Payroll outsourcing and other ways to boost your workforce flexibility

Aug21

Posted in News

The gig economy and disruptive market entrants are forcing established businesses to look at what the young challengers are doing and do likewise. And outsourcing payroll should be a central plank of your strategy.

Back in June 2015, as reported by UK agency Amaze in a recent whitepaper, the Global Centre for Digital Business Transformation published a report entitled “Digital Vortex: How Digital Disruption is Redefining Industries.” Its core finding was startling: digital disruption will displace four out of the top ten organisations across every industry, with “substantial disruption” occurring within just three years.

Given the 2 years that have already elapsed since that prediction, if that wasn’t enough to have you shuffling nervously in your seat, perhaps this will be. Of the executives surveyed in the study, 41% believed agile new entrants had increased the chance of their company being put out of business altogether.

Learning to be nimble

Naturally, every business that didn’t spring to life in the last couple of years is looking at new market entrants like Airbnb, Uber and Deliveroo and asking what it is they do that has enabled them to gain such a foothold on their respective markets so quickly.

One of the key elements is workforce flexibility. The gig economy – end especially zero hour contracts – may have become a pejorative term, but there’s no denying the value of having a nimble, agile workforce. But what if your workforce isn’t nimble and agile? What if decades of legacy arrangements have left your staffing at a distinct disadvantage compared to the new kids on the block? Here are some key elements in learning to be nimble:

Outsource the payroll

A key element of being disruptive is running lean. If the shift is towards making even operational teams more agile, then there’s really no argument for not doing likewise with the payroll.

Payroll outsourcing doesn’t only confer greater business flexibility – it typically results in lower payroll costs and greater accuracy too. It needn’t take forever to set up, and as payroll is traditionally a relatively self-contained element of a business, it can be a good place to begin business transformation.

Review your contracts

Switching to zero hour contracts in the current climate is unlikely to be welcomed by your staff, but you can create greater staff flexibility without adopting politically toxic practices. Consider introducing mobility clauses to make relocations easier or ‘reasonable alternative duties’ clauses so staff do not need to be forever tied to the same function. Taking such changes organisation-wide will require staff consultation and could be complex, but they are relatively simple steps on the road to greater workforce flexibility.

Annualise hours

As Management Today suggests, annualising hours could give you the flexibility you need at peak periods. By annualising hours, you switch to a yearly total of hours rather than a weekly or monthly one, with provision to use greater resource at peak times and offer time off in lieu in quieter periods. Your payroll section still pays a monthly salary, but you are able to maximise staffing efficiency and reduce overtime payments.

Such organisational changes can be challenging, but they may also be essential in a post-Brexit world where nimble workforce agility could be key to survival. If you are considering such changes, keep the lines of communication with staff open, seek to work collaboratively with staff or their representatives, seek legal advice, and start small.

If you’d like to explore making an outsourced payroll your first step to wider workforce flexibility, talk to us.