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How retailers can use technology to overcome payroll problems

by Jackson B
How retailers can use technology to overcome payroll problems

By Christian Berthelsen, CTO at Fourth

Retailers want to set and forget their payroll, and while flexibility is also key, many companies are navigating a complex situation during the pandemic. With zero-hour contracts, large numbers of staff on furlough, and workers regularly swapping or changing shifts, it can be a headache to ensure you are paying the right amount to the right people and at the right time. However, innovations in technology in recent years mean retailers now have the tools to stay on top of payroll.

The payroll nightmare

An error with salary can be extremely demotivating for employees. Being underpaid or waiting longer than usual for earned wages can lead to a host of negative repercussions in terms of employee engagement, customer service and staff retention, as well as the administrative burden in time and resource required to rectify such mistakes. The pandemic has exacerbated the damage any salary mistakes can cause; the FCA reported in February that the number of UK adults with low financial resilience has increased from 10.7 million to 14.2 million during the last year.

As well as this, there are further complications around salary at present, with employers needing to navigate the furlough scheme and keep track of those workers being paid a furloughed wage or returning from furlough. Data from Wagestream, a Fourth partner, shows furloughed workers in retail have been particularly hard hit, with 59% earning less, 54% concerned about paying for rent/the mortgage, and 47% worried about bills.

In an industry where there may be a combination of weekly and monthly pay runs, the additions of bonuses and commission, pensions, the minimum wage, National Insurance, and statutory payments are extra complications. Errors in tax codes or student loan notifications can lead to employees overpaying and lengthy admin processes to recover too.

To compound the complexity of payroll further, new requirements around safety in the workplace to minimise the risk of transmission of Covid-19 mean that staff may be required to self-isolate or change or swap shifts at short notice and may also cause many retailers to employ more temporary staff to fulfil changing demand.

Not only can inaccuracies around payroll affect workers, but employers getting it wrong also risk being named, shamed, and fined by official bodies such as HMRC or The Pensions Regulator. The risks of non-compliance with mandatory legislation around pay include a range of penalties, least of which includes a substantial fine.

Using technology to solve the problem

As workforces and companies reopen and grow, so too does the task of ensuring payroll information in different locations is up-to-date and correct. This is exacerbated by companies’ greater use of temporary workers and of course furloughed and semi-furloughed employees. Using technology that consolidates and integrates a company’s payroll, HR, time and attendance, rotas and finance systems can significantly help manage such tasks. For example, Fourth’s Payroll and Benefits Solution ensures the right data flows through the system so retailers can be sure they are paying their staff the right amount at the right time, since the tool integrates HR, scheduling and payroll into one simple solution. Users can also access a Payroll Bureau service, and Pension Auto Enrolment Managed Service, which means customers can pay their employees whilst fulfilling their obligations to HMRC and the Pension Regulator.

Retailers can also use such technology to empower employees to make changes to their own payroll information, view pay slips and access benefits as well as view and swap shifts. Other benefits include ensuring compliance with national minimum wage and working time directive automatically; tracking spend in real-time; comparing scheduled hours with hours worked; accruing holiday time automatically; and easily managing statutory payments and company policies. Fourth also has a tool that allows retailers to streamline expenses; users can log expenses as they happen, and its pensions solution also helps ensure pension compliance so that retailers can ensure pension payments are calculated correctly and take advantage of a complete auto-enrolment assessment cycle by linking the solution directly to payroll.

These technology systems help to standardise operating procedures and empower employees with mobile and off-network access to these systems, so they can be notified of changes in real-time and engaged to update details whenever they need to.

Alongside these benefits, using AI automation to replace repetitive payroll processes such as data processing errors and compliance issues can lead to significant time and cost savings for payroll. It is also helping companies review payroll information in real-time, looking for data that might reveal errors and underpayments for example.

Both Payroll and HR can use automation tools to improve efficiency and compliance through better, more accurate reporting. Such as, running automation on payroll data regularly to check it is compliant and automating the onboarding of employees. It traditionally takes several hours to onboard a new employee manually, but using AI technology this can be turned into seconds, with no errors.

Retailers should also consider financial wellbeing platforms that can empower workers with more real-time power over how they access their earned wages and is a powerful way to help improve employees’ financial wellbeing, especially as retailers look to recover from the impact of Covid-19.  Earned Wage Access, such as that offered through Fourth and Wagestream’s partnership, allows workers to access, track and save their earnings in real-time, thereby preventing people from having to rely on predatory forms of credit. This can all be managed through an app, making it simple and accessible for workers.

Managing payroll is complicated but need not be burdensome. Technology can be leveraged to ensure you can pay workers effectively and efficiently, without worrying about compliance, regulation, and law changes. Software solutions must be implemented to reduce administration and improve payroll accuracy and timeliness. Integrated payroll systems can ensure retailers are well-prepared and resilient on the road to recovery as we build back from the pandemic.



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