Need to know:
- Involving employees in a digital self-service pay system can help boost engagement and retention with the organisation.
- Quick and easy access to payroll information can also help employees see the impact on pay of benefit take up.
- The cost of a digital self-service pay system can be countered with the reduced administrative burden.
With so many innovative and quirky ways of boosting employee engagement now in practice, reformatting a payroll system might at first seem like a very dull approach.
However, experts say that engaging employees in the process of inputting their own pay, and giving them access to pay information, through digital self-service systems can not only aid recruitment and retention in itself, but also drive better take-up of existing benefits and free up HR teams to focus on yet further value-adding activity.
Kirsty Fowler, managing director of payroll at software provider Civica, says employees have become accustomed to instant gratification outside of work and see no reason why that has to change when they clock on.
“If I want to order a takeaway on Deliveroo, I want it now,” she says. “That expectation has come into the workplace; I want to see my payslip before the money hits my bank account, my P60, my P11D. Working from home so much over the last two years has made this more and more relevant.”
Fowler says giving people quick and easy access to payroll information allows them to feel in control and drives engagement. Software can allow employees to model the impact on their take-home pay of opting into certain benefits, for example, or changing their pension contribution.
“[Employers] get more buy-in and loyalty from employees,” Fowler says. “Benefits are taken up more; ultimately it’s all about retention.”
Prasun Shah, partner at business services consultancy PWC, says self-service pay is at the core of the process of modernising and digitising an organisation’s HR function, a move he says has been shown to reduce employee turnover.
First and foremost, by making employees the custodians of their own information, an employer can make this data more accurate and boost the employee experience, says Shah, while attracting tech-savvy individuals is a further benefit.
He says the pandemic has accelerated the movement to digital self-service pay by removing many employees from offices for long periods and prompting a “once-in-a-lifetime behavioural shift” towards remote information access.
Building a digital network with employees regarding their pay can also open up a raft of further opportunities.
“With the emergence of digital wallets on our phones, we store money and cards on our devices and a new class of disruptors is saying [an] organisation’s pay system could be linked to our digital wallet,” points out Shah. “Another group are saying why would [employees] wait for a month to be paid? Employee payment accrues on a daily basis so why shouldn’t [they] be able to draw down on that instantly?”
One organisation looking to offer employees just such an opportunity is cloud software provider Ceridian, which has already rolled out the capability to pay for goods and services directly from accrued pay in North America.
Wendy Muirhead, vice-president of Ceridian Europe, says the majority of people using its Dayforce Wallet function are drawing down small sums to pay for groceries or petrol but adds that the software, coming to the UK in 2022, means that “fundamentally every day could be pay day”.
She believes that there are many benefits to organisations in giving staff more control of their pay. “If [organisations] have a chief executive looking for information at their fingertips then the best way to get that is to open-up self-service application of various systems,” she says.
“Changing address details, adding a new dependent, reporting [sick leave]; it is up to each organisation what they want employees to do but there are huge benefits to opening just some of that functionality up.”
Fowler says that although there is obviously a cost to new software, this usually pays for itself in reduced administrative burden before it even begins to reap benefits for organisations.
“It is about time savings and HR people doing the job they should be doing, focusing on people, as well as, for example, saving money from printing payslips,” she says.
Organisations must ensure their digital self-service payroll policies are appropriate, and that employees have ample opportunities to access the systems.
“If this [is rolled] out in certain manufacturing environments, [employers] might be leaving people to use their own time and mobile data to manage their payroll information,” he says. “[They] might get some resistance.”
Overall, however, Shah believes the time is right for many employers to make the switch.
“Some of the barriers have come down with different consumer cultures and cheaper mobile data. It is a good time to implement digital self-service pay.”