Optimizing employee engagement while also making your organization an attractive place to work for ambitious jobseekers often requires adopting new strategies and embracing new technologies.
Consider the example of on-demand pay. This emerging payment model has already shown a positive impact on engagement and retention.
Here is some information on why you should strongly consider introducing it as an employee benefit at your company.
What you need to know
On-demand pay offers an alternative to the traditional payment schedules, which usually run in one or two-week cycles. Using on-demand pay can yield numerous benefits for both employees and employers.
Most employees are used to waiting two weeks to receive a paycheck. That can be frustrating as some employees need the money immediately to pay bills or deal with an unexpected financial crisis. Those employees wish to receive wages for hours spent working as soon as possible. For example, someone who works an eight-hour shift on Monday doesn’t want to wait two weeks to receive payment for that shift.
What makes on-demand pay great is that those employees no longer have to wait. Thanks to on-demand pay solutions, workers can request wages for hours worked almost immediately after a shift is complete.
Attract the best talent
It’s easy to understand how workers benefit from on-demand pay solutions. Accessing one’s earned wages right away is preferable to waiting a few weeks for a paycheck. That is particularly true if workers have bills to pay and therefore can’t wait to receive their earnings for very practical reasons.
That’s not an uncommon issue. According to Federal Reserve data, approximately 40 percent of American workers would have difficulty covering an unexpected $400 expense. Knowing they can withdraw their earnings ahead of time should emergencies arise could help workers relax more throughout their daily lives.
The benefit helps set companies apart for recruiting purposes. Companies that pay on-demand become 2-2.5 times more attractive to a candidate, according to research conducted by EY.
On-demand pay helps keep employees
Employers also benefit from offering on-demand pay options to their workers in other areas. First, when workers are more relaxed, they are more productive. Research shows that relaxation is key to productivity, while stress and tension can prevent someone from focusing on their daily tasks.
Workers themselves have also indicated that on-demand pay solutions would influence their choice to stay with a current employer or accept an offer from a potential new employer. According to surveys, about 79 percent of workers state that knowing they could access their wages whenever they wish would play a role in their decision to work for a particular company. According to the EY research, retention increases by 30-35 percent.
How to adopt the on-demand pay model
Embracing an on-demand pay program can be ideal for both you and your workers, but there are a few things to think about.
First, you’ll want to use a system that’s easy for your employees to learn. An on-demand pay solution doesn’t offer any benefits to your employees if they don’t understand how to use it. Training is key.
Next, you’ll want to work with an experienced provider because compliance regulations must be followed for on-demand pay.
Federal regulators have already set forth certain requirements regarding on-demand pay compliance:
- Employers must give employees a choice to determine which account the money they receive from an on-demand pay product gets sent to.
- Employees cannot be required to pay any fees for using an on-demand pay product, receiving money through one, or starting an account with one.
- If an employer chooses to use an on-demand pay service that involves the use of prepaid cards, they must be available to employees through a reasonable selection of reputable merchants.
- The service an employer chooses must be one that workers can easily use at no cost.
- Workers must be informed that they can set up an account without any fees or expenses.
There also can be state laws that impact on-demand pay compliance in your area. Ensure you and your HR team are staying current on these laws.
AnytimePay is fully compliant and easy to use
Edenred’s AnytimePay solution is a fully compliant, on-demand pay program that gives employers and employees everything they need.
AnytimePay allows employees to take wages immediately and then deposit the funds from their paychecks to a prepaid card. The card can be used to purchase food from restaurants, grocery stores, or delivery apps once the card is loaded. The transaction takes seconds to load.
AnytimePay also makes it easy to manage the program for administrators. Payments are processed each pay cycle, and you don’t have to worry about debt collection. Throughout the whole process, your business maintains complete control while the Edenred team helps maintain all compliance standards.
On-demand pay is becoming increasingly popular. As it grows, your employees will begin to expect it. Boost employee engagement and attract the best talent.
Are you ready to make on-demand pay part of your benefits offering? Schedule a meeting today, and we’ll be happy to review all your options with you.