Case study: SUEZ payroll autosaving

Difficult economic conditions have prompted many employers to change their approach to financial wellbeing to help their people through tough times. While raising pay may be the most direct choice of options, this may not be sustainable in the long-term as rising operating costs restrict the money available to increase wages. Instead, organisations are redefining their benefits packages and reimagining the payroll function to help employees in new, innovative ways.

Organisation: SUEZ

Industry: Recycling and waste management

Size: 35,000 employees in 40 countries

Interviewee: Michelle Sutton, Head of Compensation and Reward

When recycling and waste management company SUEZ identified financial concerns among its workforce, it decided to launch a ‘payroll autosaving’ scheme to help improve employees’ financial wellbeing and resilience by fostering a ‘save before you get paid’ philosophy.

Payroll autosaving works similarly to a pension scheme. SUEZ employees pay in a set amount each month and over time, build up a contingency fund, which they can withdraw at any time. New SUEZ employees are auto-enrolled in the scheme but can opt out whenever they choose.

The scheme has been a huge success and won ‘Best reward and recognition initiative’ at the CIPD People Management Awards 2022. We spoke to Michelle Sutton, SUEZ’s Head of Compensation and Reward, about the thinking behind it.

What prompted SUEZ to launch the payroll autosaving scheme?

We identified financial concerns within our workforce and decided to take action. Our employee assistance programme (EAP) data, coupled with our employee survey feedback brought these worries into focus, particularly among our lower-paid employees. We responded by launching our payroll autosaving scheme for new joiners in 2021, in partnership with TransaveUK. The purpose was to help our employees save more and be savvier with money in the face of rising living costs.

The scheme was inspired partly by our ‘Wellness for All’ vision (to drive up wellbeing in eight key areas across the business) and also by an ambition to improve the functionality of our payroll (which was unnecessarily complicated and required a lot of manual intervention).

What challenges did you face when implementing the scheme?

We had lots of hurdles to overcome during the trial period in terms of ethics, data protection, project management and confidentiality. And getting there required clear and regular communication with our employees.

Getting our employees onboard with the scheme was difficult initially. Before the trial, we had an opt-in rate [to our then existing scheme] of only 5% and changing minds required some persuasion. The scheme had potential to create an employee relations issue, so we needed to ensure we were very open and clear about the policy.

How did the rollout happen?

We embarked on an automatic payroll savings trial in November 2021, with NEST, Harvard University, Blackrock, and the Money Pensions Service. The trial would enable us to test the waters for having a fully-fledged payroll autosaving scheme.

The trial targeted new joiners and required those opted in to put aside a default 1£40 a month, which would be automatically deducted and put in an accessible cash savings account.

What were the results?

The results have been encouraging. Our overall take-up rate increased from 5% before the trial to 13% by the end of September 2022. This was achieved by 45% of the eligible new starters (397 out 895) joining.

In all, our number of savers (who are current employees) has increased by over 200% and we predict that the number of new-joiner savers will rise by around 650 by the end of 2022.

When analysing possible impacts of this initiative, we have noticed a marked reduction in absence. This needs more investigation to establish whether this is a true mitigating factor but there appears to be some parallels. Across all absences, average days lost per absence has reduced from an average of 8.54 days in 2019 to 7.1 days in 2021 and further to 6.2 days in 2022. The reduction of days lost per absences since 2019 is 25% – this equates to direct cost saving of £174 per absence in 2022. In the period January 2022 to October 2022 inclusive, this equates to over £1.3m reduction in addition to the enhanced performance arising from the wellbeing and attendance of our people in the workplace.

Our employees have been pretty forthcoming when sharing feedback on the scheme and have lots of great things to say about it. One employee described the scheme as a “no brainer”, while another employee described the scheme as a “good and responsible thing to offer”. As one employee remarked: “Now I have savings, I’ve never had savings before. That’s a nice feeling, my financial situation is improving.”

What advice you would give to other HR teams exploring their options?

My advice to HR practitioners is talk to your employees, collaborate, share research, and be prepared to take risks. We took an organisational risk with our scheme in terms of its potential impact on employee/employer relations at SUEZ. Employees could have viewed the scheme negatively, but they didn’t. The risk was worth it as we feel our scheme has made our employees realise what a responsible employer we are.

Conclusion

Using employee survey data was a crucial step on SUEZ’s journey to improve financial outcomes within the workforce. Judges at the People Management Awards also highlighted the fact that the organisation used a trial period before committing to the scheme, the success of which “could influence future government policy on workplace savings”.

For SUEZ itself, improving the financial wellbeing of its employees through the payroll autosaving scheme has not only had a positive effect employee experience, but it has also seen improvements in absence rates, a reduction of 18.5% since 2019 – saving the business £640,000. This win-win situation for organisations and their people will continue to drive financial wellbeing initiatives forward in the future.