QSR Combats High Turnover With On-Demand Pay

Industry: Restaurants, QSR
Key Takeaways

Easy implementation process

50%

Increase in retention for Payactiv users

Reduced operating costs

The Employee Benefit That Actually Lowers Operating Costs

The Challenge

JAE Restaurant Group’s story began back in 2014 when three franchisees merged
their businesses and quickly grew to be one of the largest Wendy’s franchisee
groups in South Florida. Merging their companies gave them the stability and
sustainability to grow their business to more than 200 locations in Florida, New
Mexico, Texas, and Tennessee. Known for its redheaded girl logo, square burgers,
and Frosty drinks, Wendy’s franchise is one of the top fast food chains in America;
however, like the rest of the QSR industry, it also struggles with employee turnover rates as high as 130%.Offering 99-cent menu options, Wendy’s keeps their menu prices low by keeping their operating costs to a minimum. JAE’s management wanted to lower their turnover rates by helping their hourly workforce with financial liquidity, but the struggle was how to do that on such razor thin margins. They needed a way to help their crew members avoid going to payday lenders without increasing operating costs. It seemed too good to be true, but they were pleasantly surprised to find such a solution with Payactiv.

• Help improve the financial wellness of hourly crew members
• Lower the high turnover rates of their workforce
• Offer a benefit that will not affect the company’s operating expenses

Payactiv’s customer support has been fantastic. They have remained engaged
throughout the whole process. We always felt comfortable asking for help and could count on them for a quick turnaround time.

The app is very user friendly. Our workers are not very tech savvy, but they were able to get started quickly and have had a great experience using it.

The Solution

JAE was in the process of transitioning to a new HCM solution from ADP when
they found out that some of their competitors were already offering on-demand
pay to their workforce and how much it helped them with employee turnover
issues. As they began to evaluate different on-demand pay providers, Payactiv
really stood out, not only because of API integration with ADP, but also because of Payactiv’s unique business model. While other providers required JAE to upfront
the money for on-demand pay or forced the users to access more wages than they
should, Payactiv offered pre-funding and guardrails for their employees.JAE found a solution from Payactiv for their workers’ financial liquidity by letting them access their earned wages instead of going to predatory loans and cash advance stores. This access to on-demand pay was zero cost to JAE, yet it helped them recruit and retain more employees, particularly during the COVID-19 pandemic when they were also competing with unemployment benefits. It costs a lot of money to constantly recruit and train new employees. Payactiv actually helped
save on operating costs by increasing employee recruitment and retention, especially during that first week of new hire onboarding.

• Financial wellness solution that is easy to implement
• A solution that doesn’t affect JAE’s cash flow or business process
• On-demand pay that has guardrails in place for employees and is not predatory

The Results

JAE’s employees get paid biweekly, but because they offer Earned Wage Access
through Payactiv, their employees can now access their money whenever they need it. Since implementing Payactiv, JAE has seen a significant increase in employee retention and estimates that about 50% of the users are staying longer. The number of active users continues to grow, but so far the most popular feature has been Instant Deposit, allowing their employees instant access to their wages.JAE’s management team was concerned about how the implementation process would go given that they had multiple entities that all had to be set up and automated in the system. However, from start to finish, they were very happy with the level of support provided by Payactiv. Payactiv’s dedicated account management team ensured a smooth implementation process and was available to answer all questions—from finance and legal to technical and customer support. Payactiv
provided everything needed, including training sessions and materials, to ensure
easy onboarding and the program’s success.

• Significant increase in employee retention for Payactiv users
• Smooth implementation process with dedicated account management team
• Reduction in operating costs due to better retention numbers