On-demand pay: A game-changing benefit as the economy (cautiously) reopens

Offering an on-demand pay benefit can prove to be a strategic differentiator in post-pandemic rehiring.

As employers attempt to lure furloughed workers back, they will also need to seek out meaningful benefits that can set them apart from the competition.

For the first time in our lifetime, the world hit “pause” as the COVID-19 pandemic forced people into their homes and disrupted the world as we once knew it. Living rooms became makeshift boardrooms, and kitchen tables became the base for seemingly endless Zoom calls. The workplace we left behind was completely shattered. And that might have been the best thing to happen to work in a long time.

As the country attempts to reopen, it’s clear that HR leaders will need to re-evaluate the ways in which companies work and find novel ways to operate leaner, smarter and with greater efficiency. At the same time, they will be challenged to ensure the safety and well-being of their workforces by carefully planning for the physical environments that their workers will return to. Not to mention they will need to define a new culture, one that is supported remotely.

Related: Remote work: 7 ways to help employees adjust to the new normal’s new workplace

As employers attempt to lure furloughed workers back, they will also need to seek out meaningful benefits that can set them apart from the competition and promise a better future than the enhanced unemployment benefits currently offered. There are some very interesting options out there for them to explore.

Digital acceleration has taken place in remote telehealth, insurance claim scanning, contactless payments and on-demand pay. Employers are empowering their workers to feel safe with these new digital experiences, including instant-pay apps on mobile devices.

Offering an on-demand pay benefit can prove to be a strategic differentiator in post-pandemic rehiring and a key to reducing employee turnover. As many industries compete for the same workers in the same labor pool, offering cost-saving benefits that are attractive to those looking to re-enter the workforce will be a fundamental consideration — particularly for those who have been out of work for any length of time and who need access to their earned pay, right from day one.

Many forward-thinking companies have come to see pay as more than merely a weekly/biweekly transactional effort. Pay is becoming a strategic lever they can use to drive efficiency and reduce turnover rates, while empowering employees with the ability to harness the power of their pay and increase their financial security.

The health crisis has taught us that having access to earned income is not just a luxury. It could be a life-saver, not only for individuals but for their families as well. Asking employees to wait two to four weeks for a paycheck is no longer a viable option in times of stress, especially when medicine and other essentials need to be purchased while bills still need to be paid.

Providing access to pay on-demand helps employers rebuild the trust that was lost when the pandemic first hit and employees were laid off. Allowing employees access to their pay as they earn it helps them to feel more connected and more valued by their employers, leading to higher employee engagement, retention rates, job satisfaction and productivity.

In a recent survey, 1 in 6 (16%) survey respondents reported that they applied to their current jobs because they offered a daily pay benefit. This number is likely to increase as the demand for this benefit grows. In addition, access to on-demand pay saves employees, on average, $1,205 per year in reduced fees from loans, overdraft fees and late fees. The survey also showed such a benefit has helped them:

In a world where we can order food, cars, dog walkers and home repairs with the push of a button on our mobile phones, it’s time to bring the process of paying employees into the 21st century. Employees are accelerating demand for early access to pay, and both employees and businesses are reaping the benefits of offering a benefit that helps to re-establish trust.

Jeanniey Walden is chief innovation and marketing officer at DailyPay.

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