FEATURE TOPIC
on the customer experience. Our standards have always been very high when it comes to the level of service and professionalism we provide. I don’t think the environment we’re operating in has influenced our commitment to that. How secure are cloud-based systems? What’s the likelihood of an attack in this brave new world of cloud-based payroll? ND: Cybercrime is claiming new victims every day, especially as the number of global internet users increases annually. Globally, there were over 21 billion cyber breaches in 2021, with a new attack taking place somewhere on the web every 39 seconds. Although cloud-based systems provide better security, thanks to remote warehousing and encryption, 79% of companies have still experienced at least one cloud data breach in the past 18 months, so it’s very likely payroll professionals will experience some form of attack in the future. It may save to prepare and test for such an occurrence in advance. Globally, there were over 21 billion cyber breaches in 2021, with a new attack taking place GK: Despite high-security protocols, the threat of cyber-attacks is still a frequent risk. Suppliers of cloud-based payroll software must be ready and waiting with strict security procedures in place. These should be regularly tested and updated to comply with ISO 27001 certification, Cyber Essentials and General Data Protection Regulation guidance. Without this, users won’t be comfortable or have trust that the technology is a reliable solution. MM: We haven’t seen a reduction in the number of attacks on cloud-based systems and infrastructures, so firms should ensure they have the correct protections in place to ensure the security of these. Whether you use a cloud-based solution or house your payroll system on your own servers, somewhere on the web every 39 seconds
it’s important the correct infrastructure is in place. Regular penetration testing should also be carried out, to ensure your security protection is working accordingly. Firms should be ensuring that, as a minimum, any chosen payroll system or service provider holds the relevant infrastructure accreditations, including ISO 27001 and Cyber Essentials Plus, along with having strong disaster recovery and continuity plans in place. Do you think pay on demand is socially responsible in budget-stretching times? Or is it teaching people they don’t need to budget and to just live day-to-day? OD: Having young adults in the family, I’ve come to realise they already live day-to- day – the way they shop, the way they work, the way they spend free time is all day-to-day, and very different to the way things were when I was the same age. For many younger people, it’s easier to budget day-to-day as this is what they’re used to. I’ve also noticed that young people don’t like waiting for anything – everything in their lives is already on demand, such as TV programmes and films, products that get delivered the same day, fast food delivered to their door, information available at a click of the button. So why not get paid on demand too? The world has changed and so have the demands and needs of people. MM: There’s no doubt that all areas of payroll are becoming more demanding for data and fast turnarounds etc., along with clients wanting to reduce the number of times they run the payroll to accommodate paying their staff. This has seen the introduction of new methodologies, including pay on demand. It’s recognised that individuals are already experiencing a strain on their finances, so firms are looking at several ways to help support their staff members’ well-being, including their financial well-being, so this is one option available to them. If run correctly, with the right restrictions on the amount of salary that can be drawn down in advance, supported with strong financial advice and tools, providing staff with the ability to draw down on their earnings when they require them could remove the need for them to consider alternative and costly loans or solutions. This is a growing market, so it’s
essential that firms review several different providers’ offerings, support and fees to ensure this benefit doesn’t place additional financial burden and other concerns onto staff members. SM: Pay on demand is a great opportunity for employees to have the flexibility with their pay that they have with other areas of their lives. Many people already budget based on their periodic paydays (monthly, weekly, etc.), so, to reassess their requirements and request payments at differing points in the month wouldn’t immediately impact them. I believe with the offering of pay on demand, most employees would still opt to be paid periodically, to help them budget. What are the risks of pay on demand from an operational point of view? OD: If you have the right partner, then there should be a low risk. It’s really worth investigating vendors and the processing methods to find the best fit for your organisation. MM: For this to run correctly, it’s crucial that the time worked by an individual and salary earned is captured and provided on a regular daily / weekly basis. This ensures the drawdown of the salary remains within the limits the firm sets. A firm must be able to monitor this correctly. In addition, it’s important the restrictions on the drawdown percentage of salary take into consideration all elements of the final pay, including: l salary sacrifice l pension and benefits schemes l court orders l tax implications. This ensures the staff member isn’t left with insufficient or limited funds in the following pay period. SM: For me, the main issue is complexity. Payroll is already a complex area, with multiple, often conflicting, facets. I don’t see that pay on demand is going to make this any easier or reduce the workload. Payroll is fundamentally process-driven, with strict deadlines and responsibilities. To be reactionary with regards to employee requests for payment (as it would be with pay on demand) may be problematic, particularly for small teams or standalone payroll roles. However, payroll is adaptable and with a forward-thinking attitude, pay on demand shouldn’t pose any additional operational risks. n
| Professional in Payroll, Pensions and Reward | October 2022 | Issue 84 36
Made with FlippingBook - Online magazine maker