More companies are recognizing that immediate access to wages is critical during the pandemic, as many essential workers and families are living paycheck to paycheck.
Preparing to "head back to the office" — whatever that might mean — shouldn't mean a return to business as usual. Our understanding of workplaces, and the way we live and work, has been fundamentally shattered, and employers must use this time as an opportunity to reconsider their relationships with employees.
In recent months, workers redefined work-life balance and started to lean on managers for support beyond the boundaries of work. Employees rely on their employers for consistent income to support their families and pay for critical health care and other services. During the crisis, many employers have responded to employees' needs by temporarily offering more flexible pay options.
Related: Will new flexible pay models lure employees?
But temporary pay flexibility isn't enough. Our payment structures must now change permanently to respond to the ever-growing list of stressors that drive attrition and burnout. By using the coronavirus pandemic as a chance to deliver flexible, on-demand payment solutions, employers can boost retention and improve employee well-being — and as a result, their bottom lines.
Rebuilding worker compensation for the new decade
Deploying tools that offer fair compensation for workers by increasing autonomy should be a top business priority for all leaders. But many employers delay adopting new systems because they are cost-prohibitive and involve significant upskilling.
Prior to COVID-19, a few Fortune 500 companies at the cutting edge of digital transformation recognized the need for a pay experience that creates a deeper connection between employees and employers. By giving employees control over the timing of their own paychecks, these companies empowered workers with the financial flexibility and freedom that is vital to frontline employees.
More companies are recognizing that immediate access to wages is critical during the pandemic, as many essential workers and families are living paycheck to paycheck and require funds for essential PPE and supplies. But you should plan for a more permanent shift as we move out of pandemic restrictions and employees begin to expect more flexible solutions.
Employee pay is most often viewed by employers as a rote, transactional effort. But with digital cost-savings programs that allow employees to immediately access their pay, you can use payment as a strategic lever to drive cost savings, efficiency, productivity and employee financial well-being.
Benefits of flexible employee pay technologies include:
Mental health benefits: Employees who use flexible pay solutions report feeling reduced financial stress and increased time with their families. According to our recent report, which surveyed nearly 2,500 DailyPay users across the country about their on-demand pay habits, employees using DailyPay benefits save an average of $1,205 each year. In addition, 78% say they avoid late fees and 70% say they no longer have to take predatory payday loans.
Improved employer-employee relations: By demonstrating that you value flexibility and work-life balance, you can improve your relationship with employees. In addition, implementing these systems can be critical to both recruitment and retention. One in six employees at companies using a DailyPay benefit say they search for "daily pay" as their primary employer criteria.
Increased efficiency and productivity: Psychology shows that financial stress takes a mental toll on work. Because daily pay functionality gives employees more control over their future, 74% of employees using this feature report reduced financial stress. Helping employees make bills and other expense payments on time allows them to be more engaged and productive at work because they're able to disconnect from home stress.
In the current business environment, your organization needs to prioritize operational efficiency and find creative ways to reduce costs, while maintaining an effective and engaged workforce.
You can't afford to move backward as the working world moves forward. To attract and retain top talent — and demonstrate you care about your frontline workers — empower your employees with instant access to pay as they earn it.
Jason Lee is CEO of DailyPay.
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