll experience has for many organisations remained unchanged for years. Although payslips are increasingly delivered digitally, for the recipient it’s still very much a one-way transaction with limited interaction with the sender. With many payslips going unread, even this solitary measure of engagement is often lacking. Perhaps in normal times this wouldn’t have mattered, but these are certainly not normal times.
The pandemic has shifted the payroll landscape considerably. It has brought with it mass job losses and huge anxiety over financial security. OECD figures forecast a decline in GDP of 11.5% this year, the worst of any country in the developed world.
Although unemployment has so far been constrained to around 4% thanks to the government furlough scheme, there are predictions it could rise to nearly 15% if the country succumbs to a second wave of infections. In the US, job losses have reached a scale not seen since the Great Depression of the 1930s, with 40 million filing for unemployment and a fifth of households deemed “food insecure”.
In such extreme times of job insecurity and economic recession, employees are understandably concerned about their finances. This matters to employers: a study from ADP found that most (98%) admit that employee financial wellbeing impacts their business, especially in terms of productivity (67%) and engagement (62%).
With British households likely to see a 17% drop in disposable income over the second quarter, these challenges are more acute than ever. They’re matched everywhere: 88% of Americans admit that the current crisis is causing a stress on personal finances, with most concerned they’ve not saved enough and nearly half (48%) worried they won’t be able to pay their bills.
According to McKinsey, “Companies need to increase communication, balancing the needs of the business with expectation setting and morale building, so employees know that their well-being is top of mind.” Yet with many staff working from home, there are even fewer opportunities for them to discuss their financial concerns with their employers.
This is where the payroll industry can help. The past few months have already seen huge disruption to the sector, thanks to increased workload and shifting work patterns.
HR and payroll professionals have always been office-bound due to the sensitivity of the data they handle. So mass remote working mandates following government lockdowns forced a radical reordering of business processes. It couldn’t have come at a worse time, amidst the annual tax year-end rush and onerous new demands placed on them by the government’s Coronavirus Job Retention Scheme (CJRS).
Yet the good news is that the payroll industry passed the test with flying colours.
Those chaotic few weeks showed us two important things: that payroll professionals are the unsung heroes, the bedrock, of any organisation; and that digital technology is now mature enough to surmount even the toughest challenges. Online collaboration and communication tools like Zoom, WhatsApp and Slack stepped in to help colleagues work together even as government guidelines were changing by the day.
Digital portals like PayDashboard also played their part in helping payroll adapt to the new reality of distributed workforces. We helped several companies implement an online payslip portal in less than 48 hours from enquiry to launch — the first time that’s been necessary since the eve of the GDPR.
A digital future
However, we mustn’t stop here. We need to grasp the opportunity as an industry to push for lasting digital change. Online portals can help payroll become more than just delivering digital payslips.
They offer a fantastic opportunity for employers to engage with their staff with financial advice and mental wellness initiatives, at a time when such support is sorely needed. According to ADP, 79% of employees expect their employers to help them with their financial wellbeing.
Our experience bears this out: PayDashboard’s guide to statutory sick pay (SSP) and COVID was read over 4,000 times by users in April, for example, over three times the number of views we usually get for SSP content.
It’s important for the future of our industry that we continue to promote a two-way dialogue with employees and offer help and guidance in financial and mental wellness.
Online platforms are the easiest, most effective way to do this, especially as more digital natives enter the workforce. We’re all facing an uncertain future.
But by arming the workforce with the tools they need to improve financial literacy, we can also help to fortify households against the impact of future recessions.
That’s the kind of digital value-add that will help the entire economy going forward.
Laura Hughes, head of engagement, PayDashboard