Adjusting your organisation’s pay cycle can improve cash flow, boost team satisfaction and put you in a better position to handle any unexpected staff changes. However, it can also draw the ire of one of your most important stakeholders, your employees, if they feel the changes do not take their needs or wants into consideration.
ADP’s report, People at Work: A Global Workforce View 2021, found that in India, one in three working individuals say they struggle to manage cash flow because their pay schedule does not align with when bills are due. Also, 84 per cent of workers say they have been paid late.
Industries subject to awards, enterprise agreements or registered agreements have clear, legislated outlines to how often an employee must be paid.
But across all other industries, employers have a little more flexibility. According to The Payment of Wages Act of 1936 in India, the responsibility for payment of wages, fixation of wage period, time and mode of payment of wages, permissible deduction with approval of the Government regulation lies with the employee and employer.
At the heart of a successful pay frequency is agility. Imagine if your payroll had the agility to truly meet the modern day needs of employees? Yet, it’s not a simple feat to achieve.
In this context, agility equals integration. Payroll cannot exist in silo if it is to deliver a quality experience for employees and business gains for employers. Businesses need to have a payroll system that’s integrated with other HR and business software. It should be usable in real-time, with transparent reporting on employee data so the business can identify trends, make improvements or adapt to changing employee information in an instant.
And as digital finance management increasingly becomes the norm, payslips that are easily and digitally accessible to employees have become a necessity rather than a nice-to-have.
Communicating pay frequency changes can be complicated. Money is, justifiably, a sensitive topic.
Payday is a day that everyone looks forward to.
So if you’re making any change to your organisation’s pay frequency, here are our top three tips to ensure it’s a smooth and successful transition for employers and employees alike.
1. Communicate the what, why, how and when effectively
Employees have enough on their minds during these turbulent times without having to deal with ambiguity surrounding wages and remuneration. As with any fundamental change to business practice, the best way to communicate pay frequency changes to staff is to develop messaging that’s clear, consistent and easy to understand.
This messaging should answer every question and counter any objection an employee might have. The goal is to ensure the decision to change pay frequency at your organisation makes as much sense for an entry-level employee as it does for your Head of Finance.
Here are some key questions your messaging may have to address:
- What’s changing? What is the reason behind the reason?
- As an employee, do I need to do anything?
- What’s the timeframe? When do these changes come into effect?
- What tools is the organisation using to support employees?
- How can employees make their concerns heard?
The best messages are ones that can be presented in a variety of different formats, from emails to printed handouts to messages in social collaboration channels. It’s also best practice to use as little jargon as possible in these messages, as complicated terminology that doesn’t resonate quickly can potentially confuse audiences. When it comes to pay, people want clarity.
2. Consider key stakeholders, potential advocates and barriers
Being the one that breaks the news gives you the best chance to control the message. Take steps to avoid information leaks that might cause further confusion.
Planning gives you a chance to identify the different groups of stakeholders in your organisation and determine when they should be informed. This shouldn’t be viewed as restricting the flow of information, but rather equipping each level with the tools they need to provide support and answer questions when the change becomes public knowledge.
Consider every employee in your organisation from the top down, and the kinds of questions they may have of their top line manager. At this stage, you might also consider identifying a team of change champions within your organisation. These are people who can help communicate the message and better prepare to support your staff through the changes.
3. Provide tools and resources to support the rollout
A pay frequency change is sensitive and has many far-reaching consequences. A simple BCC email to all staff won’t do the trick.
If you’re trying to get your employees to buy-in and adjust, you need to leverage the communications channels at your disposal. Utilise resources like checklists, automated reminders, calendars and if necessary, employee assistance programs.
Remember, even though you’re technically not changing the amount that you pay your employees, a change in pay frequency can have a big impact on their lives. They may have to consider new saving and money management strategies, and the timing of payments like rent, mortgages, car payments, insurance, child support, tuition and utilities can bring new stresses into their lives that they didn’t have before. Empathy and understanding will go a very long way.
Views expressed above are the author’s own.
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