Payroll technology answers gig economy’s call for greater transparencyby
As the gig economy continues to boom, workers are calling for greater transparency in the management of their work and wages. John Whelan looks at how Quantum Employment Design can solve this issue.
The ‘gig economy’ serves an important part of today’s on-demand society, which sees taxis hailed immediately through an app and food delivered to doors at a click of a button. The workers which make up this agile workforce are able to choose who they work for, when they work and for how long – the sort of flexibility which has been demanded by so many since the pandemic started.
Since Covid-19 had an exponential effect on the UK’s labour market, with job losses and the lack of job vacancies reaching record levels, the temporary labour market has welcomed many. This market has seen growth of 5% over the past 12 months, according to the Office of National Statistics, and is expected to continue to grow as restrictions are eased. Recent research shows the demand for workers is at its highest level for over 23 years, including an increase in demand for temporary workers.
Flexible workers have always been vital for industries like hospitality and construction, but now as workers and businesses alike realise the benefits of flexible working, this has spread widely to other industries. Businesses in healthcare or IT, among others, can benefit hugely from temporary workers.
But, as this sector continues to boom, workers are calling for greater transparency into how their work and wages are managed. The limelight is cast on manual processes and outdated systems. The technology simply isn’t up to scratch.
The traditional 9-5 is long gone
As the pandemic caused a shift to remote working, businesses, which once relied on permanent teams to work the traditional 9-5 hours in the office, have had to reconsider their strategies. Employers are now open to flexible working, while using temporary workers to fill the gaps in their workforce and technology to connect teams. Now, temporary workers are able to offer businesses their skills remotely, instead of being separate from teams in offices.
Companies are now embracing the idea that ‘jobs for life’ are history and reliance on temporary labour is growing. There is an obvious shift from the traditional PAYE model to a more flexible and dynamic form of employment. This way of working breaks work down into its smallest components – minutes on a timesheet. This is called Quantum Employment.
The rise of the Quantum Workforce
The quantum workforce is made up of specialists with industry-specific skills and experience which can be delivered on demand. Business needs can be taken care of with custom-made workforces and quantum workers can work when they want for whoever they want – driving mutual success on both sides.
However, the quantum workforce is strewn across different pay rates, hours, salaries and tax allowances, making it difficult to manage. Luckily, a layer of businesses has been created to deal with this. Recruiters, Professional Employer Organisations (PEOs) and ‘umbrella companies’ offer services to pay and tax temporary workers. But, these companies are challenged with legacy systems and processes, meaning manual work takes time to complete, causing delays in payments and perhaps inaccurate pay packets.
As well as this, the supply chain for the quantum workforce is long and complex, giving low visibility end-to-end, making it easy for fraudsters to exploit temporary workers and end-users alike. Mini-umbrella companies (MUC) continue to be troublesome for both HMRC and temporary workers. As the Quantum Employment market continues to grow, these MUCs spoil the trust in the wider industry, giving a bad name to the accredited and genuine payroll providers.
Currently, businesses aren’t equipped to deal with this dynamic employment model. There is a pressing need for real-time information so businesses can keep accurate accounts and quantum workers can be paid accurately and on time. Accounting and payroll needs to be transformed.
Transforming the payroll and accounting industry
Quantum Employment Design (QED) solves the problems being experienced by managing such a diverse workforce. It’s a cloud-native platform specifically designed for the quantum workforce of today by streamlining the core processes and providing transparency.
Through this technology, businesses can gain the ability to automate manual processes such as timesheets, accelerate the onboarding experience and handle all tax calculations by providing real-time information exchange with HMRC. Digital accounting services need to process thousands of payments monthly, weekly and sometimes daily and by relying on innovative technology to do the manual work, businesses can cut the time needed to administer the quantum workforce.
As the flexible labour market progresses, there will no doubt be further challenges and updates in the legislation. This is where QED offers protection against uncertainty. It is able to change and adapt automatically, giving those who use it a seamless service.
The temporary labour market is only going to rise as more people realise the benefits of this dynamic form of employment. This has highlighted the need for development in the industry to ease the burden placed on finance teams and QED is the answer, making it easier to onboard, tax and pay quantum workers.
By using innovative technology, employment, accountancy and taxation can achieve new heights in efficiency and effectively drive the future of work.
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Experienced Chief Executive Officer with a demonstrated history of working in the accounting industry. Skilled in Tax Preparation, Business Planning, Account Reconciliation, and Accounting. Strong business development professional with a Bachelor of Commerce (B.Com.) focused in Economics from University of Birmingham.