CIPP future of payroll survey report 2019

CIPP FUTURE OF PAYROLL REPORT 2019

to that assessments for automatic enrolment and AEOs / DEOs along with NMW and salary sacrifice arrangements to name but a few and pay on demand brings almost insurmountable challenges for payroll.

But, looking at some of the services in more detail, it appears that many of the organisations are actually offering a type of loan service, either to the employee or to the employer, and then the service becomes more like a benefit in kind rather than actual genuine payment on demand. This puts a different perspective on the subject and may indeed prove to become more common in the future. But as with all loans, they must be paid back and there is always a charge for such services, with some charging the employer to give employees the benefit of being paid on demand, and others charging the employee to withdraw their money early. With many workers living from payday to payday, this service could indeed become more common, but may not necessarily offer the long-term financial well-being suggested, in fact, it could make matters worse given that loans always need to be repaid. If an individual finds they have a month left once the money has run out, the following month they will run out of money even sooner because they have paid off the amount they received early the previous month. To refresh your memory, the CIPP also wrote the following article back in June 2017 when Deliveroo were offering their riders pay ‘payment by delivery’: https://www.cipp.org.uk/news-publications/news/deliveroo-offers-workers- pay-per-trip.html Have you heard of pay on demand? According to the answers only 23.73% had heard of ‘pay on demand’ and out of those only 8.82% have considered it for their employees. As to how many plan to introduce pay on demand in the future, only 3.92% said ‘yes’ and 23.53% stated ‘maybe’. The ‘gig’ economy may change the way in which people are paid now and in the future. In addition, the flexibility offered by companies will invariably play a big part in talent attraction. Also, as more and more Millennials come out into the work environment they won’t want to wait until the end of the month/week to be paid and some could argue that as good corporate citizens that they shouldn’t have to. Consider also the rise of employee financial wellbeing that will eventually make a big statement in the UK i.e. companies taking the lead in helping employees understand their financial implications linked to their available funds/salary/wage. In the US, PWC (https://www.pwc.com/us/en/industries/private-company-services/library/ financial-well-being-retirement-survey.html) in their 2018 survey stated that: This is a subject that we need to keep a close eye on in the months to come.

“EMPLOYEES WANT HELP WITH THEIR FINANCES

MORE THAN HALF OF ALL EMPLOYEES WANT TO MAKE THEIR OWN FINANCIAL DECISIONS BUT ARE LOOKING TO HAVE SOMEONE VALIDATE THAT DECISION.”

In addition, they commented:

“54% OF EMPLOYEES SAY THEY WANT TO MAKE THEIR OWN DECISIONS, BUT WANT SOMEONE TO VALIDATE THAT DECISION”

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