Payroll shines in a year of rising costs
James Gozney, Founder and Chief Executive Officer, Aslan, reflects on the successes and challenges of 2025 for the pay professions – it’s been a busy year
Introduction Few years in recent memory have placed payroll and reward teams under as much pressure as this one. Inflation continues, National Insurance (NI) hikes have hindered employers’ ability to help employees to meet increasing costs and pay rises, when afforded, have been swallowed by rising day-to-day expenses. It’s little wonder that, for many employees, the focus has shifted from long-term benefits to anything providing immediate, tangible value. Payroll is traditionally a cost centre – the engine of administration and compliance. But in a turbulent year, payroll has stepped into the limelight as a platform for value. Leaders have relied on payroll to deliver a holistic pay experience to stretch tight corporate and employee budgets, promote financial wellbeing and drive employee engagement, affordably. This reflection looks at some of the year’s key successes, challenges and what to consider as we look forward.
The successes 1.) Employers who implemented an ‘opt-out’ pension salary sacrifice scheme saw material savings, freeing up funds that could be saved or reinvested into benefits, wellbeing or retention programmes. 2.) Employers who moved from opt-in to opt-out frameworks saw participation levels rise significantly. The challenge Despite the clear financial benefit and rising take-up, awareness among SMEs remains low, and many leaders continue to confuse a ‘salary sacrifice’ pension with automatic enrolment contributions into a standard workplace pension. Others worry about complexity in switching or ensuring national minimum wage thresholds aren’t breached. The reality is that with clear education and provider support, implementation is straightforward and substantial savings can be easily unlocked, almost immediately. The reflection This is an area where payroll has a chance to step out of the shadows. By building awareness and demystifying the process, payroll can become a driver of savings for both employees and businesses. This is exactly the kind of ‘hidden win’ organisations are crying out for in a tough economic environment.
of many reward programmes for over a decade, but they continue to struggle with engagement. Often, employees face multi- step voucher journeys, clunky logins and offers that feel distant from their everyday spending. The result: low usage, low impact and low perceived value.
The successes Forward-thinking employers have
been experimenting with card-based reward systems which are payroll- embedded and offer much broader and deeper value. Unlike voucher portals, card-linked rewards are: l simple – all you do is tap l front-of-mind at the point of purchase l universal, working everywhere from the local corner shop to overseas holidays l easy to administer. Data shows that engagement transforms from ‘occasional clicks’ to 30x monthly uses, on average, when rewards are instant, visible and friction-free. The challenge Many organisations remain tied to legacy contracts with discount providers, reluctant to shift even when engagement is stagnant. Breaking away requires courage, but the payoff in employee satisfaction and demonstrable value can be significant. The reflection If the goal of a benefit is to be used and appreciated, payroll and reward leaders must
Pension salary sacrifice: finally in focus
Salary sacrifice is hardly a new tool, yet it remains one of the most underused in the UK. A staggering 68% of small and medium-sized enterprises (SMEs) still haven’t enabled an ‘opt-out’ pension salary sacrifice scheme, according to Howdens 1 . This represents a huge, missed opportunity for cash-strapped SMEs (and employees) to save on NI contributions.
Moving beyond discount portals Discount platforms have been a feature
| Professional in Payroll, Pensions and Reward | December 2025 - January 2026 | Issue 116 22
Made with FlippingBook - Online magazine maker