CFO South Africa webinar reveals the benefits of modernising your payroll solutions and HCM systems.
One in three Nedbank clients across human capital management and payroll platforms have garnishee orders on their accounts.
Executive head of client value enablement at Nedbank CIB, Prof Clayton Williams (pictured), described this as extremely problematic for both their customers and the bank. During a webinar hosted by CFO South Africa on 18 February on digitising human capital management, Clayton emphasised that garnishee orders don’t necessarily mean their clients are in financial distress, but that this statistic points to a societal problem.
“One out of three people employed are in that much financial distress that there is a court-mandated instruction to reach into their pockets, before the money even gets there, to take out cash and distribute it to various creditors,” said Clayton.
He said there is a direct correlation between the number of garnishee orders in the workforce and absenteeism and staff turnover. Clayton says these metrics directly affect companies’ bottom lines, making it a problem for the bank. He says banks are aggressively pursuing human capital management in the digital space because there is room to implement reward programs that can alter the way people manage their money.
He said Nedbank’s retail reward programme was designed using insights from studies on behavioural neuroscience. The programme doesn’t reduce financial distress; instead, it rewards clients for responsible financial management. Still, Clayton proposes that if banks could access companies’ capital management systems, they could design similar programmes that will encourage clients to manage their money more effectively and avoid financial fiascos. “This is an abstract concept,” Clayton conceded but said it explained why banks are interested in being part of companies’ ecosystems.
Imraan Ismail, the product manager at Labournet, also addressed the webinar. He said moving human resource functions to a central cloud-based system has benefits for everyone, including managing remote workers, expats, and company management.
He noted that centralised systems are the foundation of simplicity. Employees can apply for leave, submit performance appraisals, and access payslips remotely. “Gone are the days when businesses were held to ransom by key individuals that were responsible for different aspects of human capital management and the related infrastructure,” said Imraan. He explained that the traditional stand-alone systems placed a lot of responsibility on specific individuals.
Operations on multiple systems also meant businesses have to pay more for system interfacing and integration, and on-site maintenance. Data integrity was also dependent on the proper management of these systems.
Payspace managing director Sandra Crous told webinar participants that having a centralised system has made life easier for compliance, especially for multinational companies. She explained that international companies struggle with operating across language and currency barriers. “To stay compliant across 54 countries across the African continent, to deal in 41 currencies and 140 languages is simply not an easy task,” said Sandra. She said the most significant benefit of having human capital management on a single system is when regions consolidate reports.
“For example, if you pay people in Mauritius in rupees and people in the Ivory Coast in francs, but the company is based in the UK, those reports need to be converted to pounds, so it helps that all this information is on one system, said Sandra.
A single service provider maintains the centralised systems and their functions. Previously complicated tasks related to compliance in each country that would ordinarily be manually inputted across networks, such as compliance with minimum wage per country, public holidays, or changes in social security requirements, can be updated automatically and ready for roll-out in the business. “Therein lies the power of human capital management on a cloud system,” said Sandra.