Real time information: payroll compliance or a reward opportunity?

By Deborah Moon, HR Consultant

The beginning of April brought with it the implementation of a number of key Government policy changes, including those affecting the NHS, legal aid, taxation and welfare reform. Early April is also traditionally one of the main times of the year when changes to employment legislation take effect but this year was, perhaps, particularly notable in that it brought with it what has been described as “the biggest shake-up to PAYE in 70 years”, i.e. the introduction of real time information (RTI), replacing the end-of-year regime for the purposes of HMRC reporting.

But how have HR and Reward professionals, planned, prepared for and reacted to that change? Have they seen this as yet another additional regulatory burden, presenting a series of obstacles needing to be overcome? Is it regarded as yet one more transactional process, adding to the myriad of other operational challenges, designed to make busy working lives yet more difficult? Or has it been more thoughtfully considered and regarded, offering additional strategic opportunities and possibilities in the way that workforce information is utilised to support remuneration policy and practice?

A recent CIPD Reward Forum workshop brought together both experts and practitioners to consider and reflect upon both the operational and strategic issues and challenges faced by organisations in preparing for RTI, as well as considering the future for reward administration more broadly. A summary of that workshop and key lessons learned is set out in the event report Preparing for real-time information, a simple case of compliance or a shift to modern reward practice?

Clearly, in preparing for, implementing and managing RTI, there are a number of key operational considerations, including those relating to data quality and security, the role and relationship between HR and payroll (whether an internal or externally-managed function), the supporting systems and processes, arrangements for collecting and capturing the relevant information and communicating with both line managers and the wider workforce. But although the specific nature of the issues will vary, are these not all critical elements which underpin reward practices more broadly and which are of fundamental importance to their effective management?

Can the change to RTI, with the potential benefits arising from regularly updated reward information, be utilised to support and enhance other remuneration practices? Is the approach taken to managing reward data within an organisation, reflective of and aligned with its business needs and workforce requirements? With the growing diversity of and complexity in remuneration practices, is there a need for a more critical and strategic approach to the collection, storage and utilisation of pay and benefits information?

As organisations become familiar with and reflect on their experiences with RTI, does it also provide a learning opportunity for the management of other reward changes? Can we be confident that in planning and preparing for these we don’t just focus on the technical and administrative details, but approach these in a way which maximises their organisational value? Do we ensure they are clearly communicated and in a way which is most meaningful to those affected? As well as securing organisational compliance, delivering broader business benefits will make an important contribution to achieving a more tangible return for our time and resource investment.

P.S. Look out for details of the next Reward Forum on 13 June

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