flexi pay - newcross healthcare … · day can be payday’, detailing that at least 15 million...

Flexi PaySeptember 2018HealthForceGo®

Flexi Pay Newcross Healthcare | 3

Contents

About Newcross Healthcare 4

Executive Summary 5

The Payday Loan Problem 6

Pioneering ‘same day pay’ for Healthcare Staff 9

Flexi Pay: Functionality 12

Employee Response Survey 14

Final Summary 17


About Newcross HealthcareNewcross Healthcare1 is an independent organisation that provides highly trained staff, clinical expertise and administrative support to assist those who require our care services. We’ve been providing exceptional healthcare across the UK since 1996.

Our ValuesWe are guided by a common set of values – our philosophy of care is a holistic, transparent and person-centred approach. It ensures everyone understands our shared vision. We value trust, empathy and expertise.Our commitment to caring for people is also reflected in our team values. Everyone working as part of the Newcross family understands what these core values are, and how they contribute to the service we provide. Together, we make sure every client receives the high standard of service possible.

Our ServicesThrough our nationwide network of local branches, we deliver two distinct types of services. We provide care in establishments, such as nursing homes, hospitals, schools and hospices. Additionally, we're also pioneers in Complex Care scenarios, where our specially trained staff provide one-to-one support, typically within an individual's home.All our carefully selected healthcare professionals are permanent employees supported by clinical and administrative teams.


Executive Summary

In the current economic climate, a necessity for short term financing exists. As Britain’s largest payday lender, Wonga,2 entered administration in August this year, the question arises: What viable options are there to replace it? This white paper observes the quandary of the payday loan in Britain today, in juxtaposition to the expanding gig economy, and puts forward a solution derived by the CEO of Newcross Healthcare, Stephen Pattrick: Introduce business-led same-day-pay schemes.

To this end, Newcross Healthcare has launched Flexi Pay, a fast payment initiative accessible through company app HealthForceGo®,3 which allows staff to access up to 50% of earnings from completed shifts prior to payday.

Stephen PattrickChief Executive OfficerNewcross Healthcare


The Payday Loan Problem

Research published by StepChange debt charity on 28th March 2018 details the rise from 1.1 million households requiring high cost credit in 2016, to 1.4 million in 2017.4 Over the past couple of years, the UK has witnessed a significant increase in the quantity of households resorting to high price payday loans in line with the rising costs of everyday living.

The report, ‘What sort of credit can help low income households?’5 describes how many low income families have resorted to the “safety net” of high-cost credit, many taking out payday loans for day-to-day expenses. “Regularly relying on high cost credit puts added pressure on already tight budgets and leaves households particularly vulnerable to falling into problem debt,” the report’s authors write.

Supporting this notion, the FCA discovered that almost 4 million people used some form of high cost credit annually, at a value of over £8 billion,6 whereas the total value of lending from responsible finance providers in 2016-17 was £22 million to around 55,000 consumers.7 Credit unions have increased their number of members to around 1.8 million, but are inaccessible to many vulnerable people.

The Death of WongaIn August this year, Dr Joseph Spooner, Assistant Professor of Insolvency Law at LSE Law, commented on the fall of pay day loan companies in The Economist. Dr Joseph Spooner said many pay-day loan businesses relied on “sweatbox lending”,8 referring to when debtors entered or neared default, they would be advised to take out new loans repeatedly.

5,000 people who used Step Change’s online debt counselling over one year showed signs of anxiety or depression


The day after the article was published, Wonga collapsed into administration, following a deluge of compensation claims costing £550 per claim to process.

The demise of Wonga, formerly Britain’s largest payday lender, leaves behind a gap which highlights the importance of better, more ethical alternatives when it comes to short-term financing, filling its place.

Newcross: A ‘hybrid gig’The millions of freelancers, contractors, temps and on-demand workers in the British workforce share a commonality: They together comprise the ever-expanding gig economy.9 For those building a career within the gig economy, the configurations of pay and schedule are virtually unlimited in scope. Flexibility is often cited by ‘gig workers’ as the primary incentive for entering into this style of employment.

According to new data by job search engine Adzuna.co.uk, numbers of UK workers on zero hour contracts have more than tripled since 2012,10 propping up overall employment levels by accounting for almost a quarter of overall employment growth. This allows employers to hire staff with no guarantee of work.

Newcross Healthcare have created a ‘minimum hours’ contract, allowing for malleability in terms of hours completed, while still providing the security of guaranteed work. The majority of healthcare staff members are on this ‘annualised hours contract’ of 337 guaranteed hours per year.

Frequently addressed criticism of the gig economy often refers to there being limited initiatives, minimal training and very few gig worker-friendly policies. Every month, Newcross deliver between 150 and 200 courses to over 1,000 Nurses and Healthcare Assistants.


Staff receive holiday pay and are eligible for statutory maternity and sick pay, recognised as employees as opposed to ‘workers’. Flexi Pay is the latest addition to the plethora of benefits Newcross offers.

Newcross Healthcare does not penalise people for cutting or changing their hours pattern. Moreover, staff members who decide to leave the business may re-join once having left. Newcross Healthcare provides the flexibility of gig work, security and access to same day pay.

“ The gig economy is growing, with a quarter-of-a-million vacancies on offer.”


Pioneering ‘same day pay’ for Healthcare StaffFlexi Pay has the ability to pay Newcross Nurses and Healthcare Assistants within hours of completing each shift. The UK-wide initiative, which completed successful trials in various regions, is now up-and-running in all active Newcross branches, allowing healthcare professionals to opt-in to be paid up to twenty-four hours after they’ve completed a shift. The service, believed to be the first of its kind in the UK, is managed by an app called HealthForceGo® which matches shifts with the best qualified staff available.

Using a smartphone, employees select shifts according to their availability. Clients subsequently verify workers’ completed shifts electronically and gross pay is calculated.

Typically, most UK healthcare workers are paid weekly or monthly but with this new service, they have the option to request an advance against the completed shifts and be paid as quickly as one hour after they’ve finished a day’s work. Newcross Healthcare CEO and co-founder Stephen Pattrick, commented that conscientious employers should always be mindful of staff needs and preferences.

“At Newcross, we’re relied upon to deliver essential care for sick or vulnerable people. One of the reasons clients choose us is that they can trust us to respond quickly to the needs of our service users. Sometimes that means placing staff with very little notice. If we’re asking our people to be flexible, I think we also have a duty of care to be flexible. That should include pay.”

“ At Newcross, we’re relied upon to deliver essential care for sick or vulnerable people.”

‘ 25% of workers state that they have suffered from a lack of concentration at work due to their finances’ ‘The Workplace Wellbeing Study 2018’ Vitreous World


According to the King’s Fund, least one in every ten of the UK working population is employed within the health and social care sectors,11 but increases in demand for qualified staff have not been met with commensurate supply in the labour market. Stephen Pattrick highlighted that the growth of Newcross has only been possible because the organisation is constantly evolving in response to the market.

“The labour market is changing rapidly, most notably with the emergence of the ‘gig economy.’ Many of these changes run the risk of compromising quality or being intrinsically unfair to workers. In the healthcare sector, where there’s an acute shortage of qualified staff, there is a clear imperative to work harder to attract and retain staff. Maintaining the highest standards of care and fair treatment of staff is the best way to compete for the best people. Our technology is playing a key part in realising this ambition.”

The new approach to pay has been part by a wider programme of investment within the Newcross network, creating innovative ways to recruit and train staff using digital technology, including ‘virtual shift’ online learning environments and video interviews.

The decision to limit the available advance amount to 50% of the money earned on each shift was taken to ensure complications such as negative pay do not arise. Stephen Pattrick explained the reason for this decision:

“The minimum frequency for submitting RTI forms to HMRC is on a weekly basis. Our swift payment of staff is akin to paying ‘advances’ on wages, it is not payment in a payroll sense. We believe we should be able to pay our people quickly. However, in order to offer this service, we have a responsibility to ensure it is used appropriately.”

“ The labour market is changing rapidly, most notably with the emergence of the ‘gig economy.’”

“ We believe we should be able to pay our people quickly. However, in order to offer this service, we have a responsibility to ensure it is used appropriately.”


Newcross Healthcare led the way with this kind of payroll technology, the founders of Amazon and Microsoft following suit by backing mobile app, Wagestream, which similarly allows employees of participating companies to draw money from their pay packets early.

However, ‘same day pay’ is not a phenomenon unique to the UK.

On October 11th, Market Watch released and article entitled ‘The end of the two-week pay cycle: How every day can be payday’, detailing that at least 15 million people each year 12 use at least one small-dollar credit product, including payday or pawn loans, according to the Chicago-based Centre for Financial Services Innovation.

DailyPay, a US-based fast payment service now works with about one hundred companies, including the house-cleaning service the Maids, handbag maker Vera Bradley, bakery chain Sprinkles Cupcakes, flooring company Empire Today and timeshare-rental firm Westgate Resorts. DailyPay offers employees 100% of their paycheck instantly. Fees are paid either by employees or by employers if they offer the service as a perk. Transaction fees max out at $3, similar to an ATM charge, said DailyPay CEO Jason Lee.

While on-demand payment companies such as DailyPay allow workers to decide as and when they are paid, Newcross Healthcare have furthered this concept in the belief that these services should be available ‘in-house’ to employees.

“We put the user at the heart of every decision we make when developing new features for HealthForceGo®. It began with digital timesheets where our clients now verify shifts with a swish of their finger. This dramatically reduced processing time and makes shift pay instantly available to be withdrawn by our new service - Flexi Pay. Flexi Pay is unique in the market and gives our staff the ability to withdraw shift pay the same day they work. It helps them to better manage their finances and avoid high interest pay-day loans. The feedback we’ve received has been extremely positive and we’re excited to continue building new features that make our staff’s working lives easier and more enjoyable.” – Hamish Irving, Head of Platform

“ We put the user at the heart of every decision we make when developing new features for HealthForceGo”


Flexi Pay: Functionality

Eligible Flexi Pay users are permitted to withdraw up to 50% of the value of verified applications. Funds will be subsequently deposited in the user’s bank account either on the same day or the next working day dependent on their time of submission to the Newcross Healthcare finance department.

Flexi Pay allows for a mass-scale advancement of pay on the subsequent payslips of HealthForceGo® users. Up to 50% of pay from a shift can be accessed, the remainder is held towards tax, national insurance and arrestment of earnings liabilities on the following payday. The minimum amount that can be withdrawn is £10.

Provided a shift is not ‘flagged’ by the branch, has not already been paid and is verified, an advance amount may be paid to an eligible user. Advanced algorithms and data verify Healthcare workers’ electronic timesheets and pass them for payment.

There is a £2 administration fee for each successfully paid Flexi Pay withdrawal request. This amount will be deducted from the Flexi Pay amount. Any associated costs exist to implement the service. Surplus funds are then reinvested into benefit schemes as and when possible.

Payment requests received after 5.00pm appear in the user’s bank account by midnight the following working day. Flexi Pay payments will appear as an advanced amount in your next payslip.

All Flexi Pay withdrawals are payable at Newcross’ discretion.


Between 14th May 2018 and 28th September 2018, 20,638 separate Flexi Pay requests had been made and £1,209,792.80 paid out in total, the average transaction amounting to £58.60.

Of Newcross’ 7042 Healthcare Staff, 1947 individuals have utilised the service to date.


Employee Response Survey

Flexi Pay proved a success in Scotland, the South-Central region, the South West and Wales. It was rolled out in the South East, Scotland and South Central on 20th June 2018 and in the South West and Wales on 8th August 2018.

In order to examine the response to Flexi Pay by its users, Newcross released a survey on 24th August 2018, to staff where HealthForceGo® is live. It gleaned a total of 498 responses during a seven-day period. These responses revealed that 95% of participants had heard of Flexi Pay, 42% had used the service and 77% might use it in the future. 83% of participants felt as though Flexi Pay could benefit them during their time with Newcross Healthcare.

The survey also revealed that 17% of participants had taken out a payday loan, and a further 8% had considered doing so. Poignantly, 78% of people voted ‘Yes’ when asked: ‘Do you think that having access to Flexi Pay would prevent you from taking out a payday loan in the future?’

An investigation published on 13th August 2015 entitled ‘Payday lending market investigation’ undertaken by the Competition and Markets Authority (CMA), shows regarding overall usage, most payday loan consumers (53%) had taken out payday loans to cater for living expenses like utility bills and rent costs.13 Newcross’ survey showed that 52% of HealthForceGo® users who accessed Flexi payments, spent their advance on household bills.

According to the same CMA investigation, the average size of a payday loan in the UK stands at £260 and almost all loans are £1,000 or less in value. The average monetary value of Flexi Payments withdrawn by HFG users recorded on 6th September 2018 amounted to £60, drawing a correlation between the two short term financing methods.Following these results, Flexi Pay was launched in the North and East regions on September 19th 2018.


Question oneAre you familiar with the Flexi Pay feature of our HealthForceGo app?

Question twoHave you used Flexi Pay?

Question threeDo you think you might use Flexi Pay in the future?

Question fourDo you thinkthat Flexi Pay could benefit you?


Question fiveWhat did you spend your last Flexi Pay withdrawal on?

Question sixDo you think that having access to Flexi Pay would prevent you from taking out a payday loan in the future?

Question sevenHave you ever taken out a payday loan?


Final Summary

At Newcross, the introduction of Flexi Pay has been a huge instrument of change.

Looking to the future, the feature looks to adapt in line with the requirements of those who are utilising it. It will continue to be closely monitored by Newcross Healthcare’s finance team.

As our fast-payment technology delivers staff an advance on their wages, the changes that have been implanted also serve by being socially responsible and environmentally sensitive. In a business which values efficiency, the economic and environmental impact of initiating a paperless timesheet experience, combined with the lessened opportunity for time wasting, together contribute in ensuring that company resources are used appropriately.

In addition to existing as a swift alternative to typical advance payment systems, Flexi Pay has proven to heighten the financial wellness of Newcross Healthcare employees, demonstrated by the response survey. Flexi Pay seeks to promote the wellbeing of staff, reducing stress in the workplace thereby encouraging employees to go on to deliver only the highest quality of care to our clients and service users.

As a socially conscious employer, Newcross sets the bar high. A system has been created which is in fitting with the ethos of the business, reflecting the core values of trust empathy and expertise. This end goal has been achieved by providing a quality service upon which Newcross Healthcare staff can rely.


Stephen Pattrick offered a final comment:

“Our call is clear. Not only would I advise other ethically-driven organisations to implement a service like Flexi Pay, we also urge the UK government to publicly support and encourage these private initiatives.

Workplace productivity is highly likely to be impacted by financial stress. Given the nature of what we do as a healthcare provider, we are simply unprepared to put the quality of the service we provide at risk. This is why we’ve chosen to invest in a financial wellbeing programme.

As highlighted by the statistics and our supporting survey presented within this document, we are fulfilling an important need. It is our belief that access to these services should be widespread, altogether ridding the necessity for unaffordable lending”.


Endnotes

1. Newcross Healthcare is an independent organisation that provides highly trained staff, clinical expertise and administrative support to help care for sick and vulnerable people. More information can be found at newcrosshealthcare.com

2. Wonga.com, also known as ‘Wonga’ is a British payday loan provider of "short-term, high-cost credit" that was founded in 2006 and has operations in the UK, Spain, Poland and South Africa. It is a trading name used by Wonga Group Limited, operating through WDFC UK Limited and Wonga Worldwide Limited.

3. HealthForceGo® is a proprietary technology developed by Newcross Healthcare to quickly and safely manage the deployment and supervision of Nurses and Healthcare Assistants. The smartphone app can be downloaded to Apple and Android devices and provides real-time updates of available shifts to suitably qualified staff. It also ensures that all shifts undertaken are logged and approved before staff are paid.

4. StepChange commissioned YouGov plc to conduct general population research: Total sample size was 5,052 adults. Fieldwork was undertaken between 13th - 18th December 2017.

5. StepChange Debt Charity (2017) ‘The high cost of credit: A discussion paper on affordable credit alternatives’

6. Financial Conduct Authority (FCA) (2017) High cost credit review FS17/2 technical appendix table 4

7. Responsible Finance (2017) Annual Industry Report 20178. Dr Joeseph Spooner ‘Wonga’s woes spell the end of the payday-loan

era’ in The Economist. Accessible at: https://www.economist.com/britain/2018/08/30/wongas-woes-spell-the-end-of-the-payday-loan-era

9. A labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

10. Data from Adzuna.co.uk11. The King’s Fund ‘Overview of the health and social care workforce’

The King’s Fund, https://www.kingsfund.org.uk/projects/time-think-differently/trends-workforce-overview [Accessed 2 September 2018].

12. Accessed https://www.marketwatch.com/story/the-end-of-the-two-week-pay-cycle-how-every-day-can-be-payday-2018-10-10

13. Competition and Markets Authority, ‘‘Payday lending market investigation’ 24 February 2015, p4.

Unless stated otherwise, all text, photography, data and illustrations© Newcross Healthcare Solutions Limited 2018. All rights reserved.

‘Newcross’, ‘Newcross Healthcare’, ‘Newcross Healthcare Solutions’ ‘HealthForceGo’, ‘Nurchat’, the bisected cross roundel device and all associated design features or trading styles are

trademarks or registered trademarks wholly owned by Newcross Healthcare Solutions. Any unauthorised use is strictly prohibited. 09/18043

flexi pay - newcross healthcare … · day can be payday’, detailing that at least 15 million...

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