Results from a recent Harris Poll show that 72% of responding employees want access to their pay on-demand, while only 6% actually have this access. That 66% gap means the daily pay benefit is on a high-growth curve.
It also means many, many employees are still missing out on this key component of financial stability and wellness, and employers are scrambling to resolve this by partnering with DailyPay.
During our exclusive podcast, The Source by DailyPay, with guest Joyce Maroney, the founder and executive director of The Workforce Institute at Kronos, Inc., we delved into several key issues that the Harris Poll, which was commissioned by the institute, uncovered.
The key statistic in the “Death of the Traditional Paycheck” survey was that nearly three-quarters of the 1,180 adult employees who answered the survey desire to access pay on-demand. Breaking that down by income level, while we expected that nine out of 10 responding workers who earn less than $50,000 a year wanted to have access to their pay daily, it was a bit surprising that more than two-thirds (67%) of those responding making $50,000 or more, also want that ability.
“Although the macro-economy may be booming, plenty of Americans struggle to pay their bills,” Maroney said during the February 12th podcast.
The struggle is so real that the survey results show that 8% of respondents “would consider a $50 fee reasonable to access $50 of their earned wages early – which could signal a desperation among some for safe and reliable access to their own money as an alternative to short-term payday loans,” Maroney said.
This shows how some living pay-to-pay have been conditioned to expect such a fee for getting their own earnings! It’s good that DailyPay has a very reasonable ATM-like maximum fee of $2.99 for almost instant access to earned pay. And that’s it.
Another key statistic from the Workforce Institute data was that 51% of respondents would value having access to their pay on-demand more than additional paid time off! Accounting for more paid time off is extremely costly, but employers can pay nothing or near nothing when partnering with DailyPay to provide employees access to their earned pay.
As for financial wellness, Maroney noted that “three-quarters of employees say they would prefer to work for an employer that offers financial planning, budgeting and automated savings tools over one that does not, including 88% of 35 to 44-year-olds.”
As more employers seek to provide these benefits, one potential barrier to adoption lies in the payroll function, according to Maroney. “Those responsible for payroll operations are reluctant to mess with a solution that’s currently working for their employees,” she said. “Payroll is a delicate balance of process, technology, compliance concerns and employee expectations.” We couldn’t agree more.
Fortunately, employer partners with DailyPay’s solution do not need to adjust normal payroll runs—there is an information interface only and that is separate from the payroll processing that needs to be done. At DailyPay we work hard to ensure employers can continue to run payroll as if there is no daily pay benefit. In fact, they likely will not know an employee has made a draw prior to payday.
DailyPay provides solutions that empower employees to control the timing of their pay and ways they use their earned income, not only to pay unexpected bills, but also to save money early, or invest it, or even use features of the app to rebuild their credit score and more.
Finally, “in a supply-side labor market, employers are looking for ways to enhance the employee experience that will give them an edge,” Maroney said.
As employers embrace implementing employee experience programs to facilitate high engagement from staff, daily pay is an important component of that experience.
Employees also are embracing the ability to see what they have earned throughout the pay cycle, regardless of whether they want to take a draw prior to payday. It’s difficult to manually figure net pay on the fly, but now people can get a good idea of what they have earned simply by accessing the dailypay app, for free.
That knowledge is power.
In addition, employers are noticing fewer missed punches on the timeclock because people want to have a good, ongoing record of what they are earning as they go, even if they do not want or need to transfer any of their earned pay early.
So, is the demise of the paycheck real and happening now? Well, the idea of a fixed payday is breaking down, but in the end, the future will not be void of paydays, but rather full of them.
- Payroll’s Third Wave
- 2020 Industry Trends
- Helping Payroll Understand On-Demand Pay
- Whose Loan Is It, Anyway?
- Employee Experience