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Handholding SMBs on their Digital HR Journey: How Moorepay is Driving U.K. Payroll Growth

Organizations today are dealing with a myriad of inter-related market challenges:

  • Political (Brexit uncertainty, European elections 2017-18, etc.)
  • Economic (budget cut-backs, geographic/industry sector volatility, globalization, etc.)
  • Social (talent shortages, multi-generational/ageing workforce, etc.)
  • Technological (data/big data, analytics, “consumerization”, etc.),
  • Legal (compliance/risk mitigation), and
  • Environmental (ethical behaviour, paperless offices, etc.). 

Whereas many larger organizations have employees or teams of employees working strategically and operationally to address some of these challenges, it can be easy to forget that small to mid-size businesses (SMBs) do not have the resources in place to tackle even the most basic of challenges. 

NelsonHall recently attended NGA’s Analyst and Adviser Summit in London.  A key takeaway from the event was how NGA has turned around Moorepay (its unit offering payroll and HR solutions for U.K./Ireland businesses up to 500 employees) from being in decline in 2014 (losing one in three clients) to enjoying 7% growth. Moorepay has 10k U.K. clients, and delivers 500k payslips and over 12.5k HR service engagements each month.

There would appear to be potential for growth in the U.K. SMB segment, given there are ~1.2m SMBs with 1-500 employees; however, the majority (~1.0m) of these have fewer than 10 employees.  The Office for National Statistics (ONS) suggests that up to 45% of small organizations go out of business in their first five years.  These figures may increase given the uncertainties around Brexit which have led many organizations to be more cautious on budget spend/investment (and many of Moorepay’s clients to be in a period of shock).  Moorepay has typically seen 15% client churn each year, mostly due to clients going out of business, with some others being acquired and transition to the payroll system of the acquiring organization.  Against this background of churn, in H1 2016 it added 1,000 new clients and is on track for 2000 new clients by end of April 2017

Moorepay’s success comes down to hand-holding clients on their payroll/HR journey with a focus on simplicity, compliance and functionality that can scale as a business grows in HR maturity.  The journey starts by undertaking a digital HR maturity survey to establish where the client is along the dimensions of people strategy, data and technology along four levels:

  • Level 1 = no formal people strategy, manual systems and filing cabinets
  • Level 2 = ad hoc people strategy, partially automated systems for business
  • Level 3 = reactive people strategy, automated for management, self-service, but not integrated
  • Level 4 = comprehensive people strategy, automated, integrated platforms used across the business, manager and employee self-service collaboration.

Around 80% of its SMB clients sit at Levels 1-3, irrespective of their size (10 employees or 500 employees).  This is very different from larger, digitally savvy organizations, some of whom are looking at using AR in their training software. 

Moorepay initially deploys as core an employee database and a payroll and pensions platform. Extra modules can be added later if and when the client requires them: from on-boarding employees or managing them through an exit strategy through to more advanced functions such as performance and talent management or paperless expenses management. The solution also includes a HR Hub for centralized web storage of company policies, documentation and templates that can be securely accessed by employees, managers or administrators.

The next area to tackle is compliance.  Many of Moorepay’s clients do not fully understand their legal/tax compliance obligations, so it has developed a content library (linked to the employee database) which has legally compliant document templates built-in, providing clients to with ready-made documents to use. Additions in 2016 included Health and Safety forms created in response to the HSE trebling the number of prosecutions of organizational directors for health & safety breaches and starting to charge fees for intervention (FFI) for health & safety advice on the back of £14.1bn cost of injury and illness in UK 2014/15.

Pensions auto-enrolment, launched in the U.K. back in 2014, continues to be rolled out across smaller businesses, and Moorepay still has 100 clients going through pensions auto-enrolment/month. Ongoing compliance support from Moorepay currently covers the National Living wage (since 2015), Equalities Office gender reporting (clients with over 250 employees), the Immigration Act 2016 and the Apprenticeship Levy (April 2017).

When Moorepay’s clients have a good grasp of the basics, they can scale the technology to their business need. The technology is mobile ready and leads to the required page by typing requirements into the toolbar.  Booking leave and payslips are the two most searched items; clients can access these pages in the shortest number of clicks.  When clients are ready (or if they are already a Level 4 client), they can make use of Moorepay’s reporting capabilities (standard reports needed for compliance issues, etc.), add content (documents, media, etc.), access tutorials on using the technology and even choose dashboard styles/design their own dashboard. 

At the start of the payroll/HR journey, 37% of Moorepay’s SMB clients did not have any visibility of data, so getting them to see reports/graphics of relevant data, be compliant and utilize more advanced features of the technology is a successful step on that digitization journey.  Client satisfaction levels have doubled in three years (2014-2016) and attrition fell to 5.5% in 2016. 

So, what is next for Moorepay’s clients? In 2017 one area of focus for Moorepay is developing analytics automation capability with a third-party partner. This will help SMBs to use their people data to drive informed business decisions. 

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