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Payroll World Blog

Payroll tenders are dead? Long live payroll tenders

By Gary Webb, marketing manager, Bond Payroll Services

When you last tendered for your payroll service did it meet your needs, or was it a fraught process that rather ran out of time and ended up as a compromise?

I recently met up with a great payroller in London who simply didn’t have the time to put together a request for proposal (RFP) or invitation to tender (ITT) but was targeted to achieve a change by her board, and in a timescale that was demanding to say the least. Worse still, she thought that the whole process would be a waste of time, as one of the directors had a clear view of who he wanted to use, and held the deciding vote. Sound familiar?

It’s a difficult choice for payroll managers. You want to be clear and transparent from an audit viewpoint internally, and indeed you may be subject to Official Journal of the European Union (OJEU) regulations anyway. But for the most part payrollers are missing a trick by going down the tender route with a long list of things they think they need, when actually a collaborative approach, with the supplier offering real input, would be the way forward.

Don’t get me wrong – tenders can be really useful, but sometimes you end up just getting what you wanted, and not actually what you need.

If you do have to tender, how can you make sure that you’ve got a useful document? Coming from outside the payroll industry, I’ve been involved with and seen some great tenders and I believe that the Chartered Institute of Payroll Professionals (CIPP) should be taking the lead in this.

One of my abiding memories of good tender support was the introduction by the British Parking Association, the parking industry’s professional association, of the model contract and tender, designed to give help, advice and a framework for anyone seeking to outsource their service. Should the CIPP be looking at this? Absolutely.

Bond Payroll Services has been a long-time advocate of transparency in the industry, so any support from the CIPP to support this initiative would be welcome. In the meantime, our advice would be, where possible, just shortlist two to three known suppliers from your professional experience and get them in, so that you can test this collaboration idea. Believe me, it will be worth it, with a better solution for your business with the right supplier.

Paul Rains, CIPP chair, comments:

“The CIPP welcomes the idea of a best-practice standard template which would benefit both businesses and the industry as a whole. I still believe there is a need to follow a methodical procurement process to justify any investment made and to ensure there is no bias when the selection is made. However, I agree that too often people focus on what they have and not what they need when looking for their next payroll service provider or payroll software - this is where perhaps the CIPP, working together with payroll service / software providers, could help payroll managers.

“But it’s important to note we will need to include carefully tailored questions to help create a robust template which can save businesses time and effort and at the same time be flexible enough to ensure it can cater for any unique requirements. In addition, we are open to dialogue and discussions with Bond and others in order to help create this service.”

Posted on 4th April 2016 by Jerome Smail • Read comments • Permalink


Updated National Minimum Wage guidance from April 2016

By Ian Holloway, head of legislation and compliance at Cintra HR & Payroll Services

I am all for good communication, education and guidance. It is essential that we are provided with the right information so we can perform our increasingly complex payroll functions. So, with great expectations, I opened the new April 2016 guidance from the Department for Business Innovation and Skills (BIS) entitled Calculating the National Minimum Wage.* I was disheartened immediately by the very first line:*

‘The National Living Wage applies to workers aged 25 and over from 1 April 2016’

No, no and thrice no! I have been saying this over and over again for months now:

• The regulations that give us the statutory National Living Wage are effective 1 April 2016 BUT…

• This does not mean that the statutory rate is effective 1 April 2016 or that people 25 and over will get it from this date. It all depends on the date that the pay reference period started and the age of a worker at the start of it.

Unfortunately, despite making many references to it, the guidance does not actually give an explanation of the fundamental concept of the pay reference period (PRP). I guess after the years that we have been doing NMW, BIS believe that we understand it. Just so that I can explain it, the definition of the PRP, according to the National Minimum Wage Regulations 2015, is the period of time for which someone is paid:

A “pay reference period” is a month, or in the case of a worker who is paid wages by reference to a period shorter than a month, that period.

So, for example, if a weekly-paid worker has a payday on Friday 8 April 2016, it is quite likely that they will be paid on this date for work done between Monday 28 March and Sunday 3 April. This is the period of time for which they are paid and, consequently, their PRP. See my post The National Living Wage – some misconceptions explained for an explanation of my comment above.

Moving onto the guidance content itself and ignoring the incorrect first line, this 56-page document is actually quite a good working interpretation of the National Minimum Wage regulations. I would recommend reading and saving this document for future reference, and I summarise the contents very briefly below:

• It is guidance that applies to the National Living Wage (NLW) and the National Minimum Wage (NMW). It is good to have the acknowledgement from BIS that, in fact, the NLW is just another rate of NMW.

• It covers eligibility to the NLW and NMW, remembering that it applies to certain workers and apprentices, who may or may not be employees under a contract of employment.

• It covers the pay that needs to be included when calculating whether a worker was paid at the NLW/NMW in the PRP. Importantly, it also covers the definition of working time.

• It also covers the enforcement regime that is in place where employers do not pay their eligible workers at the statutory rate for their working time in the PRP. In this regard, it is interesting to read the part about calculating NLW/NMW arrears calculations where the worker was not paid correctly (page 50).

Despite my criticism, this guidance is quite a good read. Just ignore the first line!

Posted on 1st April 2016 by Jerome Smail • Read comments • Permalink


SWOT you need

By Richard Ashley, Recruitment Sales Manager, Chase Moulande

SWOT analysis is typically used in a business context, but the principles can be applied to individuals, says our resident recruiter, Richard Ashley, as he considers self-examination for career enhancement

SWOT analysis is used to evaluate the strengths, weaknesses, opportunities and threats of a company or a project. It can identify competitive advantage and risk. So if it can be used successfully in the corporate environment, why not apply the technique to evaluate your own professional qualities? This will identify areas of underperformance and suggest action to manage and remove threats to your career.

Image boost

Self-analysis or examination can help you improve your image, boost your appeal to
clients and establish an advantage over your colleagues or rivals. If you want to be noticed, work on your positives and negatives, and ensure you manage your personal brand strategy – your branding should reflect your experience, skills, work ethic and character.

How will a SWOT analysis help?

A SWOT analysis will help you discover more about yourself. It is a simple but powerful tool guaranteed to uncover your constructive and damaging traits, so evaluate, set goals and create an action plan. Having a deep understanding of what your strengths, weaknesses, opportunities and threats are will put you in a great position to enhance your career. Pairing external threats with internal weaknesses can help highlight the most critical problems. For each element, create a list relating to your work environment.

Strengths

Your strengths might already be known to you. However, consider these in relation
to how others perceive you, including your manager and peers.

  • What is your unique selling point?
  • What do you do best or better than everyone else?
  • What have you achieved in your career and what helped you to accomplish it?
  • What skills or training do you have that others don’t?

Weakness

  • Identifying weakness is more important than knowing your strengths!
  • Are you held back through a lack of belief or confidence?
  • What do your manager and peers consider your weaknesses to be?
  • Is there anything you think is hindering your productivity? This could include your shortcomings or negative thoughts. Other areas might include not having the right training to excel, or confidence to nurture colleagues or take that next step into management.
  • It is crucial that you face your Achilles heel, recognise and manage weaknesses, and conquer any impediments.

Opportunities

Opportunities need to be put in the context of your job and responsibility. From a payroll perspective, consider developing your skills through training, or updating your knowledge through payroll conferences. Or there could be the opportunity to move into a project-focused role, such as process improvement or system implementation. Or maybe covering a colleague during maternity. Undoubtedly, your strengths will open up opportunities, but also consider the flipside – whether conquering a weakness will do likewise.

Threats

Threats can be defined simply as challenges or obstacles that you face daily. These could include a competitor that has expanded its position in the market, or indeed colleagues who are threatening your standing at work. Technology is a significant threat – inferior systems could slow efficiency. Revisit weaknesses to see if any of them lead to threats. Threats will also expose weaknesses, and sometimes there are factors that are both threats and opportunities. For example, redundancy could be a threat, or could be an opportunity in disguise!

Summary

Only by completing the exercise will you recognise your strengths and weaknesses and improve on both. While everyone has weak points, distinguishing the threats will lessen their impact. So seek to make a positive change and remember that not recognising or responding to weaknesses and threats will ultimately lead to failure.

Key points:

  • SWOT analysis can be used to evaluate your own personal strengths and weaknesses, as well as career opportunities and threats.
  • For each element, create a list relating to your work environment. Nobody is perfect, so ensure you answer honestly.
  • Seek to make positive change. Remember that neglecting to recognise weaknesses and threats could lead to failure.

Richard Ashley, recruitment sales manager, Chase Moulande, richardashley@chasemoulande.com

Posted on 1st April 2016 by Richard Ashley • Read comments • Permalink


Interview like a pro

By Richard Ashley, Recruitment Sales Manager, Chase Moulande

Job interviews seldom go without a hitch, yet preparation will minimise careless mistakes. Richard Ashley, our resident recruitment expert, provides advice on improving your appeal to employers.

How often have you thought “I could have answered that better?” Nobody enjoys interviews and they rarely go perfectly. However, there are certain mistakes you can make that will seriously hinder your chances of getting the job.

Prior to the interview

Find out as much information as you can beforehand. Have a great understanding of what the company does and who its main competitors are. Understand the culture. Find out about the structure of the payroll function – where does the vacancy sit within the department? This will give you a greater appreciation of the size and complexity of the payroll. Search the web and speak to your recruitment consultant to build up your arsenal of knowledge. The more preparation you do, the more confident you will feel!

Have a great understanding of what the company does and who its main competitors are.

Make a great first impression

First and foremost, be positive! A job interview isn’t necessarily a hurdle, so you should approach it in a confident and positive frame of mind. From your CV, the interviewer believes you are a good match, so see the interview as a mutual exchange of ideas or a two-way conversation – importantly, relax!

Whenever you get called to an interview, irrespective of the company culture, it’s important that you are smartly dressed. Whether it’s face-to-face, on Skype or even over the phone, business dress will help you maintain a professional demeanour and mindset. Arrive at the interview venue ten minutes early. Any earlier will probably do more harm than good and put pressure on the interviewer. Once there, make some unspoken first impressions, such as giving a firm handshake, maintaining eye contact, ensuring you sit up straight and not fiddling with your pen!

Likely questions

Interviewers are seldom qualified in the art of interviewing, but the onus is on you to
make a great impression.

The interview process is essentially going through your CV and matching it to the role and requirements. So have a copy of your CV to hand.

Also, before the interview, go through the job spec and think about likely questions and relevant examples of your experience. Avoid Yes and No answers. In addition to testing your technical knowledge, the interviewer is likely to ask why you want the job and how you can add value to their business. The key is to give concise answers with good examples, and not dragging the answer out longer than it needs to be – candidates often waffle when nervous.

Questions to ask?

If you don’t know the reason for the vacancy, then ask. Enquire about career progression and the opportunity for study support within the role. This shows you are career-minded. Ask about the payroll system and what the future plans for the department are.

Mistakes to avoid

In summary, the deadly sins are:

  • Being unprepared – research the company, read the job specification thoroughly, think of likely questions and plan your answers accordingly.
  • Not ensuring your CV is factual and correct – don’t be creative, as you will be found out.
  • Not providing examples – demonstrate previous experience by including examples in your answers.
  • Not paying attention or listening – this will give the interviewer irreversible doubt about your suitability.
  • Using buzzwords – clichés frequently used in CVs should definitely not be brought to the table at interviews. Examples include ‘highly motivated’, ‘team player’ or ‘people person’.
  • Being too confident – find the right balance with confidence, as being too self-assured can be interpreted as cocky.
  • Not asking questions – even if all your questions have been answered, think of others. This is your chance to demonstrate your interest through questioning the interviewer.
  • Not closing – In a nutshell, this means getting confirmation that you have answered the interviewer’s questions and concerns. Also try to find out where you stand and get commitment for the next stage of the process.

Key points:

  • Research the business, study the job and candidate specifications, and find out about the competitors in the market.
  • First impressions count – so arrive early (but no more than ten minutes), dress smartly and maintain eye contact.
  • Think about questions you’re likely to be asked, and be concise but not abrupt when answering the interviewer.

Richard Ashley, recruitment sales manager, Chase Moulande, richardashley@chasemoulande.com

Posted on 31st March 2016 by Richard Ashley • Read comments • Permalink


The National Living Wage – some misconceptions explained

By Ian Holloway, head of legislation and compliance at Cintra HR & Payroll Services

There seems to be a lot of confusion and misinterpretation regarding the National Minimum Wage (Amendment) Regulations 2016. These come into force on 1 April 2016 to usher in the National Living Wage (NLW) for eligible workers aged 25 and above. To my mind, there are three key questions surrounding the NLW:

1. Is it a rate or a premium?
2. Is it effective 1 April 2016?
3. Is it payable from the date that someone turns 25?

Rate or premium?

The 2016 regulations make it quite clear that the NLW is a “single hourly rate”. It is not a premium or an enhancement to the National Minimum Wage (NMW). Simply, it is another rate in the NMW table and if we think of it like this, the following statutory rates apply:

• £7.20 (25 and over, aka the National Living Wage)
• £6.70 (21 to 24, the adult rate)
• £5.30 (18 to 20, the youth development rate)
• £3.87 (under 18 but over school leaving age, the 16- to 17-year-old rate)
• £3.30 (the apprentice rate)

I can understand how the confusion arose, as this is the way that it was announced at Summer Budget 2015. However, it is not a 50p premium or enhancement to the above NMW rates and there is no requirement for that 50p differential when the NMW rates increase in October 2016.

The ACAS website National Minimum Wage and National Living Wage contains quite a good YouTube video presentation (though it does give the impression that it is actually effective 1 April 2016, which is not quite correct – see below).

Effective date

Is it effective 1 April 2016? No – this is when the regulations are effective. The effective date all depends on the pay reference period (PRP). The PRP is the period of time for which a worker is paid. If they are paid weekly, they will have a PRP of a week, if they are paid fortnightly, they will have a PRP of two weeks, and so on.

The rate at which a worker is legally obliged to be paid is the statutory rate that was in place on the first day of the PRP. So, for example, a worker’s first payday in April 2016 is the 7th and on this date he will be paid for work done between 28 March and 3 April. The first day in this PRP is 28 March so the employer is only legally obliged to pay them at least the value of the NMW (the 2016 regulations are not even effective until 1 April anyway).

Effective date for the new 25-year-old

Is it effective from the date that someone turns 25? If I have a worker who turns 25 midway through the PRP, do I have to do a pro-rata calculation? No – Regulation 3 of the National Minimum Wage (Amendment) Regulations 2016 is quite clear that the statutory rate:

“at which the worker is entitled to be remunerated as respects work in the pay reference period is the rate that applies to the worker on the first day of that period”.

If the PRP is one month from 1 to 31 May and the worker turns 25 on the 15th, the first day in the PRP is 1 May and the only legal obligation is to make sure that the employee is paid at least the value of the NMW.

Of course:

• There is nothing to stop an employer paying it as a 50p premium on top of the NMW if they want to. Just remember that from October 2016 when the NMW rates change, the 50p premium will have to be reduced (or you will be paying them more than the statutory obligation that is a single hourly rate of £7.20).
• There is nothing to stop an employer paying it for every hour worked on or after 1 April 20016 if they want to.
• There is nothing to stop an employer paying it from the date that a worker turns 25 if they want to.

All I am saying is that there is no statutory obligation to do so. The only statutory obligation can be summarised as ensuring that you pay all eligible workers at the NLW rate for the first pay reference period starting on or after 1 April 2016.

Posted on 30th March 2016 by Jerome Smail • Read comments • Permalink


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