Mark Jenkins

Mark Jenkins, MHR’s finance director, oversaw a major overhaul of the finance function when he first joined the company eighteen months ago. After doing ‘basic improvements’ to internal controls, Jenkins took a holistic look at finance systems from a manual perspective to see what efficiencies needed to be made and where.

His thorough audit of systems, controls and data extraction led to an entirely new automated approach and the implementation of a series of data analytics tools to help with financial workforce planning, scenario planning and cash flow forecasting.

The technology, says Jenkins, enabled MHR to make the ‘right decisions at the right time’. At a time when quick, informed decisions are vital when responding to a swiftly-changing COVID-19 landscape, automation and AI have enabled MHR to thrive.

“We haven’t needed to make one employee furloughed,” says Jenkins. “I’m really proud of that. And we haven’t needed to take advantage of any government loans or corporation tax delays. Being a financially independent family owned business was a real advantage and is unusual in our market.  We’ve been able to stand on our own two feet. That’s a real testament to our business model and our modern finance function.  This also showed a commitment to our staff and customers that MHR is there to support them”

Jenkins is acutely aware they are in a privileged position in the industry. With many other providers having to put staff on furlough and make redundancies, MHR has gone from strength to strength. They even have the benefit of two revenue streams: new business revenue and revenue from monthly rental payments from existing clients for HR and payroll solutions.

So how exactly did MHR make use of their systems to weather the pandemic storm?

“My first thoughts when the pandemic hit was how do we ensure we have a strong balance sheet and the strongest stable business base?” Jenkins explains. “Cash and capital are indeed kings, so  my team and I looked at cash flow forecasting and recurring revenues and worked out how much staff costs and other overheads it would cover. We were also able to assess through scenario planning and financial modelling, the impact on profit and cash flow if new business revenue dropped by a certain percentage.”

MHR were able to identify very early on that new business revenue was likely to decrease as a result of the pandemic. Their focus, therefore, needed to be on business promotion and lead generation.

A regular revenue stream made this possible: they could cover overheads and prioritise non-essential spend such as marketing. In essence, their forward-thinking and data-rich analytic tools freed them up to focus on new business opportunities and revenues.

Marketing spend actually increased over lockdown. Jenkins says that will continue to grow until the end of December. “Brand awareness and differentiation were key for us to help with business sales during a time of scarce resources such as new customers,” he explains.

As he points out, what better time to promote yourself as an external, forward-thinking, stable HR, payroll and analytics provider to potential clients, many of whom may have HR and payroll staff off sick or self-isolating?

Even the government’s various furlough schemes created an opportunity to react quickly and provide support, urgently needed by many customers.  MHR were able to respond immediately to the furlough scheme announcement and ensure furlough functionality was embedded in their payroll software within a matter of days. Interfacing with the government portal, HR departments using MHR software were then able to quantify the numbers of staff on furlough and ultimately claim back 80 per cent of wages.

“A large proportion of companies will be using the furlough scheme to one extent or another,” Jenkins explains. “And every company needs a HR and payroll solution. We were able to use our spend in the marketplace and become a beacon of light to attract new clients.”

None of this would have been possible without the tools to provide an accurate financial picture: financial forecasting and scenario planning gave them a degree of certainty they may not otherwise have had. For companies about to embark on their transformation journey, how should they go about bringing their people on board?

“Don’t underestimate the power of enthusiasm, ability and confidence,” says Jenkins. “This will bring people on board with you, more than any authoritarian approach. It’s being enthused and getting people enthused along with you. It’s instilling a sense of ownership into everyone and conveying the benefits the transformation will bring, so people have a vested interest in making it work.”

The approach worked for MHR: Jenkin’s team were on board right from the start: they bought into his vision of efficiencies, automation and improvements. “Install a sense of ownership and benefits, and people will want to succeed as much as you do.”