Payroll insight
Stuart Price, of MHR’s legislation team, argues that now is the time to act A time to relax?
R eflecting on the latest Autumn Statement, the first by both a new Chancellor and Government, the landscape appears to be calmer with the prospect of fresh opportunities. After many years of change and upheaval, requiring both significant technical and payroll expertise to understand and deliver, the future appears different. The major challenges of real time information and automatic enrolment, along with smaller changes including the ending of contracting out and the introduction of a new student loan type, can be assigned to history with a satisfaction of what payroll has achieved. For various reasons, primarily Brexit and the subsequent new government, the focus has changed. Is it perhaps that priority is focussed on the UK leaving the European Union and effort to minimise the impact of this has taken precedence? Are changes to legislation that impact payroll no longer considered critical when compared to other priorities? Whatever the reason may be, the respite on the payroll horizon provides opportunities but also challenges. Opportunities will present themselves for payroll departments to further develop their people and increase engagement with their customers. Now is the time to look at the talent within your organisation and how to develop it. Succession planning is a key component of both talent management and workforce optimisation, identifying and developing internal people with the potential to fill key business leadership positions within the organisation. Effective succession planning enables organisations to build a series of pools of potential employees to fulfil key business roles,
matching key competency and skill requirements to that of the individuals and providing a clear pipeline of potential successors and their readiness for promotion. Succession planning utilises key performance data together with employee potential data to identify those high-performing specialists against the unpolished diamond or the top talent against the low performers. Those identified successors will then have a clear development plan to work towards developing themselves to fulfil those key business roles in the future. With the support of technology, the focus for the managers can be having good conversations with their people. Having those good conversations on roles and career development sends a message that the employee has something to offer, is valued and has the potential to develop and evolve. Challenges will see the reliance on current talent increasing with the impact Brexit will have on the UK’s talent pool, and will therefore have a significant effect on organisations’ strategies for workforce planning. Plan to get creative. The challenge of continuing to fuel an organisation with the best talent may be the making of the human resources function in some organisations. With access to a potentially smaller pool of talent, organisations will need to look horizon provides opportunities but also challenges ...the respite on the payroll
for more ways to attract and develop the internal talent needed for continued success. Opportunities for software to evolve and benefit from upcoming technologies will arise. These will include the use of smart talent tools that allow you to optimise your talent resources and boost their engagement level. In summary, we are approaching a time allowing an opportunity for us to focus on what we have desired to achieve but never had the time and resources to accomplish. Do not, however, see this as a time of relaxation as there is still work to be done. In the short-term we have the apprenticeship levy and Scottish tax rates and thresholds, for which your payroll software should now be compatible. Gender pay reporting is an ongoing discussion point for which regulations should be available soon. Longer term, the review into the closer alignment of income tax and National Insurance contributions (NICs) has recently been published and is awaiting Government response. This review recommends that NICs be calculated in the same way as pay as you earn (PAYE) income tax, but also suggests a five-year timetable for the full package of reforms. HM Revenue & Customs is also becoming a digital organisation with a third-party tax software and an application programming interface vision. As the scope of the projects expands so will the impact and changes to PAYE. Until such time that these events arise, let’s not waste this opportunity. Whether this is a review of your internal processes or questioning of the plans of your payroll software provider, act now. n
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Issue 27 | February 2017
| Professional in Payroll, Pensions and Reward |
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