The dangers for payroll and HR professionals during the cost-of-living crisis
Is pay on demand all that it seems?
Pay on demand is becoming increasingly popular, but is it the right decision to give employees access to pay outside of their regular payday?
In the recently published Future of Payroll report, Damon Anderson from Experian flagged that many survey respondents were concerned about the danger of this ‘quick fix’ becoming heavily relied upon each month and becoming unsustainable in the long term.
Anderson went on to stress that we must remember that earned wage access can only plug a short-term gap in an employee’s finances. Indeed, some survey respondents felt pay on demand could lead to financial difficulties for employees who already struggle with budgeting.
As payroll professionals and employers, it's vitally important to understand the devastating impact payroll errors can have on employees.
It may seem obvious, but in this current climate it’s absolutely crucial employees are paid accurately and on time. It was recently reported that Asda employees were having to skip household bill payments, take out loans, and even use food banks to make it through the month due to payroll errors meaning some employees were underpaid by £500 or more.
Gethin Nadin, Chief Innovation Officer at our sister company Benefex, explained that “even during better times, most of [the people living in] this country had circa £500 or less in savings. This doesn’t give a buffer for people when it comes to payroll mistakes”.
The reality is that “even a few days delay in pay can have a big impact: if there isn’t enough money for direct debits (usually set for payday) people end up in the red, get phone calls from creditors and end up stressed.”
Even during better times, most of this country had circa £500 or less in savings. This doesn’t give a buffer for people when it comes to payroll mistakes.
Employers are in a tricky situation: trying to help employees who are facing financial difficulties whilst also facing business price hikes themselves. However looking after your employees in times of stress and uncertainty will always pay off in the long-term.
By offering employee benefits that help incomes go further, sign-posting relevant financial advice and guidance, and creating a safe place to talk about money worries, employers can make a big difference to people’s lives.
Do you want to better support your employees with a wide range of benefits and discounts? Get in touch with us today to see how we can help!
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