Steven Cox, chief evangelist at FMP, shares his pay transparency advice with Finance Monthly.

Pay transparency has long been a controversial topic. According to research carried out by company review website Glassdoor, 70% of employees across the world believe that pay transparency is good for employee satisfaction. 72% think it’s good for business. And yet the question of who gets paid what remains a very taboo subject for many, particularly in the UK. Many business leaders feel that revealing staff salaries will only lead to division in the workplace, rather than a trusting and open business culture. Below, we examine when pay transparency works and how to implement it in your business.

Pay Transparency – The Pros

Looking at Glassdoor’s statistics, it’s clear that most employees want the companies they work for to reveal all staff salaries; but why?

Knowledge about job opportunity

The research also revealed that more than half of employees believe they need to find a position elsewhere in order to obtain a significant increase in salary. This perhaps illustrates one of the advantages of pay transparency. If staff salaries are public knowledge, employees can easily recognise their financial worth within a company. They can see what the person in the position above them is being paid, and therefore what they can potentially aspire to.

Trust and openness

Another big plus is that pay transparency leads to an open and trusting business culture. Wondering what colleagues and seniors are being paid can quickly create a toxic work environment, as staff members conclude – rightly or wrongly – that they are being paid less than they are truly worth. When one employee feels undervalued, they will likely confer with others, which can then lead to discontent and low morale. In this case, employees are unlikely to put 100% of their effort into their work and may even seek to leave.

70% of employees across the world believe that pay transparency is good for employee satisfaction. 72% think it’s good for business.

Attracting new talent

It’s clear that employees want companies to be transparent with their pay, so companies that do offer this are arguably more likely to attract new talent. Having knowledge of the salaries of all staff is likely to make a new recruit keen to work and progress, as well as work hard from the outset under the clear understanding of their financial worth in a company.

Pay Transparency – The Cons

In spite of the positives of pay transparency, many company leaders argue that the negatives outweigh them, for a number of reasons.

Highlighting pay differences

There are a significant number of companies that do pay different salaries to staff members, even if they perform the same duties. This can happen when a promising applicant negotiates a higher salary, or when budgets change as the years go past. In these instances, if salaries are public knowledge, those on lower salaries are likely to become upset and put less effort into their work - or seek new employment.

Revealing information staff don’t want to share

Another problem can occur when salary details are shared when employees don’t want them to be. Many people feel that their salary should be confidential, and that it almost represents their worth in society. Therefore, if it becomes public knowledge, they may feel exposed and even betrayed by their employer.

Employees may not appreciate all types of compensation

Pay transparency gets even more complicated when you also consider other types of compensation, such as company benefits in kind. These can be anything from a company car to health insurance and may be offered as part of a salary package or negotiated by the employee. Pay transparency tends only to relate to the sharing of salary figures, but some members of staff may also enjoy particular benefits which others don’t. If a company does not share this information too, there is more room for ambiguity and potential doubt about fairness.

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Is Pay Transparency Right for Your Business?

The most helpful way to determine if pay transparency is right for your business is to ask yourself if you are comfortable with the salaries you pay your staff. If you know that people in the same positions are paid different amounts, you need to be confident in explaining the reasons why before sharing the information.

Most businesses find that pay transparency leads to a content and trusting work environment, in which staff understand their part in the company cog. It’s not only about weighing up colleagues’ financial worth to a company, but also about appreciating the bigger picture. If a company’s budgets and spend are common knowledge, everyone knows where they fit into the overall goals and future of the business.

If you do decide to implement pay transparency, it’s vital to ensure that the information is communicated clearly and accurately. If it will be a new policy, make sure all staff are aware and have had time to digest the memo, and approach management with concerns.

What pops into your mind when you think about payroll services? Probably making some complicated calculations in the massive number of worksheets. However nowadays, as the technology evolves day by day, like every other business domain, personnel management, workforce planning as well as alignment with the accounting process are being enhanced and re-designed with new generation software as a service (SaaS) platforms.

Payroll is more than a calculation of paycheck. Rather, it is a secure form of the income statement that is both critical for the employer and the employee. It is a simple yet highly technical field of expertise and may have resulted in legal penalties and burdens on the employer if the payroll process is not managed correctly. Because payroll calculation includes income tax, other tax calculations, and withholdings, as well as considering benefits like premiums, expense reimbursement, health insurance, and so on.

If you are a small business owner or an HR or Administration responsible working in a small business, to avoid wasting too much time each month for a specific task, and to find a solution with an affordable budget, the best payroll services may be the software solutions for your case.

Software as Service (SaaS) payroll solutions will benefit you in terms of time and save your money that might otherwise be wasted in outsource payroll companies or hiring personnel dedicated to this, which indeed cost more than a subscription to payroll software.

Automatic Payroll Calculation and Tax Features

For a small business with a limited number of full-time employees, payroll service software may be seen as the best payroll service option to choose from.

Payroll is more than a calculation of paycheck. Rather, it is a secure form of the income statement that is both critical for the employer and the employee.

They offer automated payroll calculation along with the necessary legal tax calculations such as income tax as well as manage financial reflection of benefits like health insurance and overtime payments.

You can calculate the payroll of your employees quickly and do not have to deal with complicated menu bars.

Adjusted to company size

Most of the payroll services online offer you several plans which can be adjusted and customised based on your employee number and needs. When choosing the one among the best payroll services that fit your company, please bear in mind to control their policies, whether they ask fee per person or a certain limit or they demand an extra fee for part-time employee payments which occur irregularly. If they have payroll limits per month and you have too many variables changing at each monthly period, then you should search for the best payroll service that provides more flexible options.

Workforce Management

If your company operates based on shifts, managing schedules and employee working hours is a big deal, especially considering that the best payroll services come with built-in HR tools such as workforce planning, automated shift planning, and platforms for personal agendas which would be a beneficial asset.

Through this feature, if you need it, you can see your daily schedule, which will reduce the rate of errors. Special reports as per company unit, date range, and type of employee, and monthly shift reports for employees may also be produced.

Integration to Company Software

Whether you have a digital service company or a business that has brick and mortar stores, you will have several other pieces of software to execute your business ranging from CRM tools and financial dashboards to procurement and shipping platforms. Particularly, the integration of payroll tools to accounting software or existing workforce management or HR tools such as SAP will be a crucial factor when deciding for the best payroll service for your company.

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Why is SaaS the best payroll service solution?

✔  They are affordable and a smart decision for a small business compared to a full-time expert or outsourcing.

✔  On a single screen, you can do all your calculations.

✔  In real-time, you can monitor the payrolls and share them with the accounting department or legal party.

✔  You will not get lost in complicated menus.

✔  They complete payroll calculations quicker because of these properties.

✔  Simplify with one click the entire shift schedule.

✔  Online recording of all payroll payments, expenditures, promotions, incentives, and bonuses.

✔  An online framework to control leaves and shifts

✔  Each worker can have his or her account, demand leave, and oversee their shifts or overtime hours.

✔  Manage  I-9s, part-time W-2 workers, 1099 contractors, and freelancers.

To Sum Up

Payrolls must consist entirely of accurate statistics. The payrolls must be properly maintained and preserved in the case of court proceedings concerning the employee and the employer since they are valuable evidence. For this purpose, efficient and smart payroll software, instead of the effort, money, time, and manual labor spent on complex files, is a very practical solution among the best payroll services on the market, particularly for small companies.

Payrolls, for a majority of the workforce, acts as a motivational factor. It is only when they get accurate and timely income that they feel inspired to keep putting their best foot forward. After all, it is all about money at the end of the day.

This is what makes it important to effectively process payrolls. Accurate payrolls makes sure that employees are neither getting underpaid nor are they getting anything more than they were expected to receive. 

Moreover, effective management is also about handling confidential documentation, ensuring accurate benefits, sorting out reimbursements correctly, and everything else that revolves around the employees income. 

So, how exactly do you manage payrolls effectively so that both employees and employers keep happy? Read about the solution below. 

Get most out of advanced technology

Thanks to advancements in technology, there are now ample tools and software on the market that have been developed to make business operations a lot easier, even payroll management. Payroll system software was designed specifically to ensure that organisations manage their payrolls effectively. 

These tools automate almost every payroll-related task. Not only is this tool reliable to get accurate timings and amounts, but there are variations that come with additional helpful features. These features could include tracking attendance, managing budgets, filing taxes, calculating overtime of employees, tracking employee work hours, and many more. 

You can easily find a tool that basically takes care of everything related to the human capital of your organisation. All you need to do is select the tool effectively and with patience and research.

Payroll system software was designed specifically to ensure that organisations manage their payrolls effectively. 

Streamline tasks

Organisation is the key to success. The more organised you are, the easier your life will be. When there is chaos, the chance of errors increases. 

Thus, make sure you are always working to get more organised at work and in life. Start by reviewing how your current processes are. Learn about all the areas that need improvement. 

Once you have these areas, start working on them. Determine the type of pay schedule that will work best for your organisation as well as your employees. If you have distributed hours, identify the best course of action to take care of that. 

When you are trying to improve, start by analysing and identifying.

Go paperless

In this world of digitalisation, it is perhaps high time to adapt to more advanced technology. After all, the digital world is the future. There are plenty of benefits that going paperless can bring.

The main benefits include offering an easy and less cluttered way to employees to manage and monitor their finances.  When you opt for digital solutions, employees won’t have to stand in line and pick up their checks. This will save time and offer them more hours to focus on more important tasks like achieving their targets.

You can offer a self-service portal where employees can themselves look into their documents and payslips when the need arises.

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Consider outsourcing payroll management 

Many find it difficult to delegate tasks. They feel the more they keep the work to themselves, the better and more accurate it will be. That’s completely wrong.

When you have too much on your plate, it is going to be truly difficult for you to focus on even one thing. Neither would you be able to carry out payrolls effectively nor the other tasks in hand. And payrolls need accuracy. Thus, consider outsourcing your payroll management. This will help you retain your employees and keep them productive as they will be getting accurate and timely pays. No delays. This is because the chances of the brands that you will outsource payroll management from will probably already have updated software. 

Thus, consider letting go of the burden of manual payrolls and begin storing important documents securely.  

Conclusion

The bottom line is that automation and easy life goes hand in hand. If you can find any way to automate your tasks, be it using a digital tool or by outsourcing the management, you should certainly consider doing that. It will give you more time to focus on things that actually matter. 

Today, you can use video conferencing software and project management tools to facilitate coordination and communication in a team that’s spread across multiple locations. Consequently, a global workforce is gradually becoming the norm for companies, irrespective of their size and niche.

This isn’t surprising considering the awesome benefits that global recruitment and remote work offer. To begin with, it introduces cultural diversity and multiple perspectives in your team. This can go a long way to encourage innovative thinking and creative problem-solving among your employees.

It’s crucial when you want to break into new markets and expand your business internationally. Also, when your employees work remotely from the comfort of their homes, it can increase their productivity and efficiency. Recruiting employees in certain countries can even be more economical than hiring from your home country.

Having said that, building a global workforce comes with its own set of obstacles. From managing multiple time zones to ensuring complete transparency - you need to overcome various hurdles.

However, the biggest challenge of recruiting employees across the globe is managing payroll. From compliance issues to payment delays - you’re likely going to face various problems while paying international employees.

In this article, we’ll discuss some of the most common challenges you’ll have to overcome to pay employees overseas. But let’s first take a closer look at the different employment models you can use to build a global workforce.

How to Build a Global Workforce

Typically, if you’re looking to recruit international employees, you’ll likely use one of the following employment models:

Independent Contractors

This is a common choice for small and mid-sized businesses. Instead of recruiting full-time employees, you hire freelancers on a contractual basis. It saves you the trouble of providing any benefits, bonuses, and other incentives. When hiring contractors though it’s important that they are contractors to avoid the risk of misclassification.

From compliance issues to payment delays - you’re likely going to face various problems while paying international employees.

Direct Hires

In this model, you recruit part-time or full-time employees from a foreign country and make them a part of your global payroll. This requires you to keep a tab on the taxes and labor laws in their host country. You will also have to establish a legal entity in the host country before you can directly recruit international employees. This is known as the global payroll model, to distinguish it from the contractor and global PEO models even though all 3 global workforce models require paying and a ‘payroll’ to your overseas hires.

Global PEO

The global PEO or professional employer organisation model allows a company to use a professional services company to hire and become the employer of record for the employee in the overseas country. The global PEO is responsible for handling all employee-related responsibilities, including payroll processing, tax management, benefits management, etc. Recruiting through a global PEO simplifies the overseas talent acquisition and onboarding process enabling you to hire overseas without having to first open a local entity.

Challenges of Paying International Employees

Unless you have partnered with a global PEO who will undertake the payroll and ensure that your employees’ salaries are in accordance with local payroll taxes, you’ll have to manage payroll for your international employees. Even if you have recruited freelancers, you will still need to ensure that they’re paid the right amount at the right time.

Here are a few common challenges you’ll encounter when paying employees overseas:

1. Compliance Across Multiple Jurisdictions

Every company has its own set of labour laws and tax legislation. Even if you’re establishing a legal entity in a foreign country, you’ll need an expert to guide you through the local laws.

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If you fail to adhere to these regulations, your company might be liable for financial penalties. That’s why compliance is the most common problem you’ll experience when paying international employees. This can become particularly challenging when you need to keep a track of multiple laws across various jurisdictions.

Hiring independent contractors doesn’t exempt you from the purview of compliance. This is because if you exclusively work with a freelancer for a long period, it could potentially make them look like full-time employees in the eyes of the local jurisdiction.

2. Manual Processing Across Multiple Payroll Calendars

If you’re working with many contractual employees across the globe, they’re likely going to follow diverse payroll calendars. Monitoring these calendars and making manual payments in a timely manner can be excruciatingly difficult.

Also, when you’re paying employees in different countries, you need to account for various processing delays. While in some countries, the bank processing time is only a few hours, others can take days or weeks to complete a transaction.

You need to factor in these delays in your payroll calendar to ensure that your employees get paid on time, irrespective of where they’re located.

3. Moving Money Across Borders

Wiring money to different countries isn’t the same as making a bank transfer in your home country. You need to consider various factors, including the currency exchange rate and processing fees.

Manually tracking these details on a regular basis is going to be challenging. Also, depending on the number of overseas employees, you might end up spending a lot of money on processing fees.

Wiring money to different countries isn’t the same as making a bank transfer in your home country.

Global Payroll is the Solution

If you’ve had any experience in hiring and paying overseas employees, you’re likely be already familiar with the concepts explained here. For those taking their first steps in hiring abroad, this post should give you an idea about some of the complexities involved.

What steps is your company taking to simplify the process of paying overseas employees? Share your tips in the comments section below.

One of the first firms to try paying its staff monthly, and not in cash, was a tech firm - Pye Radio - who planned it as a cost-cutting decision. It worked for the employer more than the employee, who used to be paid weekly, cash in hand, ready to spend or deposit. In fact, Pye Radio employees rejected their employer's change of payment type when they first tried it in 1954. So why has it stuck? James Herbert, CEO at Hastee, shares his perspective with Finance Monthly.

We no longer rely on other antiquated systems from 50 years ago - look at the evolution of communication as we've shifted from letters to fax, mobile phones, and beyond. Similarly, Apple Pay, Monzo, and PayPal have completely changed the way payments can happen, yet payroll still remains largely unchanged.

This outdated cycle leaves thousands of workers with financial stress. For example, when a bill or unexpected cost hits the middle of the month, a lack of access to the salary they are actively earning means that many are left with no choice but to opt for high-cost credit. Our 2019 Workplace Wellbeing Study found that as many as 82% of UK workers - across all levels, and all pay bands - resort to these measures to stay afloat, with 38% knowing they will struggle with the repayments.

This is a particularly big problem right now, as people need access to money to buy essentials exactly when their work schedules (and supermarket shelves) allow.

Financial stress can take a huge toll on overall wellbeing, permeating out into all aspects of life. In the same 2019 study, workers said it impacts their sleep (45%), social lives (38%), relationships (34%) and health (32%). Importantly, workers report that financial stress affects their performance at work (27%). All of these areas combined undoubtedly have an impact on how well people are able to function and concentrate at work.

Financial stress can take a huge toll on overall wellbeing, permeating out into all aspects of life.

This has a knock-on effect for employers, too.  Financial wellbeing is probably not something business leaders consider when they think about barriers to productivity, but it can be a huge contributing factor. Unexpected costs can mean the difference between an employee making it to work or not.

Flexibility of pay is also a key differentiator when it comes to workers choosing where they want to work. Over half (56%) of respondents in the same research stated that they were more likely to stay with a current employer if they were offered a flexible payment. It seems that what once worked for Pye Radio - even then, at a questionable degree - doesn’t fit today’s needs and expectations.

Flexibility in payment is the future. Given the technology innovations that have sped up the pace of life across all areas, it will grow increasingly hard for businesses to justify keeping hold of employee wages until the end of an arbitrary pay cycle.

‘Earnings on Demand’ is a concept that is gaining huge traction as more and more realise its benefits. It enables workers to take a portion of their earned pay, on-demand, increasing choice and financial flexibility and wellbeing.

This feeds into the basic human evolutionary wiring of the brain: when we expend effort, we desire to see the reward. After hard work, we want to see the results. People value money today as worth more now than it is later. The ‘time value’ is higher in the present, not in the future.

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And it doesn’t need to stop with the monthly payroll - UK fintech is some of the most innovative and forward-moving in the world. It has the potential to bring greater agility to many other legacy systems and processes.

If we look at the current challenge of rolling out payments to a large portion of the population - specifically when it comes to Universal Credit, SSP and furlough payments - the technology that is changing up the payroll system could quite easily be applied to other areas where a lack of liquidity right now is causing huge financial strain.

It seems clear, then, that the current system is largely broken. Workers have a right to their pay when they need it, and ‘Earnings on Demand’ could have the potential to invigorate it with huge benefits to all. It is time that we challenge the way we think about payroll in the same way we have done many other facets of life.

Michelle Shelton, Product Planning Director at MHR, explores how crisis management can be improved through automated solutions.

In any business, people are your biggest asset and your biggest cost.

It is why amid the turmoil of the coronavirus lockdown, business continuity has rightly focused on providing full support to millions of employees working from home.

The danger is that functions such as payroll and HR find themselves overlooked or overburdened. There’s often an assumption that these departments run on rails no matter what happens.

When almost everyone works from home, however, payroll and HR can be overwhelmed by the volume of queries about pay, expenses, bonuses, commissions, and the limitless range of concerns employees have about sickness pay, curtailment of earnings, family matters, and so on. This is compounded by changes in government legislation or rules about furlough or holidays that need to be considered. What is the right response from a technology perspective?

Cloud-Based Applications Are Proving Their Worth

It is imperative, therefore, that payroll and HR staff have access to the applications they use daily, so basic functions remain operational and they continue communicating across the business. But many organisations have found, to their cost, that remote working is not just a matter of lifting and shifting from the office to the home. A survey of companies with more than 1,000 employees last year found 52% were still using spreadsheets for payroll admin and more than a third were using paper timesheets. This is almost impossible to run effectively with a remote workforce. Businesses that have bespoke payroll systems operating from on-premises servers are suffering almost as badly, because these vital applications are now inaccessible.

The plain fact is that for many company payroll and HR departments there will be no alternative to the adoption of new, cloud-based applications that boost collaboration and streamline efficiency.

Implementation is swift. A major software and outsourcing provider with 650 employees has been able to shift to full remote working in three days, transacting more than 50 payroll functions quickly and seamlessly.

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Saving Thousands of Hours

A good example, from more normal times, is Swinton Insurance, which has 4,000 employees across the UK. It saved 132 working days through automation of absence authorisation and the introduction of digital payslips, having previously depended on spreadsheets. All the difficulties of employee queries and the confusion about the combination of pay and benefits were resolved through adoption of a cloud platform. The company’s HR department made the transition from a highly transactional unit to one helping drive up performance across the business.

Chatbots and Voicebots Offer Employees Instant Answers

Payroll and HR should also consider deploying chatbots and virtual assistant-type voicebots to help relieve them of the time-consuming burden of repetitive queries about pay and employment matters when employees are stuck at home. Within 24 hours it is possible to have a chatbot capable of answering 50 common queries. A more advanced cloud-based platform will offer these technologies. Employees can even upload receipts with a quick smartphone photograph, automating the administration of expenses claims and making the whole process much easier.

Automation has played a critical role in the advancement of financial technology, with tried and tested processes being replaced with modern, more efficient software. With all this innovation breathing life into businesses of all sizes and industries, the question may be asked about what role an accountant plays in the age of automation. Let’s discuss what the changes are, who they impact, and what an accountant's role looks like in the modern era. 

What financial automation have we seen in the last few years?

Not surprisingly, technology has had a significant impact on accounting businesses, departments and professionals, many of which implicate an accountants role as we know it. We have seen changes to employee tax and wages occurred globally, allowing employees to report on this data more easily and more frequently, with employees accessing their own earning statements centrally and independently. These changes have led to a need for more sophisticated software, many of which feature other functions that improve efficiencies through automation. Businesses can now comply with new legislation and complete payroll responsibilities without tasking a greater number of employees to that task. Australia has even coined this legislation change ‘single touch payroll software’, capturing the ease of the automation process. Accountants no longer need to conduct manual tasks, with automation offering expense tracking, payroll and invoicing. 

Bots are another automation that is rolling out to industries beyond just eCommerce, with bots able to capture and respond to a range of enquiries, allowing accountants to not be hamstrung to administrative requests. This communication method can be built into a business’ website or social media pages, but won’t be relevant for all business sizes. Outsourced accounting and payroll services are another automation that allows businesses to hand their financial responsibilities to a third party, contracting rather than employing professionals. 

Accountants no longer need to conduct manual tasks, with automation offering expense tracking, payroll and invoicing. 

What are the benefits of automated accounting processes?

There is a misconception that enhanced accounting services will nullify the critical element an accountant plays within a business, but this is not the case at all. These automated processes simply make operations more efficient, often adding structure and simpler frameworks where there were none. Automation also assures a certain level of accuracy that can’t always be achieved manually, and this is a significant consideration when it’s concerning payroll and business revenue. 

It’s not only accountants that stand to benefit from automation, business owners are also attracted to this option. Accounting automation can reduce or manage a department/business’ headcount, and taking these tasks offsite means that employers don’t need to factor in the physical space nor the employee benefits that come with employing another accountant. Less time in the details means your accountant can be more strategic with their time, which is why outsourced options have been wildly successful.

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What’s the future for accountants with automation continuing to innovate the industry?

Despite the automation that appears to be replacing certain accounting functions, the future is still bright for accounting professionals operating in organisations of all sizes. Automation innovations simply allow existing accountants to fine-tune their practice, implementing and optimising strategies with the mundane tasks taken care of. Whether accountants choose to implement software, outsource to a team or leverage reactive bots, one or all of these automation options can harness a greater output and overall performance of your business.

Automation is not something to be feared, as embracing its benefits can propel your business forward. Take a step back and assess what the growth plans are for your business, and explore what functions can be tightened in your financial sector. If there is an opportunity to enhance productivity and support your growth plans, trial some of these functions that are working effectively for those early adopters.

The extension of IR35 payroll legislation is forcing the private sector to reassess employee bases and business structures, and the big question is whether businesses are ready.

The short answer is no. There’s still a lot of work to undertake, and failure to fully prepare could result in significant labour supply issues, business continuity challenges and liabilities for tax, national insurance contributions, interest and penalties.

We’re finding many businesses still don’t know exactly how many off-payroll workers they have, and some haven’t yet taken steps to prepare. There’s also still a lack of confidence in determining employment status for contractors.

At a sector level there’s confusion in construction in particular, stemming from the interaction between IR35 and the Construction Industry Scheme for tax deduction (CIS). Many people have assumed CIS is a way to avoid IR35, but HMRC is clear: IR35 takes precedence over CIS.

If companies are robust in their preparations the move to IR35 presents a wealth of opportunity. It’s a time for businesses to re-evaluate their current workforce and project delivery operating models to ensure they really deliver the best possible value for money. Is it time to bring some roles on-payroll, or to engage a third party? With this assessment companies can determine the optimum model for future business growth.

According to Mark Judd, VP, HCM Product Strategy, EMEA at Workday, embracing technologies such as automation and artificial intelligence, payroll professionals can ditch processes, create more enhanced payroll services, and get closer to their employees.

Up to 97% of employers believe that employee expectations of their workplace experiences are changing, according to Aon’s 2019 Benefits and Trends Survey. Workers increasingly expect their employers to deliver seamless, personalised and human services, which mirror those they receive in their personal lives. This has prompted businesses to re-examine all the ways they interact with employees, with arguably the most important interaction being payroll.

Personalised pay

For years, companies took a one-size-fits-all approach to the services they delivered to employees. However, staff now expect smarter and more contextual interactions with their employers. Personalised payroll, adapted to the wants and needs of different employees, is a prime example.

An increasingly popular form of personalisation in payroll is on-demand pay. Through on-demand pay schemes, employers can offer staff greater flexibility over when they’re paid and offer the chance to access a percentage of their pay at the end of each day or week, for example. This increases employees’ ability to handle unexpected payments and can help them to better manage their finances. This could be highly valuable to employees, given that over 50 percent of young Britons currently live “hand to mouth”, according to research from Perkbox.

By personalising pay, businesses can recognise each employee’s situation and needs, enhance their experience and improve loyalty across the workforce.

Feedback loop

Feedback is key to successfully personalising pay arrangements and wider payroll functions. Not only does it help businesses to improve their services, but it also boosts employee engagement. After all, employees have come to expect their feedback to be heard and incorporated into process updates, in the same way, it would be in their personal lives as consumers.

Regular focus groups and routine employee surveys are great ways to gather feedback, and particularly effective if workers can contribute on their mobile devices. By connecting this feedback with the payroll team and wider HR function, organisations can make sure the voice of the employee is present when operational decisions are made.

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Providing education

Employees often request assistance in understanding their payslips and pay structure. In fact, over a quarter of respondents to the CIPP’s 2019 Future of Payroll survey reported an increase in the volume of payroll enquiries they received. A part of payroll’s function should be to educate the workforce on how payroll works. From promoting the payroll calendar to an understanding of payslips and the inner workings of pay, this will help employees across the workforce to get the most out of this function.

However, to meet staff expectations, for both education and seamless services, there needs to be a shift to digital payroll platforms. For instance, modern payroll technology can allow employees to access information about how they are paid and find answers to commonly asked questions. This, alongside process automation, helps free up payroll professionals so that they can spend time working with people to resolve more complex queries.

Embracing technology

Technology has a big role to play in the consumerisation of payroll. Complex, legacy systems that currently take several days to process payments and keep the employee at a distance will be consigned to the past. They will be replaced with simpler, less labour-intensive systems that take a more holistic view of the employee and their needs.

Solutions, such as machine learning, robotic process automation (RPA), blockchain and digital credentialing, will also create new opportunities for employers to increase process efficiencies and improve compliance management, so they can focus more on employee experiences.

Feedback is key to successfully personalising pay arrangements and wider payroll functions. Not only does it help businesses to improve their services, but it also boosts employee engagement.

The consumerisation of payroll

In a competitive job market where it’s difficult to retain talent, businesses should understand how each employee interaction impacts the overall experience and what can be done to improve it. No interaction is more important than the way a company pays its employees. Understanding the needs of each individual and giving them greater flexibility and control over how they’re paid can turn something that was once transactional, into something that feels a bit more personal.

Odoi Yemoh is the Founder and Executive Director of Reality Capital Management. Established in 2009 and based in Toronto, Canada, the firm offers tax preparation and planning, accounting, payroll, unemployment consulting, personal household budgeting, loan analysis, product management and marketing, as well as QuickBooks training and support.  

What would you say are the advantages and challenges of providing effective tax advice in Canada? In your opinion, how complex is the tax system in the country?

Providing effective tax advice in Canada is done through tax planning, which helps Canadians with reducing their income tax burdens through pension income splitting, RRSPs, Registered Disability Savings Plan (RDSP), Open Tax Free Savings Accounts (TFSA) and many more. There are also other benefits for employers, however, the generally expenses incurred by an employee are not deductible and there are certain specific exceptions. However, depending on the employee’s relationship with their employer, there may be unforeseen tax problems too, such as purchase employment assets, the benefit of using company car, loans from your employer, etc.

Canadian business owners find the tax system unfair because:

• Most new businesses have losses in their first few years after incorporation. However, the losses will be retained by the corporation and can be used against future corporate income.
• Corporate owners may have personal assets in the corporation or may be using money from the corporation for personal purposes, which may include unintended tax issues.
• Some owners tend to take out assets from the corporation, which then triggers personal tax consequences.
• Investments held inside the corporation are subject to tax rates, which typically are higher than the top personal tax rates
• Corporate income is taxed and the income flowed out by dividends is taxed too. While there is a measure of integration to reduce double taxation, some double taxation on dividends is still evident.

The Canadian Government has been imposing strict rules and regulations, which are preventing individuals and business owners from making profits. Individuals gain more from tax saving due to the benefit given to them. This makes it difficult for business owners to create jobs for the young people or strategize their business, because they are taxed based on their revenue and they’d rather lose in tax saving.

In what ways has the Canadian tax system transformed throughout the last 2-3 years?

Each year, the Canadian tax system becomes more complicated. The personal income tax was extended to most of the working population at high, progressive rates, and the corporation income tax was raised drastically and applied to excess wartime profits. Through the tax rental agreements, income tax jurisdiction was transferred from the provinces to the Federal Government. The point was to make income taxation the principal source of federal government revenue for financing Canada’s war effort and to lay the basis for financing the post-war welfare state. For a few years, the Federal Government has been mandating to make amends on the tax system for small business owners and this makes us think that there is a legitimate issue in trying to create tax fairness for all Canadian people. The Government has been trying to improve the fairness of Canada's tax system by closing tax loopholes and amending existing rules to ensure that the rich pay their fair share of taxes and that people in similar circumstances pay similar tax.

As the Executive Director at Reality Capital, how are you developing new strategies and ways to help your clients?

Reality Capital Management helps clients with accounting, taxation, auditing and financial services with the oversight of experienced accountants. We offer defining the profitability of companies through our financial education courses. Our clients are usually individuals and small businesses including Non-profit organizations in Greater Toronto Area (GTA) and outside of Ontario. Currently, Reality Capital Managements expanded on budgeting and debt consulting courses to the public, allowing students to make valuable financial management decisions. Developing these strategies helps us to serve our current and future clients better.

Contact details:
Odoi Yemoh
205-2200 Martin Grove Road
M9V 5H9
Toronto, Ontario.
647-388-5751.