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Real-time paydays

The world of work is changing

The days of a ‘job for life’ have more or less gone. For some this is good news, for others, it’s not so good. That said, the people who have interesting and successful portfolio careers will tell you we should celebrate the freedom that today’s job market gives employees, and the choice it gives employers.

If you’re a small or medium sized business owner and you have a job that needs doing, you have the choice between employing someone on a long term contract, employing them on a short term contract or outsourcing the work. Both short term contracts and outsourcing have seen a real rise in popularity in recent years – with businesses big and small. They both enable you to bring the required skills into the workplace without placing a long term financial burden on your business.

Whether or not these ways of working are the right or best solutions from the employee’s point of view, opinions differ, but there is a growing number of people who embrace and enjoy this way of working.

What this means for your payroll

Working with employees on short or very short term assignments can make great business sense, and can be the perfect way to get jobs done. But it can wreak havoc with your payroll.

Let’s imagine a situation where you have employed someone on a 1-week assignment. It is highly unlikely in this day and age that they will be prepared to wait for anything up to 7 weeks to get paid for their efforts. While payday advances have been commonplace for a long, long time, this new way of working is potentially ringing the death knell for traditional paydays. As more and more short term contracts appear in the workplace, more and more employers are having to facilitate payments that don’t fit the traditional payroll structure.

As this type of economy grows, the likelihood of pay-on-demand becoming commonplace grows. Pay-on-demand is where the employee determines when they get paid. For some, it makes the best sense to be paid weekly, for others fortnightly, but there are also those people who need money on a more ad hoc basis. It goes without saying that this type of situation could have horrendous implications for the people administering your payroll.

Payday advances

Many employers have arrangements with third parties to help avoid this complex payroll situation from arising. They put procedures in place that allow employees to easily and swiftly obtain payday advances without involving the payroll team within the company too much.

The way these arrangements work is that a third party advances the funds that the employee needs, and then the employer withholds the amount to be repaid from their wages when payday comes along. The employer then pays the third party what they’re due.

This type of solution means that employees aren’t faced with expensive payday loans and can get access to funds when they need them. However, it is not an ideal long term solution for many of the short term arrangements we’re seeing in the workplace today.

Is it time to look at payroll differently?

Put bluntly, if more and more employers are going to be working with employees on a short or very short term basis, the payroll system we operate today simply doesn’t accommodate the challenges. While some payroll systems are already allowing for payments outside of the normal cycle and banking in the UK makes speedy payments simple, there is still a way to go for this situation to be hassle-free for employers.

At Payplus we’re seeing more and more of these situations and are able to manage them for our clients in a way that they typically can’t achieve in house.

The truth is that technology and legislation are a long way from making these situations easy. In the first instance, the legislation does not allow for this level of flexibility when it comes to submitting information and documentation. And secondly, while technology can be adapted quickly, it can only follow what the likes of HMRC allow.

Outsourcing payroll as a way of relieving the headache

If you run a business where your staffing model calls for the use of short or very short contracts or you’re facing situations where pay-on-demand is the best solution, payroll can be or can become a real headache for you. If your payroll team is in control of your standard payroll but you need someone to take on the more complex parts, then outsourcing is normally the best answer. Alternatively, if you’re in a situation where your payroll systems are still somewhat haphazard and you need a solution – fast – once again, outsourcing is worthy of a place on your list of possible solutions.

When you outsource your payroll to an expert, you should look for guarantees of accuracy and timeliness as well as an attractive price. You should also look for an accessible team that speaks your language and is genuinely interested in your business. At Payplus, we’re all these things and a whole lot more. In fact, our headline message is this – Your Staff Paid Accurately and On Time or You Don’t Pay a Thing – which basically sums up everything that we’re about.

What to do if you’re facing a complex payroll situation

If your payroll is becoming complex or overly time consuming, don’t sit and wait for a solution – take the bull by the horns and put a solution in place fast. Why? Because if you don’t, you could face penalties as well as frustration and stress.
And, at the end of the day, you went into business, not to become a payroll expert, but to do what you do best. So, it makes complete sense to get the experts on board, so you can free your time to do what you do best – run your business.

If you’d like to find out more about outsourcing your payroll to a company you can trust, get in touch today. We’re here and ready to help you find the best payroll solution for you.

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