Wouldn’t it be nice if you could get paid daily for the number of hours you work, or if you could find a simple way to attract talent as an employer? Here’s something funny – you can! Recently, companies have adapted to same-day-pay to help attract employees so their employees can instantly reap the reward of their hard work instead of waiting on the average bi-weekly or monthly check distribution.
What is Same-Day-Pay?
Same-day-pay, also referred to as real-time pay or on-demand pay, is a payment option that eliminates traditional pay period intervals– weekly, biweekly, or monthly – and instead offers employees instant payment for work. More and more businesses are exploring this option in order to attract and retain employees. The value of hospitality employees is high, but as we saw from the pandemic, it can be scarce. This payment “solution” can be useful to help keep consistent and reliable staff to run a hotel properly.
Who is Same Day Pay Targeting?
The younger generation of workers are attracted to same-day-pay because they tend to set short-term financial commitments and enjoy the flexibility of the work. This allows employees to plan for how many days or hours they need to work in order to save up for or invest in their goals. This often gives hourly employees incentive to pick up extra shifts, and according to a survey by DailyPay, 56% of users said that this new system and platform motivates them to work more hours. The benefit for salaried employees comes in a different form. If something unexpected were to happen, they can get their pay faster to ease their financial stress.
This simple style of pay also benefits employees to ensure they can pay bills on time. Real-time pay can act as a lifeline for them and makes your company different from competitors as well as attract applicants who many have a busy schedule outside of work. Employees can access funds quickly and this will give both salary and hourly employees less stress and more comfort with their employer.
How Does It Work?
Companies can now pay their employees on demand using a same-day-pay platform in correlation with their payroll system. This payment can be issued as credit or on a separate card. The platform provider is repaid by the employer on the actual payday or upfront.
One thing companies need to keep in mind is they will have to have more money on hand instead of using the traditional model where they have time to gain and maintain cash for payment distribution. This change comes due to cash needing to be immediately available to employees.
Tips For Employers
In order to not overuse this method, some companies set a predetermined percentage of daily wages that employees have access to once their day of work is complete. Not all companies take this precaution; however, this can be the case.
Tips For Employees
On the designated platform, employees can track how much money they earn daily and can access this amount once their shift has ended. On the downside, there may be a fee to access wages early. Most of the time, these fees range from $1-$5; however, this fee is much lower than an instant transfer fee or others that may be placed on a normal bank account. Some companies, in order to help benefit their employees, will cover the cost of the fees. This allows easier and simpler access for employees, but both employees and employers have pros and cons of using same-day-pay.
What Does this Mean for You?
Same-day-pay can give your company an innovative twist along with a competitive edge. This attractive benefit can be hard to set up and put in place, but overall, it can become a great asset. Think about what your employees would want. Think about what will help you retain and gain beneficial and hard-working employees. Look at what your competitors are doing! Overall, do what you think is best for your business to remain competitive for talent.