REWARD
Saving for a rainy day: how payroll savings schemes can help employees’ financial and mental well-being
Michelle Sutton MCIPPdip, head of reward, SUEZ , explains how organisations can can begin to support employees with their financial and mental well-being through the use of payroll savings schemes
A s the head of reward at SUEZ, I’m proud to share our journey in revolutionising payroll savings. SUEZ, a global leader in recycling and waste management, has always been committed to making a difference. Our commitment extends beyond environmental sustainability to the financial well-being of our 6,000+ UK employees. Identifying the need In the wake of the pandemic and the rising cost of living, we recognised that financial well-being had become a pressing concern for many. We observed that the rates of people opting into our payroll saving scheme were low. This led us to identify an opportunity to help our employees build savings for unexpected expenses, such as broken appliances. Our goal was to make the process as effortless as possible, thereby overcoming the inertia often associated with signing up for such schemes. Key stakeholders and timeframes Our project was a joint effort involving NEST, in collaboration with our internal human resources and legal departments. The legal team was instrumental in performing comprehensive due diligence, and in clearly defining the roles and
responsibilities of all project participants. An important part of this process involved the careful revision of the contractual arrangement until a mutual agreement was reached. Throughout this process, there was a primary focus on the protection of our employee data. This included the implementation of pseudoanonymisation techniques to ensure complete anonymity. The project was successfully initiated in November 2021 and has been in operation for two years, proving its effectiveness and long-term viability. The trial We’re currently conducting a trial to assess the savings habits of new employees who joined after 1 November 2021. The trial involves a comparison between two groups: one that’s automatically enrolled into payroll savings with TransaveUK (with the option to opt-out) and a control group that’s offered the same savings plan but on an opt-in basis. The default contribution towards savings has been set at £40 per month. This amount aligns with the average salary advance draw down, striking a balance which is neither too burdensome nor too negligible for the average employee. The overarching goal of this approach is to encourage a shift in financial habits
among our employees. We aim to transition them from being borrowers, reliant on salary advances, to becoming proactive savers, thereby promoting financial stability and independence. Our approach Our innovative approach aims to simplify the savings process by minimising sign-up friction and countering inertia, the common tendency to avoid decision-making. This method, similar to pensions automatic enrolment, respects employees’ financial autonomy while eliminating the need for a full sign-up process. The only decision employees need to make is whether to opt-out. They retain the flexibility to: ● adjust their savings amount ● withdraw funds quickly if necessary ● pause or stop saving at any time. Early results and future plans The early results are encouraging. In the new worker trial, 97% of SUEZ employees who have experienced the opt-out approach say they either want their employer to continue to offer payroll autosave to new employees in the future or they don’t mind either way. At the end of October 2023, savers had increased by over 300%, with 1115 employees saving, bringing overall workforce take-up to approximately 20%. These results have meant we plan to make this a permanent feature of our benefits package. Considerations and barriers in implementing payroll savings schemes Payroll savings schemes, where they exist, are predominantly offered on an opt-in
“We aim to transition them from being borrowers, reliant on salary advances, to becoming proactive savers, thereby promoting financial stability and independence”
| Professional in Payroll, Pensions and Reward | May 2024 | Issue 100 42
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