Instant Employee Benefits Show Growing Popularity
Employers are using technology as an advantage to increase productivity and reduce employee turnover.
Financial insecurity has a dramatic effect on the workplace: The vast majority (69%) of workers are stressed about their finances, according to financial firm John Hancock, with a total of 72% admitting to worrying about their personal finances at work, and one in three do so more than once a week. Meanwhile, about 40% of Americans would struggle to find even $ 400 to pay an unexpected bill, according to the Federal Reserve.
Get into Instant Payroll Apps, which aim to target these issues by giving employees instant access to their earned pay instead of waiting two weeks between paychecks. Advocates say it can help workers avoid expensive payday loans and avoid late fees.
More and more companies are turning to instant payment apps like DailyPay and offering them as a benefit to their employees. Hundreds of employers, including Adecco, Sprinkles Bakery, Vera Bradley and Westgate Resorts, now offer DailyPay as a benefit for their employees.
EDH met Jeanniey Mullen, Director of Innovation and Marketing for DailyPay, at the Human Resources Technology Conference & Exhibition in Las Vegas to discuss why employers are implementing the Benefit, how it helps employees and orientation for instant compensation.
EDH: What’s new with DailyPay and with the trend of instant payment in general?
Mullen: It is [experiencing] surprisingly high growth. Last year at this show I think people were starting to realize what a daily salary benefit was. And now, so many companies have deployed it since. The landscape has changed from “what is it?” to “how do I get this?” “
EDH: It’s definitely a trend I’m hearing more and more about. What do you think is the reason for this growth?
Mullen: Eighty-seven percent of Americans live paycheck to paycheck. I was talking to a casino company, and they were saying that sometimes their employees come to work and don’t have enough money to eat until their next payday. Thus, casinos have set up different lunches and breakfasts, not as a recruitment tool, but as an employee management tool. I think the reality of the world has forced people to need on-demand access to their earned wages without it being a loan.
EDH: Explain how the application works.
Mullen: When a person is working they can see how much money they have. It’s not like they’re using it as an ATM; they use it as they need it. The fees are different if they want it now or the next day: $ 2.99 if they want it immediately or $ 1.99 if they want it the next day. For employers, it costs nothing. [Employees] can choose how they get the money â you can put it on a debit card, a bank account, a charge card â that’s it. You complete [the] transfer and the money is there. You can track what your balance is, you can see how much you’ve earned, how much is available, that’s how much you’ve earned, that’s when you’ll get paid next.
From a productivity standpoint, a lot of people use it to determine if they need to work more shifts.
EDH: What kind of feedback do you get from employers and employees?
Mullen: Our employers love it. The first reason [they love it] is because it is free to implement. It’s very rare to go into a business and say, âDo you want to dramatically improve your bottom line to zero? The ROI is immediately theirs, so it’s easy to sell. Just by showing people how much they earn, productivity increases drastically about 3 times, turnover is reduced between 41% and 71%. When you reduce turnover, you create significant savings for business. Depending on the industry you work in, we see a lot of people using it as a competitive advantage. And the employees love it.
EDH: What do you anticipate in 5 years, in 10 years, both for DailyPay the company, but also for instant compensation as an employee benefit?
Mullen: In 5 to 10 years, I think it will just be how people are paid.
EDH: Don’t you think payday will be every two weeks or every month?
Mullen: I do not think so. I like to think of MAGGIE – the millennials and Gen Z who get it all instantly. When you have two generations growing up, you get everything on demand – you can order Uber, you can order Uber Eats, you can DoorDash, you can Venmo – it makes sense for payroll to do the same.
Kathryn Mayer is EDHBenefits Editor and Chair of the Health & Benefits Leadership Conference. She has covered performances for nearly a decade, and her stories have won numerous awards, including a Jesse H. Neal Award and accolades from the American Society of Business Publication Editors and the National Federation of Press Women. She holds a BA and MA from the University of Denver. She can be reached at [email protected]