How we talk

The huge increase in internet and smartphone usage across the country is rapidly changing the way people want to interact with the businesses that employ them. As they grow more accustomed to inputting their personal data online, employees now expect a digital experience at work too, especially in the areas of payroll and employee benefits. In order to remain competitive, small businesses must start to automate their processes, to make it simpler and more efficient for employees to access their personal details, wherever they are. Not only will this make for happier employees, it will also provide substantial cost-savings to small businesses and free up resources that can then be redistributed elsewhere across the business.

Growing internet and smartphone adoption

Internet access and smartphone adoption is having a profound effect on our society. In 2015, 86% of households in Britain had internet access and the government’s ambition is to see this figure increase significantly by 2020. Meanwhile, 76% of UK adults now own a smartphone, according to Deloitte, a number that just keeps on rising. This means that at some point soon, almost every adult in the country will have internet access directly in the palm of their hand.

As a result, more and more people want to start interacting with their employer – when it comes to both the giving and receiving of information – in the same way they would do with their bank or their friends: digitally.

This is fast becoming the norm, especially as people are increasingly comfortable with sharing their personal information online and supplying data electronically.

Employers now need to catch up and ask; how do I automate my processes when it comes to HR, payroll and benefits? How do I make that a seamless data flow of information?

The new digital world

In this new digital era, machines talk to each other and share data, and information can now be readily cascaded between systems. For example, it’s rare these days that a candidate will apply for a job with a paper CV and cover letter; it’s much more likely that they will go through a web portal.

That’s the start of a person’s digital life with their employer, as they go from being an applicant, to a candidate, to an employee. In fact, employers these days rarely have to touch their employees’ personal data, as it’s all been supplied by them. This is of huge benefit to HR managers as they don’t incur any costs associated with inputting that information themselves.

As is evident from the widespread closure of high-street bank branches and the rise of banking apps, we as a society now actively look for ways to store our financial data in an electronic format.

A payslip, for example, is likely to be one of the most important banking documents someone will receive on a monthly basis. For an employee, it’s their statement of value to the company they work for. To still receive it in a paper format and to have to file it away feels positively archaic.

As more and more Millennials enter the workforce, there’s an increasing expectation that if you are employed by a company, you’ll receive a digital copy of your payslip and P60.

Competing for the best talent

Businesses are operating in a buoyant market currently, with fierce competition for talented professionals. Small businesses, especially, are competing for talent, and in order to succeed, they should offer something more than just a wage. They need to create a value proposition for their employees.

What’s more, they are now not only competing against each other, but against big companies too, thanks to the huge growth in flexible working. Small businesses used to thrive on employees who weren’t prepared to travel more than 10 miles from their homes to work, but this talent pool is now shrinking, thanks to technology, which allows people to work for a multinational company from their desk at home, wherever they live in the country.

In order to compete with big players like Vodafone or Google that have great employee benefits, small businesses need to offer a similar proposition, granted on a different scale, but this can be costly.

In the payroll and benefits space particularly, providers like Sage are now giving self-service functionality to small businesses, in areas such as online, self-service payslips, and HR online products, which take basic HR information and give employees access to it.

Readying businesses for change

To begin their digital transformation in the areas of employee payroll and benefits, companies need to work out which parts of their business they want to automate, how it will help them to cost save, and how their business processes need to change to accommodate new ways of working.

Employers also need to make sure that their employees are ready for a digital switchover, and can share the information needed to implement digital processes company-wide.

In the past, for example, people might have said that they didn’t have an email address. Now, thanks to social media, most people have one, even if it hasn’t been provided by their employer, as is often the case for those working in the care, hospitality or retail sectors who don’t work at a computer all day.

Business benefits

Smart businesses are embracing ‘digital’ at pace. If you were to say four years ago that a 10-employee business would be looking for online payslip functionality, I wouldn’t have believed you. We’re now seeing a widespread increase in companies signing up to online payslips through our Sage 50 payroll software.

Sending payslips digitally is now a no-brainer for employers; it delivers an improved employee experience and it can also save them money. Our payslip solution can give businesses a return on investment in three months.

Effectively, employers are taking what would have cost 64-85p per payslip, per employee, per month, down to around 12p per employee, per payslip, per month. This is based on a market assessment of the current payslips and posting charges, based on the average employee count we see in the Sage base (correct as of June 2016). Because the payslip is in a digital format, the overhead is far smaller.

At one business I know, they could afford to put an extra percentage point into people’s pension pots simply because of the cost-saving they made through automation. This in turns provides an additional employee benefit.

Cost saving or employee demand?

Pressures are mounting on businesses as employees start to expect digital processes to be in place at work. And it’s not just from generations X or Y; it’s prevalent across the whole employment spectrum.

At the same time, employers are also looking at ways to cut costs, and the best way to do that, when it comes to managing people, is by reducing the amount of data they need to input manually.

For a business with 150 staff, for example, someone might have to stand at the printer for about a day a month, just to organise paper payslips for everyone – it’s a huge waste of resource. However, if you’re sending payslips out digitally, you can click ‘send’ and it’s done and delivered within seconds, freeing that person up to work on other, more valuable things.

Advice for businesses

So where to start? First thing’s first; employers need to speak to their current supplier and see what digital solutions are on offer. Once they’ve done that, it’s a case of working out what to automate – recruitment, expenses, holiday or absence time, for example. Start with one process, like payslips, and go from there. Look at where, as a business, you lose most time doing paperwork.

Thirty five per cent of employees said if they were paid incorrectly, they would start looking for a new employer, according to a survey by Sage UK, carried out in June 2015. Therefore, reducing human error can only be a good thing for businesses. The 24/7 nature of the process also means that employees can access their personal details whenever and wherever they want.

Putting your employees first

Employees often determine whether a business succeeds. Looking after and managing employees is a huge priority for businesses; they spend a lot of time thinking about how their employees benefit their business. The processes behind payroll and recruitment should be seamless to support employees effectively and liberate them to focus on what they need to.

Dan Docherty

Head of Payroll Product Marketing

www.sage.com