The challenge Many organisations still rely on outdated, admin-heavy and inefficient recognition models. Shifting requires not just a technology update, but also a mindset change, from sporadic, one-size-fits-all gestures to continuous, personalised and universal recognition. The reflection Payroll sits at the centre of the employer- to-employee financial relationship. When recognition flows with payroll in mind, it becomes more valued. Looking ahead: education and empowerment If 2025 has shown us anything, it’s that payroll is becoming more than an admin function. It’s the engine room of value delivery. But challenges remain. The biggest isn’t technical, it’s educational. Too many leaders in HR and finance still see payroll as transactional. Too many employees remain unaware of the tools available to them. Unlocking value requires clear communication, leadership buy-in and relentless simplicity in execution. The opportunity for the year ahead is to build on the momentum of change. If payroll continues to embrace its role as the ‘source of the Nile’ for employee financial wellbeing, then every organisation can deliver more with less. Employees will feel the difference not just on payday, but every day in between. o
focus on simplicity, visibility and universal acceptance. The lesson of this year is clear: value must meet employees where they already are – in their wallets, at the till, in the moment of spend. Tackling the overdraft trap YouGov Finance research 2 shows that 30% of UK employees go into their overdrafts every month, and there are almost as many credit cards as there are people. With charges on overdrafts from any high street bank at 30-40% interest and most credit card balances not being paid off in full, the cost of short-term credit has become punishing.
fees worsen the problem, rather than being a tool for budgeting and wellbeing.
The reflection Payroll is no longer just about processing pay; it has a vital role in preventing financial harm. By reducing reliance on overdrafts, credit cards or high-interest credit, payroll can directly strengthen employees’ financial resilience while showing genuine care at every level. Compensation will always be the number one priority for employees, and delivering it in the most efficient, supportive way will be the next major step in engagement and company culture. Recognition and gifting made simple Recognition is often spoken of in warm terms but executed in clunky ways. Traditional gift cards come with expiry dates, which mean 10-20% of funds are lost to ‘breakage’, have limited retailer acceptance and administrative headaches. Human resource (HR) teams burn time managing schemes employees often find uninspiring. The successes Points-driven employee gifting has emerged as a powerful alternative. Employers can: l send points or vouchers instantly with personalised messages l avoid breakage, as funds don’t expire l provide universal utility – spendable anywhere, any time. This model has been particularly successful around seasonal peak gifting like Christmas, but also in encouraging ‘little and often’ recognition throughout the year.
The successes Some employers have introduced payroll-linked tools to help staff budget more effectively and avoid borrowing. These include:
l budgeting tools: employees can earmark part of their salary onto a payroll-linked card, creating a separate pot for essentials l free on-demand pay: safe, controlled, access to what’s already been earned
but is yet to be paid. Delivered for free to employees and settled automatically through payroll.
The challenge Earned wage access, if poorly designed, can be mistaken for credit. Too often, providers charge employees and what looks like a small fee for quick access can translate into an extortionate annual percentage rate or ‘APR’. Without free distribution, education and safeguards, the risk is that user access
Links corner 1. https://ow.ly/ktjn50Xqrkm 2. https://ow.ly/Q1ol50Xqrl1.
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| Professional in Payroll, Pensions and Reward |
Issue 116 | December 2025 - January 2026
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