Employment
Samantha Mann MCIPPdip MAAT
Katie Duxbury MCIPPdip
Brian Sparling ChMCIPPdip
Jaspal Randhawa- Wayte ChMCIPP
Jill Bonehill ACIPP
Abishek Agrawal
Jason Butler
do not work on a monthly cycle, which is one of the reasons I think we see 4.1 average transactions a month. Anthony Cronin: In the USA, 37% have selected fortnightly pay frequency with our app. Fortnightly seems to be the sweet spot. I see the value of on-demand payment coming after a worker’s shift. Take your money every day. Jason Butler: The idea that advance pay avoids debt is an illusion. What it does is meet that basic human need to feel in control and safe. If you are not feeling in control and safe, you will make irrational decisions. Another thing is that an advanced pay app is a proxy for people learning how to budget, how to spend. It’s not about employers dictating and telling people how to do stuff, it’s making it easy for people to develop the right, positive habits. It’s the employer’s responsibility to understand what employees want. Do they want a little podcast? Would they like an alert or a little challenge? It’s about providing infrastructure, an ecosystem of products. What can we do not to make these little interventions like education or a course? Perhaps reminders to the app users when drawing down pay such as “Did you know if you save £10 of that money you’re going to draw over here, and if you did that for a year, you’d have £500?” Some people will be self-destructive with money; maybe they’ve got other issues going on. And there’s nothing an employer can or should do to help them, to stop them self-sabotaging. But this doesn’t mean you can’t build an ecosystem of products, messaging, different forms of stuff. For example, analysis by Neybar of 50,000 people through their platform asked how they prefer to be communicated with about money matters. Almost all, 90%, said email was the big thing; but if you did just emails you
wouldn’t do podcasts, videos, animations, nudges and alerts. But the reality is we don’t always know what is going to be effective, whether educational-wise or awareness-wise. We cannot always assume that what people tell us is what they really want. None of us wanted an iPhone in 2006, but now we’ve all got one. Jaspal Randhawa-Wayte: Jason’s points about the ecosystem of the product having little nudges and alerts as well when a user request an advance of pay, really interests us. I think it’s a balance between what should be pushed out to users via the product, but ultimately they are responsible for their own destiny. It is their decision at the end of the day. Katie Duxbury: I agree with a lot of the comments here even though actually some of them seem to be polar-opposite viewpoints. As an employer you must know your people and the problem that you’re trying to solve for them. We were finding that though there were shifts available with us our carers were picking up shifts with other employers because they would get the money quicker. So, there was a business imperative here for us. James Herbert: We’ve recently conducted a survey of our users and had a great response. Some respondents had been furloughed so the findings are interesting. Towards the end of the pay cycle early in March we saw a 16% spike in the number of transactions being made, which I think comes back to that safety net mentioned earlier. It’s about having money to use in that time of crisis and need. Usage levels have actually declined since then as things have settled down – perhaps because stockpiling of essentials has diminished. What we have also found is that it’s not just the younger ones using the product; indeed, we’ve upgraded the tablet app for use by older workers. So usage is across all
society and the entire workforce. Everyone will have the option, and that control is really powerful, helping education and managing financial stress. Abhishek Agrawal: I think it’s important to understand that though we’re not living from pay day to pay day, those working in the care sector or on minimum wage do. It can be presumptuous to think about what’s good for them. Before we make a decision, we need to understand their situation. Samantha Mann: Everybody around this table who provides these services is reputable. But looking ahead, as pay on demand becomes more popular and increasingly commonplace, how do we protect against the less reputable service- providers getting into the market? James Herbert: I think the biggest threat is a bad actor coming in and undermining the industry. The key really is that we all need to take this very seriously and operate with the highest level of ethics and standards. The market is big enough for all of us. I think that over time we will be regulated specifically rather than just aspects that we provide. How can we help develop the right regulations for this industry? We need to work with the Financial Conduct Authority. I believe this will happen over the next few years, but in the meantime I think we are just learning to operate with the highest level of integrity. Brian Sparling: In my mind, it’s about giving people tools that they can use in a way which suits them. But then we are going to find people in some cases cannot pay their bills and their mortgages; and then they might say to us as employers, or payroll providers, that we got them into this situation. We then become the next raft of claims, like PPI, like payday loans. We should be relying on employees to act and behave like adults, but we know that sometimes that is difficult. n
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| Professional in Payroll, Pensions and Reward |
Issue 63 | September 2020
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