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ToggleAs the year 2024 draws to a close, it’s the perfect time to reflect on a year that has been transformative for payroll, recruitment and HR in the UK.
With the new government, we’ve seen significant legislative changes and industry shifts that have reshaped how businesses operate. Let’s dive into the highlights and what they mean for your business, with insights on how mywage is here to help.
2024 highlights in payroll and recruitment:
1. Real-time earnings visibility.
- What happened: The government continued to enhance real-time earnings reporting to improve tax compliance and streamline welfare and benefits systems in the UK.
- Impact: Payroll teams faced the challenge of implementing systems capable of meeting these requirements.
- Our solution: With mywage, you can simplify real-time reporting, ensuring compliance while reducing administrative burdens.
Did you know? Approximately 40% of small businesses spend over 80 hours annually on payroll tax compliance. Additionally, 25% of small businesses have been fined for payroll tax mistakes. (businessdasher)
2. Recruitment industry challenges.
- What happened: The UK recruitment market faced some challenges in 2024, with a 3% decline in industry growth, impacted by broader economic factors (Mintel, 2024 Recruitment Market Report). Despite this, job creation initiatives and apprenticeship levy reforms have spurred activity in key sectors, particularly skilled roles. While recruitment slowed, businesses remained focused on strategic hires to adapt to evolving needs.
- Impact: As businesses concentrated on skilled roles and adapting to new compliance regulations, payroll teams experienced increased volumes of onboarding and wage adjustments. This demand for speed and compliance put pressure on HR and payroll systems.
- mywage advantage: Our all-in-one payroll and HR solutions simplify the recruitment process, ensuring efficient, compliant onboarding and reducing administrative time.
- Faster onboarding with myhr:
- Digital workflows to collect employee details, contracts and documents – all in one place.
- Automated approvals for quick sign offs and reduced admin tasks.
- Compliance made simple:
- Pre built compliance templates for contracts and right to work checks.
- Real time alerts to flag missing documentation or errors before payroll runs.
- Faster onboarding with myhr:
3. Minimum wage increases.
- What changed: Substantial uplifts to the National Minimum and Living Wages required businesses to recalibrate budgets.
- Impact: Companies scrambled to update payroll systems and maintain compliance.
- How mywage can help: With frequent updates to the National Minimum and Living Wages, staying on top of compliance can be a challenge. mywage’s payroll software is designed to help businesses seamlessly adjust to wage increases, ensuring that your payroll systems are always up to date. Whether you’re dealing with one-off changes or ongoing adjustments, mywage simplifies the process, reducing the risk of errors and ensuring compliance with the latest regulations.
Did you know? 73% of SMEs reported higher payroll administration costs in 2024 due to these changes. (employeebenefits)
4. Pay transparency initiatives.
- What’s new: Enhanced pay gap reporting and transparent pay scale requirements were introduced.
- Impact: Compliance became a top priority, with businesses relying on robust payroll systems to handle additional data analysis.
- How mywage can help: Our analytics tools make reporting on pay transparency simple and actionable.
5. The cost of living impact, skilled worker shortages and the Economy:
- What happened: The ongoing cost of living crisis and economic volatility led to a shift in the job market, with many sectors, including recruitment, facing challenges in attracting and retaining talent.
- Recruitment agencies and businesses are struggling with a shortage of skilled workers, especially in key industries like healthcare, technology and manufacturing.
- The demand for higher wages and better benefits, including flexible working options, has intensified as workers seek ways to cope with rising living costs.
- As businesses face higher operational costs, recruitment agencies are under pressure to streamline their processes and improve efficiency.
- How this affects recruitment and payroll:
- Skilled worker shortages: As companies compete for top talent, recruitment agencies must adapt their hiring strategies, including offering more competitive pay packages and ensuring fast, efficient onboarding processes.
- Rising wages and benefits expectations: The need to align with wage inflation and employee expectations around pay transparency and benefits is higher than ever. Payroll systems must be agile to accommodate these shifts.
- Economic pressures: With the rising cost of living, employees are demanding flexible pay options, job security and benefits that can help them manage their financial well-being.
- How mywage can help:
- Addressing skilled worker shortages: myhr’s onboarding tools simplify and accelerate the recruitment process, helping businesses efficiently onboard new employees. With automated workflows for contract management, document collection and compliance checks, recruitment agencies can ensure faster hiring, reducing time-to-fill and addressing the challenge of skilled worker shortages.
- Managing rising wages and benefits expectations: mywage can quickly adapt to wage inflation and changes in benefit offerings, ensuring that businesses stay compliant with evolving wage standards and pay transparency requirements. The system automates updates to wage rates, reducing the manual workload and helping businesses keep pace with wage increases, while also offering built-in analytics for pay gap reporting and transparency.
- Tackling economic pressures with flexibility: With mypod (our pay on demand solution), we can provide employees with greater control over their earnings. Employees can access their earned wages before the traditional payday, helping them better manage financial pressures due to rising living costs. This feature not only supports employee well-being but also increases retention and engagement by offering more flexible pay options in an uncertain economic climate. Additionally, mywage helps businesses save on payroll administration time with seamless integrations and automated compliance checks.
Legislative changes under the current Government:
1. Flexible working as a default.
- What changed: The Flexible Working Bill made flexible arrangements the default, requiring businesses to justify exceptions.
- Impact: Payroll systems had to adapt to manage varied working hours and patterns.
- How mywage can help: Use myschedule and our time tracking tools that seamlessly integrate with your payroll system, making it easier to manage fluctuating hours, different work patterns and compliance with new flexible working requirements.
Fact: 72% of UK employees opted for flexible arrangements in 2024. (NatWest Mentor)
2. Paid parental leave extensions.
- What’s new: Paid parental leave policies were extended, impacting staffing and payroll planning.
Did you know? 62% of businesses reported the need to overhaul their HR policies to comply and 85% of employees surveyed supported the Government’s extended paid parental leave policy. (peoplemanagement)
3. IR35 simplifications.
- Impact: The Government simplified IR35 rules, making it easier for contractors and businesses to navigate off-payroll working arrangements.
Looking ahead to 2025:
The pace of change isn’t slowing down. Here’s what to expect in the coming year:
1. Adoption of AI and automation.
- Forecast: A recent article by the SIA (Staffing Industry Analysts) anticipates some key trends set to continue in 2025; including how AI will continue to revolutionise HR, jobs and the workforce.
- AI will continue to streamline payroll and recruitment processes, from timesheet management to compliance checks.
2. Focus on employee wellbeing.
- Expected policies will mandate mental health frameworks, emphasising employee support as a retention strategy.
3. Green payroll initiatives.
- Sustainability will be a focus, with incentives for adopting eco-friendly payroll practices, such as digital payslips.
4. Pay on Demand expansion.
- Up to now, within the staffing industry, payrolling is an area that has not seen too much innovation. Weekly pay remains the norm but we could be at the beginning of an arms race where staffing becomes the new fintech and weekly pay for temporary workers becomes consigned to history. (staffingindustry.com)
- Solutions like mypod are set to grow, giving employees greater control over their finances.
Fact: 49% of employees now prefer flexible pay options, which gives them financial control when they need it most. (wagestream)
Preparing your business for 2025:
- Invest in tech: Upgrade to cloud-based payroll and HR systems to handle evolving compliance and reporting demands.
- Upskill your teams: Equip payroll and HR staff with training to embrace automation and new policies.
- Prioritise employee engagement: Transparent communication and benefits like Pay on Demand will attract and retain talent.
Conclusion: Navigating change with mywage.
The year 2024 has been a year of transformation and 2025 promises even more innovation. With mywage, you’re equipped to stay ahead of the curve. Our tools simplify compliance, streamline operations and empower your business to thrive in an ever-changing landscape.
Ready to future proof your payroll and HR? Schedule a demo today and discover how mywage can make 2025 your best year yet!