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October 2023

Employee engagement starts with payroll
  • Scott Read
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Why employee engagement starts with the payroll team

Why employee engagement starts with the payroll team 1280 720 Scott Read

National Payroll Week is an occasion designed to mark the hard work payroll professionals do to keep Britain paid. And they really do.

In a year that started with CPIH inflation rates of 26.7% caused by housing fuel costs, payroll is becoming the most important department in every business and the payroll team is potentially carrying the weight of success on its shoulders.

35% of UK employees would find another job if they were paid incorrectly even once and 51% would lose trust in their employer and resent them. Based on this, you could be seeing more than a third of your staff walking out the door if the payroll department mess up just once – this is huge. Overlooking payroll processors as a business-critical role opens companies up to risks that aren’t just limited to financial in nature.

The first risk to consider is morale.

If an employee is paid incorrectly, they lose trust and confidence in the management and they might be vocal about it too. You can imagine it “we’re not priority” “we’re an afterthought” “I bet the boss still got paid”.  Of course, the thoughts will depend on how big an error is, how frequent errors are and who is on the receiving end, but they can quickly create a culture where people question the management’s integrity – if they don’t care enough to get my pay right, they certainly don’t care about what’s going on at home. Low morale can lead to a reputational issue internally but with the growth of review sites such as Glassdoor, internal reputational issues can quickly become external issues not only impacting retention but talent acquisition too.

Do it once you might be ok, do it more than once you’re in trouble.

At this point any change (good or bad) can raise suspicion. If you pay people a day early but don’t communicate why, they’ll think you don’t know what you’re doing. Pay people a day late, they’ll think there’s a cashflow issue. A lack of trust here will make employees question their faith in the leadership team to make decisions in other areas of the business and ultimately their confidence in the business and its products or services. And no matter what the cause is, people won’t 100% believe your reasons.

I believe people leave jobs for more money.

Yes, more and more people are considering culture and employee benefits over salary but ultimately in a time where less and less people have savings for a rainy day because it’s been raining for two years, pay matters and is usually the deciding factor. So, a reputation for paying people late or incorrectly isn’t a look you need to be going for.

Employee benefits are not contractual in nature and can be removed from an employee’s contract without consultation. Being paid correctly on a certain date is. In essence, if you mess up payroll, you mess with people’s contracts of employment. Employee benefits don’t mean anything if you have a bad culture anyway. So, for those companies that attract people based on a great rate of pay if you don’t deliver it on-time and correctly – you better have an out of this world company culture to make them stay. Of course, chances are you won’t if you have payroll issues.

Payroll is complicated.

The importance of paying people correctly isn’t new – but when you consider that a third of UK workers are now living payday to payday the potential impact of payroll errors and mistakes has higher stakes.  But payroll is complicated. You only have to look back to last year when bosses of high street giant Next apologised to staff for underpaying some of them by up to £200 a month due to a payroll error and just a few months ago WH Smith, Marks & Spencer and Argos were among a list of companies facing financial penalties for payroll breaches.  If the big boys can make mistakes, it’s a stark reminder to check in with your payroll team or provider to assess the potential risk to your business. If new legislation is announced, how is it handled? Do they have the reliable updated software to comply automatically with significant changes?

Ultimately if you want an engaged workforce, check in with your payroll team or provider first. If you want to invest in employee benefits to improve company culture, check in with your payroll team or provider beforehand. If you genuinely care about your employees and believe they are the key to business success, you guessed it check in with your payroll team or provider.

Happy national payroll week!

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Scott Read, CEO of Employee Services at Growth Partners

Scott Read Growth Partners discusses the link between employee engagement and retention

Scott Read is a results-driven business leader with a proven track record in helping employers strategise key business growth through employee engagement. To find out more about the link between pay, pensions and employee benefits chat to us or book a demo with one of our experts.

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  • Amrik Birdi
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Autumn Budget 2023: A round-up of pay and pension changes

Autumn Budget 2023: A round-up of pay and pension changes 1920 1413 Amrik Birdi

Following the Chancellor’s Autumn Budget Statement 2023, here is a summary of the key measures and announcements affecting payroll and pension for businesses to navigate.

What to change on your payroll system

Class 1 Employee National Insurance Contributions
The main rate for Class 1 Employee National Insurance Contributions (NICs) will be reduced by two percentage points to 10% from 6 January 2024 for earnings between the primary threshold and the upper earning limit, giving employees a small boost to their take-home pay.

  • Employee Class 1 NIC – 10% (6 January 2024)
  • Primary threshold – £12,571
  • Upper earning limit – £50,270

The National Living Wage
From 1 April 2024, the National Living Wage (lowest wage legally payable to workers) will:

  • apply to all employees aged 21 and over (currently 23 and over), and
  • increase from £10.42 to £11.44/hour, or a 9.8% rise.

To remain compliant with new changes to the National Living wage, businesses must ensure employees aged 21 and over receive the minimum pay per hour they are entitled to.

National Minimum Wage
It’s important to note, the National Living Wage and the National Minimum Wage, while often confused, are distinct. The National Minimum Wage is the minimum legal wage for younger workers and apprentices. The National Minimum Wage also been updated:

  • Employees aged 18-20, from £7.49 to £8.60.
  • Employees aged under 18, from £5.28 to £6.40.
  • Apprentices under 19, or over 19, but in their first year, also from £5.28 to £6.40.

These changes will also take affect from 1 April 2024.

What will remain the same on your payroll system?

The Chancellor announced to keep the certain rates and thresholds the same for the 2024-2025 tax year, including:

  • Employer’s Class 1 National Insurance rate.
  • Employer’s Class 1A National Insurance rate (on benefits and termination payments over £30k).
  • Employer’s Class 1B National Insurance rate (on benefits reported via a PAYE Settlement Agreement (PSA)).
  • National Insurance thresholds, including the Lower Earnings Limit (the point at which an employee becomes eligible for statutory payments and is used for state pension eligibility).
  • Personal tax allowance.
  • Rates of income tax within the rest of the UK.
  • Employment allowance.
  • Company car benefit rates.

What to watch out for

Auto-enrolment pensions
Under the current automatic enrolment system, employers are required to offer all ‘eligible’ staff a pension plan and enrol them into it – but it’s the employers that choose the pension scheme.

That could potentially change – the Chancellor announced to launch a consultation on the concept of a ‘pension pot for life’ which will aim to gather industry thoughts/comments on whether it makes sense to introduce new rules making it the employee’s decision where their workplace pension savings go. This would let the employee pick one pension and keep it from job to job over their whole career while still benefiting from employer contributions.

While the concept will benefit employees in some respects, it would be very complicated for businesses. Instead of only needing to keep track of one pension scheme, employers would be faced with managing a different scheme per employee.

Encouraging more people back into work
The Chancellor confirmed plans to phase out certain benefits and step-up efforts to monitor those receiving welfare. This is all part of the ‘Back to Work’ plan, which aims to encourage 1.1 million people back into work.

The Chancellor also confirmed measures to allow working parents to claim free childcare will go ahead. This will apply to children aged 1-2 years old, and parents will be able to claim up to 30 hours a week. For more information see Budget 2023: Everything you need to know about childcare support – The Education Hub 

Our thoughts on the Autumn Budget

The announcement to lower employee NICs, increase national living and minimum wage, changes to the childcare support and the proposed concept of ‘pension pot for life’ provides some good news for employees, especially for those on low incomes.

On the other hand, with no changes announced to the employer NICs, and higher national minimum and living wage there will be continued added pressure on businesses to meet the new basic pay in the current economic and business climate. The proposed changes to pensions will only add to those costs and add more pressure in the future.

How we can help

We’re passionate about helping businesses continue to look out for their employees while keeping costs down. If you and your business find some of the changes announced in the Budget Statement challenging, be it the added financial strain to your business or the practical implementation of the proposed changes, speak to us for an informal chat.

For more information about unburdening your business from payroll and pension compliance visit our SMART Employment page and read more about supporting your employees’ financial wellbeing, emotional wellbeing and physical wellbeing.

Amrik Birdi, Head of Operations at Growth Partners

blankAmrik has a wealth of knowledge in pensions having joined Growth Partners from KPMG where he was responsible for advising companies and trustees on independent DC provider procurement exercises, DC investment strategy review, DC pensions strategy review, automatic enrolment compliance, and meeting ongoing governance requirements. Amrik spent three years before this as a Pensions Guidance Specialist at Pensions Wise helping members understand their pension and retirement options, empowering them to take control of their retirement journey. With a Diploma in Regulated Financial Planning and Certificate in DC Governance, combined with a Degree in Economics, Amrik is a fully qualified pensions consultant and able to offer strategic support to our clients on their options for workplace pension schemes and auto-enrolment.

Menopause webinar
  • Growth Partners
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Free menopause webinar: Let’s Talk Menopause, it affects us all

Free menopause webinar: Let’s Talk Menopause, it affects us all 1920 1080 Growth Partners

October is Menopause Awareness month and 18th October marks World Menopause Day. Menopausal women are the fastest growing demographic in the workplace, and are at significantly higher risk of leaving their job due to the impact symptoms may have on their work.

This is why it’s essential for employers to ensure they have the right services in place to support employees who may experience symptoms of the menopause or who may work or manage someone who does

17 October: Menopause webinar to support menopause in the workplace

To raise awareness of the impact of menopause, we’ve teamed up with menopause specialist Dr Rebecca Lewis MBBS Clinical Director of Newson Health Menopause and Wellbeing Centre and Director of balance app. Rebecca will host the menopause webinar, discussing menopause symptoms, common myths and how to approach menopause in the workplace.

Free menopause webinar

Register for your free place here. Can’t make the date or time? Register, and you’ll be sent the recording by email.

Register for Let's Talk Menopause webinar

Survey results from a study by the Chartered Institute of Personnel and Development show 45% of women over the age of 45 feel menopausal symptoms have a negative impact on their work and 47% of women who need to take a day off work due to menopause symptoms don’t tell their employer the real reason for their absence.

Interested in benefiting from menopause support services?

Menopause support services

All our clients benefit from:

  • Information and advice for those who are directly impacted by menopause including confidential 24/7 access to counselling and GP services.
  • Advice for managers to help create a supportive, flexible, and comfortable work environment including webinars and a free accredited training course.
  • Support for family, friends, and co-workers with signposting to recommended local and national services and support groups.

If you are a current Growth Partners client, your employees can access menopause support services on their My SMART-e app. If you have any questions regarding the service, please contact your engagement manager. You can email Daniel.duggan@growthpartnersplc.co.uk or call 0116 340 3116

If you are not a current client, arrange a demo of the My SMART-e app and the new services, here or contact our growth experts for a chat.

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  • Growth Partners
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7 Stand-Out Stats: employee engagement in hospitality

7 Stand-Out Stats: employee engagement in hospitality 560 420 Growth Partners

We partnered with research and insights experts KAM Media to understand the use and awareness of employee engagement services within the hospitality sector.  The research also revealed to what extent employees are more likely to remain in a role because of them.

Over the past few years, we’ve seen a lot of employees leaving the hospitality sector for other industries, such as warehouses, delivery, and supermarkets. The numbers don’t lie – by the end of 2022, there were 149,000 job vacancies in the accommodation and food service sector (ONS). These numbers reemphasise why employers in the sector need to consider how attractive they are to help retain employees.

We’ve rounded up seven eye-opening stats from our research to shed light on employee perceptions and preferences when it comes to employee engagement and employee benefits as well as the impact on retention and satisfaction.

Employee Engagement in Hospitality Infographic

The Power of Employee Benefits
3 out of 4 employees agree that employee benefits have the power to make them happier at work. This is a significant finding, as happier employees lead to improved service, customer satisfaction, and increased spending.

Given the impact that employee benefits have on overall workplace happiness, hospitality businesses should consider these offerings and the impact on their bottom line.

Employee Benefits and Retention
An impressive 79% of employees have chosen to stay in their hospitality roles for a longer duration due to the presence of employee benefits. This statistic emphasises the importance of offering attractive and valuable benefits to foster loyalty and reduce turnover within the sector. By investing in employee benefits, businesses can create a positive work environment that encourages long-term commitment. This in turn reduces recruitment and training costs.

Face-to-Face Training
Almost half (48%) of employees surveyed expressed a desire for face-to-face training opportunities. This indicates that traditional, hands-on training methods are still valued by hospitality employees. Organisations should consider providing regular in-person training sessions to empower employees, enhance their skills, and promote their professional growth.

Online Access to Pay Documents
45% of employees said they would like online access to their pay documents. In the digital age, it is essential to offer convenient and secure platforms for employees to access their financial information wherever and whenever they are.

Gym Discounts
40% of employees expressed a desire for gym discounts. Promoting employee wellbeing through fitness initiatives can positively impact overall job satisfaction which in turn helps reduce churn rate and absences. Collaborating with gyms to offer discounted memberships or wellness programs can incentivise employees to prioritise their health and create a healthier, more engaged workforce.

Employee Benefits all-in-one place
A staggering 77% of employees mentioned they would use employee benefits more frequently if they were all consolidated in one place. Making employee benefits easily accessible and user-friendly is crucial to their effective implementation. Employers should aim to streamline the process by providing a single platform, such as an app or portal, where employees can access and navigate various benefits seamlessly.

Health Benefits as Job Switching Incentives
An overwhelming 83% of respondents admitted that offering a specific health benefit influenced their decision to switch jobs. Health and wellbeing benefits have a significant influence over employees’ job choices. Hospitality businesses should prioritise relevant health benefits to attract and retain top talent, demonstrating a commitment to employee wellness.

 

Offering attractive benefits, all-in-one place not only creates a positive work environment that fosters employee loyalty and satisfaction, but also contributes to the overall success and profitability of the organisation. A motivated and engaged workforce will ultimately deliver exceptional service, create happy customers, and establish the hospitality sector as an attractive and competitive industry for both current and prospective employees.

Download your copy of the research

From the impact of employee benefits on overall workplace happiness to the influence of specific health benefits on employees switching jobs, our findings offer actionable insights for organisations looking to boost employee engagement. You can download the full research here.

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