REWARD
are looking for. This could range from loan support to savings products tied to a third- party provider. Many employers won’t be legally allowed to offer specific financial advice so it’s best to link up with a partner, such as SalaryFinance, to provide that. HT: It does not make sense for employers to work out a financial awareness plan, but with the help of a good consultant, a staff survey can assess demand. Is there a risk that ‘pay on demand’ can lead to increasing debt? MB: This is a huge risk – it’s extremely difficult to get out of a debt spiral. A key point here is that if you choose to work with a third party offering pay in advance or loan consolidation, the employer should conduct thorough due diligence. This should include what flags are in place to identify employees regularly accessing support and how these employees are then communicated with. If the employer does not feel confident conducting this themselves, a financial wellbeing specialist who knows the market and the questions to ask can help. VG: Pay on demand as a benefit has been slow to adoption in the UK, being more prominent in the gig economy and hospitality sectors. As a concept it allows for employees to access earned income once it has been earned and not wait for a traditional payday, which can support employees should they have an unexpected expense. The CIPP’s 2020 Future of Payroll survey and report showed that just 3% of respondents have introduced pay on demand within their organisation, with an additional 4% stating that they planned to introduce this within the next twelve months. When delving deeper, there is a concern amongst payroll professionals that pay on demand could lead to financial problems and increased debt if used continuously. This is a concern which can be mitigated through the introduction of financial awareness training alongside pay on demand. The CIPP hosted an online roundtable on the topic of pay on demand that was attended by subject experts, and those working within the payroll sphere. Similar themes emerged during the discussion, where people confirmed that where they were operating a pay on demand scheme
...the payroll team should be included in the pensions governance committee, which comprises a number of specialisms...
they advised that they had performed a lot of research and study into financial wellbeing and how funds drawn down prior to contractual pay day were being used, and if the use of the scheme actually left individuals in a negative financial position. HT: There are risks of this happening, but equally risk that if money isn’t available mid-month, the consequences could be worse. Should salaries in the payroll profession be reviewed if payroll workers take on these additional activities such as providing financial awareness? MB: Just as we have seen chocolate bars reducing in size within the same packaging, many of us have experienced a similar loss in value in salary – where more has been expected for no increase in pay. The pandemic has questioned why key workers are often experiencing below average salaries. The question of how much we value people and their contributions and how this is recognised in the form of pay is a topical discussion point. While employers struggling with the effects of the pandemic may be loath to increase pay, they could offer more to employees perhaps in terms of time within
the working day to spend on financial arrangements – particularly where these relate to employment, such as getting on top of understanding and planning for retirement or submitting cash plan claims. This would benefit payroll as well as other employees. VG: The role of the payroll professional is changing and will continue to change. With it, payroll professionals have a responsibility to highlight to their employer the value of the role that they perform within their organisation to ensure that their salary is reflective of that. The CIPP works with a number of recruitment providers to benchmark salaries in the profession and encourage our members to engage with salary benchmarking to understand their value. KY: In the same way that if any profession were to take on additional workloads, or professionals adding responsibilities to their job description, a pay review should be undertaken. It’s important to view how much of the role would be dedicated to additional activities and whether that involves upskilling for the individual or a pay rise and career progression. HT: Yes, payroll should be encouraged to press for higher wages for taking on more responsibility without any agreement from the employer that this will result in proper reward. n
| Professional in Payroll, Pensions and Reward | April 2021 | Issue 69 38
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