Have you ever wondered why most employees are paid biweekly or monthly? The evolution of pay models and practices is an interesting topic, but one that also begs the question: In a digital world with a growing cultural shift towards immediacy, why shouldn’t employees be remunerated for their services promptly?
Considering almost 80% of Americans live from paycheck to paycheck, the biweekly or monthly payment model has negative consequences for many people. Today, payment delays aren’t only unwelcome – they’re also unnecessary.
Every day pay presents a practical opportunity to immediately pay workers what they’re due.
In this article, we’ll explore the concept and mechanics of the every day pay model and outline some of the key benefits it offers both employers and employees.
As the name suggests, every day pay is a payment model where employees are given the option to access the money they’ve already earned on a daily basis. Essentially, it gives people the freedom to choose when they want to get paid. It’s often referred to as instant pay, on-demand pay, or Earned Wage Access (EWA).
Today, every day pay is enabled by advances in technology; software can be easily integrated into a company’s payroll and time management systems.
People worried about their finances are more likely to be irritable, withdrawn, and distracted at work. When this happens, it’s easy for interpersonal conflict in the workplace to flare up. In addition, Financial Health Network reports that employees under financial stress are twice as likely to use sick time when they’re not really sick.
Instant pay is a great lever to help employees improve their financial wellbeing and reduce money-related stress that can impact their engagement and productivity.
According to recent research, some 56% of Americans cannot cover an unexpected $1,000 bill with savings. In addition, some 64% of US households are “financially coping and vulnerable,” and low-to-moderate-income (LMI) households are seven times more likely to use quick-cash methods such as high-cost lenders than non-LMI households.
Instant pay enables employees to access wages they’ve already earned rather than needing to approach providers of predatory payday loans. It provides a practical and emotional safety net when emergencies or unexpected expenses arise.
In a tight labor market, companies of all sizes and industries need to hone their employee value proposition to attract and retain scarce talent. Instant pay is one way to do this.
Offering this flexible payment option sends a signal to your current and prospective employees that you care about them and their wellbeing. This builds employee morale and fosters a positive attitude towards the business. Employees who feel valued and supported will also be more likely to stick around longer.
The best instant pay service providers make things easy for employers and employees. For example, with Payactiv’s solution, employees can immediately access money for hours already worked, transfer it to their bank account, load it onto a Payactiv card, or pick it up in cash at Walmart. They can even use their wages for an Uber or daily necessities from Amazon.
We supply the money to cover your employees without disrupting your current systems. It’s not a loan, and there’s no interest; it’s just their money when they need it. Our instant pay service is low-cost to employees and zero-cost to employers. There are no credit checks and no adverse impact on credit histories.
Digital payment of wages also provides a means for your business to securely process wages and allows you to pay employees remotely, even during disasters.
The concept of every day pay delivers win-win outcomes to employers and employees alike. It’s a great example of how technology can be leveraged to help make people’s lives the best they can be.
Payactiv goes beyond simply offering instant pay. Our all-in-one Livelihood Platform takes a holistic approach to prioritizing employee financial wellness. This includes services that help address immediate financial needs and make it possible for people to take steps toward long-term financial stability and growth.
Our services include on-demand access to earned wages, cashless payouts of tips and mileage, off-cycle pay, savings and budgeting tools, a discount marketplace, and a communication platform for deskless employees.
We also facilitate fast, flexible shift coordination. You can give your employees easy access to your corporate shift scheduling system via their smartphones. They’ll get alerts when new shift openings appear, which they can pick up with just a click on the app. You can also set up shift incentives to help you cover those difficult-to-cover holiday, night-time or weekend shifts.
Learn more about Payactiv’s Service, or book your demo now.
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