How outsourcing and automation can help organisations navigate the HR and finance challenges of a reopening economy
Businesses have been hit hard by the pandemic, with the number of payrolled employees in the UK plummeting by over 828,000 since widespread closures and lockdowns began. With the exception of health and social work, the ONS reports that every major UK industry, from education to IT, has seen its workforce shrink at some point over the last 18 months. One function that has been hit particularly hard is administrative and support roles, which saw the highest redundancy rate of any role in the UK between Jan-Nov 2020.
Adjusting to the reopened economy will be challenging for HR and finance departments in particular, as many of these teams have been forced to downsize during the pandemic. Unplanned sicknesses, internal restructuring, and the shift to remote working, will continue putting pressure on back-office staff and businesses. Additionally, tightening government regulations around supplier payments mean that administrative tasks such as paying invoices can’t be put on the backburner for too long. At a time when businesses are scrambling to recover, is essential that back-office teams can focus on planning for the future, rather than solving internal administrative crises.
Normality brings backlogs
Yet, the workload of finance and HR teams has not decreased, meaning backlogs build up much faster. A business that once would have relied on a team of people to manage invoicing and payroll may now be relying on a much smaller team, or even no team at all. Such backlogs can lead to an increase in errors, such as duplicate payments that can amount to significant losses if unchecked, as well as additional time spent trying to recover these funds.
Pressure on back-office staff is due to intensify once changes to the Prompt Payment Code are implemented. New regulations mean that companies will be obliged to pay small business suppliers within 30 days or face hefty interest on late payments, as well as being issued stop notices on future supplies. In the long run, this will mean backlogs are no longer just an administrative issue. They will affect other areas of the business such as stock, supply chains, and cashflow. Senior staff from other departments will have to redirect valuable time towards solving an administrative crisis, instead of focusing on innovation and recovery.
Help during a time of need
Clearing backlogs is the first hurdle to overcome when getting a business back on track. However, due to the financial strain the pandemic has caused, it is unlikely that organisations can afford to hire more permanent finance and HR staff. Instead, businesses should consider supplementing their teams by partnering with an outside company who can provide access to expertise as and when they need it. This will help them navigate the inevitable rapid changes that will accompany the reopening of the economy, such as fluctuations in workflow and customer demand, as well as new and shifting government regulations. Since the deployed staff are already trained, backlogs can be are cleared quickly and accurately, making it the most cost-effective option in a time of need.
Partnering with a firm which has expertise in the areas of finance and accounting can also help businesses better adapt to the future. Gaining outsider perspective is useful for identifying the root causes of backlogs and getting practical advice on how prevent future issues. Once backlogs are cleared, senior staff will be able to gage a clearer understanding of their business’ finances, and plan for the future accordingly.
Future in automation
As businesses begin to recover, they should also look to technology as a means to reduce the administrative burden. Automation for repetitive tasks, such as processing invoices or payslips, can increase the efficiency and accuracy of company records. Digital logs prevent overpayments by ensuring that every invoice is validated and actioned accordingly, all on one system. Other areas of the business can also realise the benefits of automation, for example processing customer service queries, job applications or DBS checks.
Crucially, automation frees up staff and resources for other tasks. A recent study found that 75 per cent of office workers support the use of technology to automate some or all of their administrative burden. At a time when businesses are already under strain from the impacts of COVID-19, they must be proactive in their recovery and seek to relieve pressure anywhere they can. The road to recovery starts with reinventing the approach to back-office tasks, so staff can refocus on adapting their business to the post-pandemic environment.