Most payroll practitioners fundamentally believe that adopting on-demand pay solutions will translate to yet another tool payroll must test, deploy, and support in their long list of critical responsibilities. Further, many employers believe their payroll operating costs will go up as a result of adopting on-demand pay. Additionally, the thought of adding yet another niche technology to the employee experience is often undesired.
Despite the misconceptions and apprehension - on-demand pay for earned wage access is now a key component in a modern payroll operating model and employee experience. Organisations continue to realise that the many positive, measurable organisational impacts enabled by offering employees early access to earned wages, far outweigh its limited operational impact.
The realities of adopting earned wage access
Digital payments have quickly become a standard fixture in our personal lives. Mobile apps and access continue to enable increasingly powerful on-demand capabilities, and the pandemic accelerated digital money movement and payments seemingly overnight. Many merchants have even begun declining cash in favor of card or digital payments altogether.
Research and analysis of many of the leading earned wage pay solutions shows that these solutions offer an incredibly low impact activation process, meaning payroll must do very little to launch and operate them. In fact, many practitioners commonly cite the near “set it and forget” experience of enabling and managing modern digital payment solutions.
On-demand pay solutions fundamentally provide payroll with an integrated technology enabled tool to quickly resolve common issues with limited effort and greater speed and efficiency. Issues that require rapid payments such as missed entry or approval of time worked, incorrect or missing direct deposits, same day terminations and compliance driven payments, shipping outages, and more.
Further, the cost models for on-demand pay are very low and, in most cases, the ROI realised offsets any cost of adoption. Interestingly, the ROI realised generally has little if any impact on payroll itself (although it inherently drives up electronic payments), rather it is a benefit that commonly leads to measurable improvements in employee engagement, retention, referrals, and candidate interest. Many firms operating in industries heavily dependent on hourly workers (retailers, quick serve restaurants, home healthcare providers) commonly cite offering on-demand pay for earned wage access as a clear and measurable differentiator over competing employers that do not offer the financial wellness tool.
The role of earned wage access in the employee experience
Now more than ever, employers across sectors are recognising the urgency associated with finding, retaining, and developing top talent. Competing in today’s talent market requires a differentiated employee experience that empowers the employee across their full work-life journeys. Employees want, need, and deserve employers to provide them with the modern flexibility enablers to shape a unique experience that supports and enables them to meet their specific personal and professional goals.
Enabling employees to perform their best work goes beyond the tools and support provided in the workplace and should extend to their personal lives.