REWARD
A pillar of support: how payroll can foster financial wellbeing
Anna Buckle, director of operations and impact at PayCaptain, discusses the expanding role of payroll in supporting employees’ financial health P ayroll is no longer just a back- office function dealing with the mechanics of paying wages. In the
many organisations are turning to their payroll departments not only to facilitate regular payments but also to provide support, advice and access to tools that help employees manage their financial situation more effectively. By working with financial wellbeing specialists, payroll departments can offer their employees access to a wide range of services that go beyond the traditional boundaries of payroll. This broader involvement with external financial organisations enhances the value of payroll services by embedding financial
employees to access their wages when they need them, employers can reduce reliance on high-cost credit or payday loans, which can quickly spiral into unmanageable debt. Look for suppliers that can offer access to this free of charge to employees, as nobody wants to be penalised with further charges in a financial emergency. Financial planning tools: there are features that can offer employees help to manage their income more effectively. These tools include budgeting aids, financial literacy resources and access to financial advice. By empowering employees with better information and tools, you can encourage employees to make more informed and responsible financial decisions. Payroll automated savings: payroll solutions that have easy to set up savings schemes allow employees to automatically save a portion of their wages each payday. These schemes are an easy and effective way for employees to build up an emergency savings fund, which is essential for financial security. Take some time to research and get the configuration right for this to be impactful. Rates of savers can vary from 0% to more than 50% dependent on how you approach it, so it’s worth getting some specialist knowledge here. Organisations such as Nest Insight focus on understanding the impact of
modern workplace, payroll is expanding its remit and increasingly playing a vital role in fostering employee financial wellbeing beyond coordinating with internal departments like human resources (HR) and finance. Payroll teams are now working with external organisations, such as financial wellbeing specialists, government bodies and third-party financial services providers. This broader approach reflects the growing recognition of the critical importance of payroll and its high levels of engagement as an opportunity to support better financial wellbeing. The increased focus on financial health is a response to several trends, including the rising cost of living, increasing levels of personal debt and greater awareness of the impact that financial stress has on employee productivity and mental health. Access to services According to research by the UK-based Money and Pensions Service, nearly half of the working population regularly worries about money. This financial stress can manifest in a number of negative outcomes, including reduced workplace engagement, increased absenteeism and lower overall productivity. Recognising this,
wellbeing as part of the employee experience. Rather than individuals
turning to high-interest loans or payday lenders during difficult times, they can access supportive, employer-endorsed financial services directly through payroll. This model is particularly important in mitigating the effects of financial stress and helping employees to build long-term financial resilience. Selecting a partner Features that payrollers could be looking out for when picking a partner that can provide a more holistic approach include the below. On-demand pay: this is a critical innovation, as many employees face financial difficulties during the month due to unexpected expenses. By allowing
| Professional in Payroll, Pensions and Reward | December 2024 - January 2025 | Issue 106 43
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