The right on-demand pay solution will have a lasting and meaningful impact on a company and its employees. But, as noted in a recent Bloomberg article, (originally titled, “Walmart’s Early Pay Falls Flat as Some Staff Exit,”) the wrong on-demand pay solution will not achieve either a company’s or its employees’ goals.
Research has shown that by changing their employees’ pay experience, companies can maximize efficiency by reducing turnover and decreasing employee absenteeism, while simultaneously increasing productivity and employee satisfaction. If implemented correctly, on-demand pay, sometimes referred to as “earned wage access,” can save employers and employees millions of dollars every year.
But all on-demand pay platforms are not created equal, as Walmart experienced, and this article reveals the consequences of rolling out a program that lacks features that are critical to its success.
Now even though Walmart’s on-demand pay vendor might say financial wellness is ultimately the key, Walmart has clearly come to a different conclusion. It’s all about producing a quality product that is easy to use and meets the needs of the employee and the employer.
Without making excuses.
At DailyPay we know what it takes and have the data from millions of employees across every vertical to back it up.
On-demand pay is not the only benefit you should offer, but to make it work as effectively as it should, we’ve identified the 4 things you need to ensure you have in your gold-standard solution.
1 ) A simple transparent experience for employees
In order for an earned wage access program to be successful, it has to be simple to use with a transparent fee structure. Employees will lose faith in your on-demand pay offering if they find themselves being saddled with hidden fees or confusing pricing structures (e.g., subscriptions with free trials). Once that happens, you lose the benefit of offering a solution that reduces turnover and all of the costs associated with it. The optimal solution is a provider like DailyPay whose fees are transparent and are only charged when employees request an early transfer of their earned pay.
As this Philadelphia Inquirer article pointed out, Walmart employees were confused about what they actually had to pay to use Walmart’s earned wage access program.This resulted in mistrust and wariness about hidden fees and misinformation and confusion about how the program actually worked.
By providing employees with access to up to 100% of their earned pay, DailyPay allows employees to leverage their on-demand pay to budget their money. With other programs, like the Walmart program, employees only have access to view and use 50% of their net earnings each pay period, with a max of one (1) transfer per week and no Sunday access. This likely causes confusion among employees and can result in turnover.
2) 24/7/365 access, with no blackout periods
Emergencies aren’t planned. When an employee needs to access their money, it’s important that they have the reliability of a 24/7 program to do so. A time-restricted program is like a false security blanket that can create additional issues for employees.
For an instant pay solution to be truly beneficial, the employee must be able to receive and use 100% of their funds instantly, 24/7/365, to any account.
Walmart’s Instapay solution is not a 24/7/365 program and users have complained about blackout periods to use the app to get access to their pay, especially over weekends and during the last two weeks of the year, a time when access to their earned pay may be critical for employees.
3) Full-service, enterprise-grade reliability
In order to be successful, an on-demand program must include everything from employee support to employer credit checks to ensure financial stability.
DailyPay’s solution offers a full-service pay experience solution that provides:
- On-demand pay (earned wage access)
- Various savings options, so employees can save money before payday
- Automated tips disbursement
- Automated off-cycle payment tools
- Live multi-channel (phone, email, chat) domestic employee support
- Access to free financial advisors for employees
- Dedicated account managers
Anything less than a full-service solution will necessitate additional time, resources and money to support your on-demand pay program.
4) Ongoing program support
According to the Bloomberg article, 25% of new hires enrolled in Instapay (their on-demand pay program) within the first 60 days. Among those who used the app, if they checked it less often, more than 50% were expected to quit within the first six months. If workers checked the app more often, 30% were expected to quit within six months.
Unlike the Walmart program, DailyPay’s largest partners show turnover improvement; two of our largest partners show improvement of 44.7% and 35.6%, as of January 2021. We also see that our users’ average usage actually decreases over time, which indicates that they are becoming more financially stable.
Providing our clients with these metrics and more helps them to understand how offering DailyPay is helping them to reduce their turnover in a meaningful way, while giving their employees control over the timing of their pay, thereby reducing their financial stress and helping them to be more productive on the job.
So what now?
As referenced in the article, if employees are not offered a simple, transparent pay experience, the impact to the organization is counterproductive to the original intent of the early pay program. By contrast, DailyPay’s PayEx suite of products and services provides an optimal pay experience, which results in better employee experience, with benefits to the employer including higher retention rates and better customer service. It’s an on-demand pay benefit that works as expected.