UK organisations are struggling to meet the challenges of paying gig economy workers, according to new research out today from ROC Consulting, the global consultancy dedicated to digital Human Capital Management (HCM). Just over half (56 per cent) of UK private sector decision makers and little more than a third (39 per cent) of their public-sector equivalents believe their payroll can meet the challenges, despite 74 per cent agreeing that changing staffing models require new ways of paying workers.
With the ONS revealing that self-employment rose 22% from 2008 to 2015, and currently accounts for 15% of the UK workforce, the results suggest that traditional payroll systems are not being used effectively to help secure the best short-term talent.
Commenting on the findings, Sunny Patel, Cloud Practice Head at ROC said, “Contractors and freelancers and millennials who are all forcing new working practices allow organisations to access rapid, short term expertise and support, but it’s only one way the world of work is changing. What’s clear is that traditional IT approaches lack the speed, flexibility and intelligence to support these new approaches – if they don’t change employers will find themselves missing out on top talent.”
Fifty six per cent of IT and Finance decision makers agree they need to find better ways to pay quickly, but cut offs and systems mean that 59 per cent are unable to pay a new starter until a new payroll cycle has started. When the majority (78 per cent) still pay monthly, and 60 per cent would not consider paying daily, new workers could wait for up to six weeks before receiving payment.
Issues of having to increase resource, lack of faith in current technology and systems not coping were some of the barriers holding businesses back from making the changes they needed to, such as paying more frequently or faster, while at the same time almost 75 per cent said they wanted to reduce the cost of running payroll or make it more efficient. Cloud could be the answer – 61 per cent of respondent choose flexibility as the number one reason for switching to the cloud, while 41 per cent believe cloud could help reduce payroll reconciliation cycles, a key factor in delaying payments, and accuracy of payment through enhanced analytics.
Jerry Chilvers, CEO at ROC, a Zalaris company, said “In order to thrive, organisations are becoming more digital, across the length and breadth of their operations. Payroll is no different, and it needs to evolve to support new working styles and practices, whether that’s paying new starters faster or adapting to increasing numbers of contractors and freelancers in the business. It needs to be flexible, fast and cost-effective, and in finding the right platform for it, businesses can overcome the barriers of rigid systems and unlock the strategic contribution adaptable payroll cut-off dates can provide.
Removing barriers was another appeal of cloud computing – 64 per cent of respondents thought that moving payroll to the cloud would reduce resource requirements, overcoming a significant hurdle, with 25 per cent believing those reductions could total up to a quarter.
“Cloud computing is a proven technology that’s no longer a mystical IT term – business leaders understand the potential it offers them as a platform from which to secure greater value from mission critical applications like payroll. The technology, the services and the consultancy available to support its deployment is more mature,” continued Patel. “With forty-two per cent of decision makers expecting to move their payroll system to the cloud in the near future, organisations are going to be in a position to be more flexible to different payroll cycles and models.”
Moving payroll to the cloud has started for many, according to respondents – just under half (48 per cent) had already migrated payroll to a cloud environment. However, Hans-Petter Mellerud of Zalaris questioned whether these environments were truly cloud. “We see a number of organisations that believe they have cloud-based applications, when actually it’s hosted by a service provider offsite. While this removes some of the demands on the in-house team, businesses are less likely to receive the flexibility and speed they need than if they had moved to a true cloud environment, whether onsite or managed.”
London-based businesses felt they were better prepared for the gig economy (65 per cent) versus the UK as a whole (50 per cent), and more likely to pay daily (64 per cent against 39 per cent).
On September 25 2017, ROC was acquired by Zalaris ASA (OSE: ZAL). The deal unites two complementary SAP Human Capital Management (HCM) and SuccessFactors partners to meet the fast-growing demand for HCM advisory, payroll and cloud-based services across the Nordics, Baltics, Poland, UK, Germany, Austria, Switzerland, Spain and India.