Andrew Baillie of Ocado on the impact of pay cycles on financial wellbeing
One of Ocado Group’s challenges is how to support the financial wellbeing of our hourly paid staff. We have various pay cycles, which have implications not only for employees’ finances but also for the benefits we can offer them and the efficiencies we can make as a business.
It is difficult to move employees away from existing weekly pay cycles, because people want to have access to their finances on that basis. However, it is challenging to offer weekly paid employees access to some salary sacrifice benefits, because of the complexities in ensuring compliance with the national minimum wage. The potential to support employees’ financial wellbeing through salary sacrifice is huge, so it is a big driver for change for us.
In order to give people better access to benefits and to increase our operational efficiencies, paying everyone on a monthly basis while still allowing more frequent access to their pay would be the ideal solution.
We have been looking at salary advance products that would help us to do this, and we have been speaking to our new payroll provider, which is also moving into the salary advance space. A final consideration is how we can roll this out on a global basis.
Day-to-day financial advice
We also must take account of what employees want and need. During the pandemic, there was a big focus on physical and mental wellbeing, but it also allowed people to reflect and to save. Now people are coming back into work, back into spending and socialising, and this puts financial pressures back on, and brings a renewed focus on financial education.
Like many organisations, we focus heavily on pension education and offer one-to-one pension consultations, but the one thing employees bring up time and again is that they want the equivalent from a financial perspective. So, we are having to think about how we create an equivalent to our pension surgery that we can run to help people with their day-to-day finances.
I believe this is something that will become crucial in the months ahead, as people continue to feel the pinch of the cost-of-living crisis. Hopefully, we can help to support people’s financial wellbeing rather than just giving them more money, because that, inevitably, will just prolong inflation.
