If you’re the kind of person who pores over your payslip and understands it down to the last penny, it might surprise you to know that not everyone is the same. In fact, many people don’t understand much about their payslips at all, except the bottom line. And that’s assuming they check them in the first place. Lots of people don’t check their payslip and wouldn’t know if they’d been under- or overpaid unless they suddenly discovered they didn’t have enough money to pay their bills.
We tend to fall into one of three groups – those who check their payslip and understand most or all of it; those who check but don’t always understand it; and those who don’t check it very often or at all - perhaps because they find it completely confusing.
Even if people understand what the numbers mean they don’t always understand the calculations used to reach to those numbers. It all feels too complicated, especially where tax is concerned.
If you’re an employer, this has ramifications for you. When people don’t pay attention to what they get paid because they don’t understand it or it all feels too difficult, it can have a negative impact on their financial wellness. When they don’t know how much income is going into their bank account, how can they budget and live within their means or save and plan for the future? This can be the first step onto the slippery slope of debt.
And when people don’t understand something about their pay or payslip, they tend to reach out to their payroll department to answer their query. It’s only natural. And while of course these queries need to be answered, it’s time-consuming for payroll departments, and creates an administrative burden on payroll that is costly – employers are paying staff to answer the queries, who are in turn distracted from activities that drive real company value.
And when payroll departments are spending time answering questions that could be answered in a different way, it brings these associated costs into sharp focus.
What if something else could be put in place to deal with the most commonly asked queries and to educate employees at the same time. What if payslips could be interactive?
This is not as futuristic as it sounds, but it is innovative and a great option for employers who want to help their employees be more financially switched on. Making payslips clearer and easier to understand means that employees are more likely to engage with them and have a better handle on their income. And once they’ve got that part of the equation working properly, they’re much more likely to start paying attention to their outgoings.
So how does it work? Well, an interactive payslip does exactly what it says on the tin. Employees interact with their payslip through a conversation with a chat bot, programmed to answer all the most frequently asked questions. The bot is fast and effective and seamlessly transfers employees to a human if needed. Payslip information is provided in simple graphical formats and the bot can converse in multiple languages - ideal for a diverse workforce. In short, it breaks down the barriers for many employees in understanding how and what they’re paid.
If your employees could literally question their payslip, they’d be able to understand what the different numbers mean. So for example, they can work out if they are on the wrong tax code, have been paid incorrectly or how payments have been calculated. Questions raised with payroll are minimised and where they are, they’re raised by employees with a much better understanding of their pay and so can speak from a more informed perspective.
The benefits for employees are clear. Employers also benefit through reduced costs: fewer staff needed to answer questions, more focus on strategic, value-driven activities, no more printing and distribution of hard copy payslips. Staff turnover could also decrease, because employers are signalling an investment in their staff through financial education and empowerment which in turn promotes higher levels of financial wellbeing and employee engagement.