The Source Episode 7

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Episode Description: Relying solely on old ways of paying employees could now be considered outdated. DailyPay’s The Source podcast reveals lessons learned through this difficult period that urge employers to rethink the way they pay their workforce. Join DailyPay CEO, Jason Lee, and ADP Vice President, Future of Pay and Payment Solutions, Jeff Gies, as they discuss the complexity of pay and the increased need for simple, flexible and compliant solutions.

About Our Speakers

Jeff Gies

As Vice President of the Future of Pay and Payment Solutions at ADP, Jeff has responsibility for developing and driving the growth of ADP’s Compliance Solutions Future of Pay division. Jeff has held various Sales and Leadership positions within ADP’s Compliance Solutions, GES and Major Accounts divisions accumulating over 18 years of service. Jeff has assisted in the launching of 3 different service offerings for Compliance Solutions over the past eight years, including Medium Enterprise Compliance, Research and Development Tax Credits and The Future of Pay.

Jason Lee

Jason Lee is CEO and co-founder of DailyPay, a venture backed financial technology company that enables employees to access their wages before payday. DailyPay partners with large enterprises to offer its technology solution to their workforces, which results in a meaningful reduction in turnover and related cost savings. Every Saturday morning, Jason enjoys spending his time at the Father’s Soup Kitchen, helping serve hot breakfast to New York’s homeless population.

Michael Baer, Host

Michael was formerly the managing editor overseeing domestic and international payroll information with Bloomberg Tax, previously BNA. He has spent the better part of three decades covering payroll and HR issues. Michael initially gained his experience in payroll and human resources with Marriott, and later was the personnel manager for the Shanghai Hilton. He lives with his wife and children in Alexandria, Virginia.

In this podcast you will learn about…

  • How and why payroll delivery applications are catching up to other commercial instant and contactless transaction mechanisms
  • Why employer plans to gradually adopt new advances in payroll technology have been accelerated 
  • Why changing the experience of employee pay to be more sensitive to employee needs is more important than ever
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Thanks for tuning in!

Podcast Transcript:

Speaker 1:

Welcome to The Source, the definitive destination for timely and informative regulatory updates and issues in the on-demand pay industry. The Source is brought to you by DailyPay, the industry leading provider of the daily pay benefit and pay experience.

Speaker 1:

This material is for general information only. And the views expressed herein reflect only the views of the participants. This program should be considered marketing material and should not be relied on as legal, tax, accounting or regulatory advice. And now, let’s welcome our host, Michael Baer.

Michael Baer:

Hello everyone, and welcome to The Source. The Source is sponsored by DailyPay and provides insights into active and upcoming legislation impacting the on-demand pay industry. And with special guests, we help clarify issues surrounding early access to pay and the pay experience.

Michael Baer:

Today, after we dive into some new developments in this arena on the legislative side, we’re going to have a power pack discussion on how companies are rethinking employee pay with a couple of icons in the pay community. Jeff Gies, vice president Future Pay and Payment Solutions at ADP and Jason Lee, CEO of DailyPay, the fastest growing leader in providing on-demand pay access for workers and financial security tools.

Michael Baer:

First, leading the news this month is an exciting development occurring amid the economic shutdown in New York. On April 15th, state Senator Brian Benjamin introduced Senate bill 8206, which would regulate on-demand pay services in the State of New York.

Michael Baer:

The bill would enable employers to freely offer enterprise on-demand pay and would confirm the right of employees to be paid daily through such benefits offered by their employers. It also draws a clear line in defining the plethora of Neo payday lenders that are out there online. It defines them as non-verified, non-enterprise direct-to-consumer providers that are providing credit or loans.

Michael Baer:

So, legitimate, compliant, on-demand providers like DailyPay fall under a new category as employer integrated providers have on-demand pay solutions. Under this legislation, providers would have to register and be subject to regulatory guardrails that protect consumer rights and set industry practice standards. A registration process for legitimate employer integrated providers will be required under the bill’s language.

Michael Baer:

And some of the protective provisions would include first that the provider has a contractual relationship with the employer. That income is verified. That there will be transparency in any fees charged with no kickbacks to employers for choosing a particular provider. The bill would require that worker privacy is protected and that annual reports with financial information would be filed and could include user complaints and how they were resolved.

Michael Baer:

The bill is remarkable in that, with the interruption of normal operations and the focus of states now being on, of course, the health of their residents first and the economy, there really has been little activity in this on-demand space. I want to ask you Jason Lee, DailyPay CEO, as long as we have you here, what is your take on this new development in New York?

Jason Lee:

Well, thanks Michael for having me here on The Source. I think, if you couldn’t hear, we are all doing this from home. And certainly you probably will hear my two screaming children, my barking dog, the ringing doorbell or any version of Baby Shark, Apples and Bananas or Wheels on the Bus. So at some point you probably will hear that in the background.

Jason Lee:

But I appreciate you, Michael, continue to power on here. I know that your listeners are dying to hear what’s new in the pay experience, on-demand pay, all of these wonderful things that, believe it or not, are now front and center in the environment that we are in. Obviously, I don’t need to tell anyone who’s listening to The Source today that this topic of just pay generally, but rather the experience with which one interacts with one’s pay has really become front and center as part of the dialogue.

Jason Lee:

You can’t open the newspaper today without reading an article about hero pay, or bonus pay, or a pay increase, or pay flexibility, or contactless pay through pay cards. This is a topic that is front and center not only in the minds of folks who do what we do, in human resources, payroll finance, but really corporate America and the overall workforce at large.

Jason Lee:

This has become part of today’s zeitgeist, which is right next to the things that we are hearing about right alongside the health crisis that we’re in. Also, I wanted to say just on a personal note, Jeff Gies, I appreciate you joining here. We know that you’re super busy and just, candidly, if you’d asked me three or four years ago, “Did I think that I’d ever be doing a podcast with one of the senior leaders at ADP when we first started embarking on this journey?” I would say, “You’re crazy. “

Jason Lee:

And certainly if you ever asked me, “Did you think you’d do the podcast from your basement during a health crisis?” Of course, I would have said, “No, no. No, you’re really crazy.” But Jeff, I appreciate very much you taking a few minutes here to spend on the podcast with me.

Jeff Gies:

Yeah. I’m happy to be here. I’m excited to spend a little bit of time with you guys and the viewers out there.

Jason Lee:

Awesome. So Michael, you had asked about this initiative or this bill that Senator Benjamin has put or has rather promulgated and proposed through the Senate. There’s also a companion bill that’s already made its way through the assembly. And look, I’ll just maybe share a few thoughts on that.

Jason Lee:

The first is, way to go Senator Benjamin. Senator Benjamin is a super smart, highly progressive leader from, I believe he’s in the Harlem District here in New York City, if I’m not mistaken. And one of the things that I know probably ran through his mind as well as his office’s mind was, “Gosh, what can we do today to really create a framework to just help people? We should do what government’s supposed to do and go out and provide some clarity on the regulatory front really just to help folks, help my constituents, help people who could be living, in fact, paycheck to paycheck.”

Jason Lee:

And certainly, we’re seeing what the senator is doing. And we really do applaud the framework that he’s put forward. In summary, I would say, if you read the bill or perhaps just listen to my summary, it really is the gold standard. What the Senator has done a lot of good work in investigating and really understanding all of the different models out there.

Jason Lee:

And what he’s said is, “Look, the gold standard in this business, if we want to be able to provide access to DailyPay to employees, it’s real simple. You give them the money and you don’t ask for it back. You give them the money and use technology to make sure there are no wage deductions.” I think that’s a huge issue, of course, in New York where there are things like wage deductions. That’s already a practice that’s prohibited in New York State under the Wage and Hour Laws.

Jason Lee:

And so, Senator Benjamin just came out and said, “Look, we can’t have that. We can’t have folks receiving money on one day and then having it taken out of their paychecks on another day.” This model corroborates no debiting of consumer bank accounts. Gosh, we don’t want to give money out to employees and then have some third party vendor go in there and take the money back out as part of a debiting thing. Gosh, we want to outlaw that. That’s not the way to treat people. That’s not the way to treat hardworking Americans.

Jason Lee:

And one of the reasons why I’m so excited that Jeff is on this call is because, all of this can be taken place behind the scenes. The goal of companies like ours and Jeff’s is literally to disappear. It’s all about our clients and it’s all about how do we leverage technology to ensure that folks can be compliant, but it all happens behind the scenes. No going into the consumer’s bank account, no making payroll process of payroll deduction, let the technology do all of that behind the scenes.

Jason Lee:

And that’s really what the senator is proposing is, “Hey, this is really how this industry should evolve.” So, we’re excited about it obviously. And he’s done a great job on this, New York. Jeff and I are a little biased here. We love the New York Yankees, we love Times Square, so we’re New Yorkers at heart. And so, we do think that New York is the financial capital of the world. And so, it’s super exciting to see a New York legislative effort here, folks who really understand how this stuff works. And we expect that this will become the model adopted nationwide.

Michael Baer:

That’s right. And New York has been this bellwether, was the first, I believe, to come up with a Wage Theft Law a few years back and then several states have now followed suit. So, we’re looking at this legislation as possibly being a model for others nationwide, like you said.

Jason Lee:

Yeah, it’s really a watershed moment. I mean, I know that a lot of your listeners, they have been asking for corroborating or confirming legislation, and this is a really watershed moment. And we feel great about it. It really does bless and corroborate all the work that folks like ourselves, our teams here, Jeff’s team at ADP and all the rest have been doing in this space. So, it’s really great work. We’re super excited about it. A bright spot here as we’re all at home.

Michael Baer:

Right. And it’s interesting that it happened all during this pandemic time. Well, I want to thank you so much, Jason Lee, for your insight on the significance here of this New York Bill clearly is. But let’s move on to the topic of the day. And what I’d like to moderate is this discussion between you, Jason, and our special guest, Jeff Gies. He’s the vice president for Future Pay and Payment Solutions at ADP LLC.

Michael Baer:

Many people think they know who ADP is or what ADP does. And in my many years, maybe I know Jason knows, my many years doing and covering payroll issues, I’ve seen ADP as a company that continues to evolve. And becoming a comprehensive global provider of cloud-based human capital management solutions that unite HR, payroll, talent, time, tax and benefits administration under one umbrella.

Michael Baer:

They are a leader in business outsourcing solutions and compliance expertise. And you may have heard about a little thing that ADP does each month, and it just came out not too long ago for this month called the National Employment Report that is picked up by all the major media and is timed with Labor Department Employment Releases.

Michael Baer:

And I also want to say, being a member of the DailyPay team, I am very happy to point out that DailyPay has a strategic partnership with ADP and is a part of ADP’s marketplace. Jeff, I want to thank you for being so patient while I describe the ADP business and I hope I did it correctly. It’s a pleasure having you here with our CEO.

Jeff Gies:

Yeah, thanks again Mike and Jason for having me. And I think you did a great job of describing ADP. The only thing I might add is, while we continue to drive innovations and benefits to the employer, we’re also hyper-focused on what are the benefits we deliver to the employees of our clients? And that’s really when it comes to pay. And some of the innovations we’ve come out lately, we’re really starting to focus on impacting in a positive way, the lives of the employees that of our clients that use our services. And I know you guys are as well.

Michael Baer:

Right. I mean, that’s our focus as well. So, why don’t we get started. A question for each of you. As companies re-emerge from the general set down, a lot will not be the same as before. I mean, that goes without saying almost. On the employee payments side, what do you think companies will be changing or have had to change during this difficult period? Jeff, you want to start?

Jeff Gies:

Sure. I’ll take a shot at this. So, pre-COVID, for a lot of the trends that were out there in the industry, more and more organizations were re-evaluating pay, moving toward more of electronic or digital pay, speeding up the pace that people get paid at. And while that will still be here pre-COVID, we’ve added some additional burdens on employers. I think the main thing we’re seeing right now is employers realize that any reliance on paper checks or paper documents at all is no longer a reliable way to get payout, whether it be difficulties with shipping.

Jeff Gies:

But really post-COVID, what we see is organizations really focused on what I would say the physical wellness of their employees are. And so, they don’t want to have high touch surfaces such as a paper check to give to an employee or have an employee come into an office to pick up pay. They really want to start to leverage more of the technology that’s out there to deliver digital pay. But at the same time, you think about getting a paper check as being a high touch service. What does an employee do with it once they get that check and all the high touch surfaces that go into our high density locations to go cash that and use that out in society today?

Jeff Gies:

And so, I think the focus on electronic pay has been sped up, but at the same time, as I’m sure we’re going to get into, you can’t just say we’re going to go electronic pay, you can’t just say we’re going to add all this choice. You’ve got to be concerned with not only what compliance rules and regulations are out there, but really what’s the impact on your employees? Are they prepared to make a shift from a use of cash into this digital environment? What tools and how can employers help people make that transition?

Jeff Gies:

And so, that’s a lot to throw on companies when it relates to pay, considering they’re still having to hire back furloughed employees and reopen operations and all of that. So, that’s what we’re seeing now, and that’s really what people are coming to ADP right now to help with.

Michael Baer:

Right. And I also see that companies are being a little bit looser in some of these practices during this time as well. And I know an organization like ADP will help keep them grounded, so to speak, during this uncertain time. And Jason, what are your observations on the transformation going on, on these employers paying differently?

Jason Lee:

Look, I think this is an unprecedented, once-in-a-generation thing that’s happened. I think people will look at life pre and post. This is just one of those events where HR, and payroll, and finance have had to think through sets of challenges they’ve never thought through before in their professional careers. And so, I guess the one observation that I would make, and Jeff’s gone through a number of very specific things.

Jason Lee:

I’d maybe just helicopter up and say, what you thought was transformative is now being accelerated. Meaning, we’ve all talked about the world of, hey look, there’s going to be digital transformation that occurs across many different processes. Well, in many ways, and Jeff referenced it. While there aren’t aspects of the pay process that are in fact digital, there are equal number that are still analog, that are still very, very manual in nature.

Jason Lee:

And I think what’s going to happen is, you have an event like this and all of a sudden, change will be accelerated. We’re not looking at a five year plan for transformation. We’re looking at now, how do I change now, today? I’m sure many of us who are listening probably saw this, but we, at DailyPay, we work with a number of different healthcare organizations, hospitals, we work with HCA Healthcare, it’s the largest hospital network in the country with 200,000 employees.

Jason Lee:

One of the things that’s been interesting to me is, if you look at all of these big networks, all of them probably had three to five year plans on telehealth. Gosh, there was going to be a procurement period, there was going to be a testing period, a rollout period. And after five years, we’re going to have tele-health.

Jason Lee:

Well, when COVID hit, tele-health started in a month. Companies, they took that transformation plan and they accelerated it. And I think that’s really what’s going to come out of this, which is, massive moments of acceleration, where we take these transformation plans and we prioritize them and just move. And I think that a number of the items that Jeff is mentioning, they’re going to be part of that.

Michael Baer:

Yeah. And thank you for that, Jason. So, what were some of these things that were happening, it seems like a long time ago now? But what were those factors that were already in place that were precipitating the changes we’re seeing now? Jeff, do you want to comment on that one?

Jeff Gies:

Yeah. This whole world of pay has been crazy. And it’s funny, years ago, we would think about pay or we’d think about changes in this payroll world as taking years and years and years, but really in a very short period of time, we had a bunch of factors that came together pre-COVID that were impacted.

Jeff Gies:

And of those is the next gen workers. So, as we look at the shift away from the baby boomers and traditionalist into your gen Z and your millennials, that was making a big impact on how employers hire these individuals, retain these individuals, attracted these individuals. And so, that was a big shift.

Jeff Gies:

Some organizations that didn’t have those capabilities were going to fall behind with that. So, that was putting technology if you think about, someone told me the other day, your phone is the insight into your life. You can pick up anyone’s iPhone and see what apps they have and see what hobbies and if they travel and what they do. So, everything’s being done on the phone.

Jeff Gies:

And so, that technology shift, the need to go mobile, these younger generations with different expectations around how they receive and use their pay, companies were already having to deal with that. And what’s been interesting about all of that is that, this younger generation actually values pay choice and pay flexibility sometimes [inaudible 00:20:40].

Jeff Gies:

So, if you’re an organization that wants to be cutting edge and wants to recruit well and retain this younger generation, if you weren’t looking at some flexibility and options in the pay cycle, you were going to fall behind. And so, all of that was going on pre-COVID and even post COVID. While we mentioned some of the things are going to happen post-COVID, that trend hasn’t changed and it’s still going to be present for all organizations.

Michael Baer:

Right. Jason, do you have any comments on the pre-COVID transformation that was already happening and this acceleration that’s going on? Like you mentioned change is…

Jason Lee:

Yeah, I think Jeff hit the major points around the big macro trends that were occurring. I think the only thing I would add is, when there is a disconnect between what one can experience as a consumer in your personal life with what one has to undergo in your professional life as an employee, there’s a problem there.

Jason Lee:

Unfortunately some of us here, we spend, what is it, maybe three fourths, maybe even more of our time at work. And even during this pandemic, we’re all working from home. But the reality is, if you think about life in an office, goodness sake, we take an Uber to work, we maybe afforded our food on an app, we have all these conveniences that are afforded to us via our mobile phones.

Jason Lee:

And then you get to work and you stand by the printer for 22 minutes because the printer doesn’t work. There’s a major disconnect that’s occurring between the technology and the interoperability that we can experience in our personal lives versus what we’re getting in the professional context. And this is not to criticize what’s going on with IT or things of that nature. But it’s more to say, consumers are consumers and they expect consumer activity in their place of work.

Jeff Gies:

Yeah, Jason, that’s a great point. If you think about, in our consumer lives, there’s a major grocery store chain that didn’t have Apple Pay and there are consumers who came in and said, “We need to have a touchless method to pay.” And so, because of COVID, they added those features. But then think about that same person who demands that their grocery store let them do a touchless pay option, but then maybe they’re getting a paper statement mailed to them from their company, whether it’s a [inaudible 00:23:19] and go touchless out in society. But my company’s handing me a paper document that I got to do something with. That’s an example of that disconnect that we see out here.

Jason Lee:

And arguably that’s much more important. I was sharing with a friend of mine yesterday. I said, “My goodness, we have digitized many more things that are much more trivial than what we actually, really should be digitizing,” Which is the experience we have with our pay at the employer.

Jason Lee:

We’ve figured out how to digitize dog-walking. And we figured out how to digitize dry cleaning. And look, those are, I’m being a little bit tongue and cheek. Those are of course, very important things to bring digital transformation to, but please one would have to agree that the experience that one has with pay is just a lot more important.

Jeff Gies:

Absolutely.

Michael Baer:

So, do you both, I have to throw this in here. Do you both think that maybe on the pay side, employee pay side, that maybe the applications have been a little bit behind and they’re now catching up?

Jason Lee:

Well, look, Michael, I would say for good reason. I mean, certainly it’s easy for me and Jeff to throw potshots and throw stones at, “My goodness, why haven’t these processes modernized?” That’s easy for us to say. But really I think for good reason. Pay, and Jeff I’m sure would say the same thing, this is a very sensitive topic. You got to get it right. There is no room for error.

Jason Lee:

This is not the time to say, “Hey, let’s work with an untested startup to try to roll out pay or do things like introducing a brand new pay card platform or a payments app app or payroll system. I mean, as you know, Michael, when you get things wrong with pay, it’s one of the very few things that even the board of directors can go to jail for.

Jason Lee:

And so, for good reason, we’ve handled this with kid gloves. One of the things that I’m seeing in our client dialogue, and I think we’re doing this podcast recording on May 7th, so we’re in the heart of it here, but one of the things that I’m certainly seeing is every single client is coming and saying, “My goodness, there’s a flight-to-quality, meaning we just can’t take the risk of working with an untested product or an untested provider. We want to work with the ADPs of the world, the DailyPays of the world because those are the gold standard.

Jason Lee:

And there’s a real focus on this. So, to answer your question, obviously this thing should have modernized a lot quicker, but to get it right, it actually takes some time. It takes some engineering, it takes some practice. We’ve been at this with ADP many, many, many cycles of figuring out exactly how to protect and empower our clients to be able to offer a compliant product. So, this is not something that you can do fly by night.

Michael Baer:

Yeah. I didn’t mean to over-simplify.

Jason Lee:

No, no. But it’s-

Michael Baer:

There’s a lot of complexity than a dog walker app.

Jason Lee:

But it’s a good question because we always get it. “Oh my goodness, why hasn’t this happened before?” And I think the answer is because it takes time. It took time and you have to get it right because it’s just too important.

Michael Baer:

Well.

Jeff Gies:

Yeah, I think the other thing is, it’s very difficult for an employee who hasn’t really entered this digital space to all of a sudden jump in the middle of it and order groceries that are delivered, and use Uber, and have all these apps on their phone and all of a sudden their entire life went from their wallet in their pocket onto a phone to do everything.

Jeff Gies:

And what I love about our partnership is, I feel like both our organizations are not only focused on service to the employer and providing user experience and a support structure that helps those individuals make that transition into the digital world easier. Because you can’t just throw it at them and expect they’re going to learn this, you’ve got to have simple, easy-to-use tools with almost a white glove service behind it to make sure that they can take advantage of what you’re offering them.

Jeff Gies:

And what I see in our partnership is, your service model and our service model when it comes to that match up very well. And so, we’re able to offer this best-of-breed partnership and we can be assured that both sides are doing everything they can to service the employee to COVID slowdown to help employers and employees make that transition.

Michael Baer:

Absolutely. And I think, yes, it’s uncomfortable to make this transition. A lot of employees are going through it right now. And this is a fantastic approach that I’m seeing here from both of these organizations. I think another issue that needs to be addressed, and both of you touched on it earlier, is the increasing desire for employee pay applications that are safe and secure and compliant. I mean, that’s one of the key issues that makes it uncomfortable to going to non-contactless pay, so to speak. Jeff, can you elaborate on that?

Jeff Gies:

Yeah. I’d be glad to that. We talked about this risk to the employee. I’ve hit on it a couple of times, but now let’s talk about that risk to the employer. And I touched on it briefly. Employers want to make this transition. They want to make it quickly, but every single state has now come out with their own pay requirements and pay laws.

Jeff Gies:

And so, I would equate it back to employment tax. The reason people don’t want to do their employment tax is because every state’s different and has different regulations. And if I’m a multi-state employer, I keep the states [inaudible 00:29:10]. It’s different when you think about pay. All 50 states have different pay requirements. Some are more onerous than other ones, but what’s important to our clients is when we come in and help them make a transition to electronic pay, we want to have a 50 state compliant offer.

Jeff Gies:

And when we partner with DailyPay, what we loved about that partnership is you have the same compliance offering in all 50 states. And so, our clients expect that if ADP is delivering 50 state compliance, that a partner of ours is going to deliver the same compliance model in all the 50 states.

Jeff Gies:

So, Jason [inaudible 00:29:46] really ramped up this partnership and got it going. And when we found that we married up very well there, it was a clear choice for us to partner with the DailyPay because we had the same compliance model. And certainly the protection of employee data and all of that. We’re both the gold standard for how we protect that data and keep it secure, have redundant systems to make sure it’s always available, that we always do that.

Jeff Gies:

But again, I think it’s that 50 state clean compliance model that makes this partnership best of breed.

Michael Baer:

Oh, that’s fantastic. And Jason, what are your thoughts on ensuring pay applications are safe, secure, and compliant?

Jason Lee:

Well, look, this gets back to something Jeff referenced, which is, number one, you got to go gold standard because it’s just not worth it. You just can’t take the risk. And frankly, any practitioner who is doing their work on this, frankly bigger is better in a lot of these cases. Because you just can’t take any risk on any type of data security issue when it comes to your pay.

Jason Lee:

Said differently, I’m glad that we’re an ADP customer. I know our data is protected. That makes me feel good. And so, the reality is this is one of those things you should never have to think about. As I said before, Jeff and me, our job is to fade out into the background. Our job is to empower, enable, put the employer at the center, it’s never about us, it’s really you put the employer at the center and to enable them.

Jason Lee:

And frankly, the less you hear from us, the better in many respects. I think as it relates, though, to the employee herself, Michael you’d be surprised the amount of familiarity that today’s employee has with handheld financial applications. I bet if you actually went to 10 workers, seven or eight out of them would tell you, “Wait, this doesn’t exist already?” Meaning, I think that the workforce is evolving so quickly that there’s an expectation that employers do offer this.

Jason Lee:

Every time that I’m in the field, and I’m sure Jeff has the same experience, folks will say, “Yeah, this is so frustrating. This is a disconnect that has to get resolved. Wait, before I answer your question, give me one second. Let me just Venmo my friend eight dollars for this pizza slice.” And then they say, “Wait, no, what are you talking about for biweekly pay?” And so, there’s this massive disconnect.

Jason Lee:

And look, granted it’s not universal. The boomers and the gen X, they are still admittedly about 30% of the workforce, but goodness sake, 7 out of 10, and certainly by 2022 a lot more, this is table stakes. It is absolutely table stakes. And what makes this even more acute is, of course, in this COVID environment, a lot of these folks not only expect it, in perfect candor they need it. They actually need it right now. And that’s really what is driving so much in this acceleration.

Michael Baer:

Yeah. Well, thanks. Thank you both for your comments on that one. One final question for both of you, and it’s related to just what you were talking about. Is that, during this economic shutdown, I mean, the government, as well as many employers really put themselves out to ensure workers had some sense of financial security that we had paycheck protection program, the stimulus checks, require paid sick leave, extra dollars for unemployment. All that to try to keep people whole or close to whole financially.

Michael Baer:

And financial wellness has been and continues to be cornerstones of both of your companies’ employee payment programs. So, Jeff and Jason, now that more and more people are going back to work, what additional focus on employee financial health do you see employers having or needing to have to be successful?

Jeff Gies:

Yeah, that’s a great question. I didn’t mention that as a need pre-COVID, but it’s certainly a need post-COVID. And I think about [inaudible 00:34:23] right? I would have stocked up on what toilet paper and wipes and hand sanitizer.

Jason Lee:

Was that you, Jeff? Was that you I saw at that Costco?

Jeff Gies:

Yeah. And so, if you think about an employee, what would an employee have done differently? Right? Maybe wanted to save more, or spend less, or earn more, or whatever those things may be. And so, this concept of financial wellness for us, and I know this is a focus of DailyPay as well is, we want to focus on clean, easy steps to improve the financial life of an employee.

Jeff Gies:

So, what does that mean? Well, first [inaudible 00:35:00] pay, right? Save them on check cashing fees or banking fees, or bill paid fees, whatever it may be, or we can give them access to emergency funds so they can avoid late payments or going to payday loan lenders. It’s all focused on putting more money into their pocket.

Jeff Gies:

But if we stopped there and somebody had poor financial habits, that money would dissipate, wouldn’t go to anything that really impacted their lives. So, it’s not enough just to save them the money, we then want to help them focus on where are you spending, and what type of budgets are you using, and what are some clean, easy tools that we can provide you to help have some visibility.

Jeff Gies:

Then able to do that, you made more, you spend less. And now if we can give them some clean, easy savings tools that don’t have the same regulations that maybe a traditional savings account would have. Now we’ve helped them save for a rainy day or we’ve helped them set aside payments for rent. And so, if you think about what ADP and DailyPay provide, we’re able to do all of those things.

Jeff Gies:

We put a significant amount of money back in the pocket of the employee, hard dollars that they’re spending out in the world in their pocket. We help them spend it in a more responsible way. We provide things [inaudible 00:36:16]. We help them avoid high cost lenders by giving them access to this.

Jeff Gies:

And if we’re able to do all of that, and you just think about those simple steps, that really improves someone’s financial life. And what I see employers missing in this financial wellness area is, they focus on health savings plans and 401k plans. And those are great, but if you’re living paycheck to paycheck, you need that core foundation of financial wellness so that, hopefully, you can get your life to a point where you can then take on some of those more advanced areas of financial wellness.

Jason Lee:

Yeah. Look, I couldn’t agree more with what Jeff’s saying here. And unfortunately, to use a terrible analogy and an untimely one, but a good one, nonetheless. If you go to the hospital, there are certain, just because you go to the hospital, it doesn’t mean that every floor is the same. You’ve got the emergency room on the bottom floor. By the way, that’s why the ER is on the bottom floor. It’s because you need immediate access to it.

Jason Lee:

Maybe the second floor is surgery. Third floor is postop. Fourth floor might be, it might be diet and exercise. But you would agree that not every person who goes to the hospital is going for the same thing. And one of the points that Jeff’s making here is, for so many Americans, they’re actually at the ER stage. They would love to get to diet and exercise.

Jason Lee:

But can you imagine if you walked in and your leg was chopped off and someone said, “I’ve got a great solution for you. You have to actually do the keto diet and go run five miles a day.” It’s nonsensical. It’s not sensible to offer someone that advice. What is incredibly important is to get the diagnosis right. And right now the diagnosis for many Americans pre-COVID, but certainly a lot more post-COVID is, “Hey, simple, real life, easy ways to put more money back into the pocket.”

Jason Lee:

I’ve looked at probably, and this is no exaggeration, probably a hundred to 200 different financial wellness platforms. And I got to tell you the best one I’ve ever seen is actually the ADP Wisely platform. And the hallmark of this platform is it’s easy. Easy, easy, easy. Simple, easy. And most importantly, it ties to the pay.

Jason Lee:

The way our brains work, our brains do not work in the sense of, “Ooh, I’m going to save now, I’m going to spend now, I’m going to buy…” That’s actually not how our brains work. It all happens in one motion. Do you ever wonder why it is that, “Gosh, I just realized that I need to go buy that thing.” Even though you might be in the car dealership and you say, “Ooh, I actually need a new broom for my garage.”

Jason Lee:

It’s because your brain says, “I’m in the car.” If the car is going to the garage, “Ooh, I need that new broom.” And that’s the way the brain works. And so, what I absolutely love about the Wisely platform is, it’s all connected, meaning I’m getting my pay. And as I’m getting my pay, I’m thinking about my savings. And as I’m thinking about my savings, ooh, I want to make sure I do that last minute budgeting. And that integrated approach, that’s how real life works. That’s real life.

Jason Lee:

And the value of financial wellness is to get it to work within your real life. Every person who’s on this podcast listening has a graveyard of really good initiatives and really good benefits they’ve rolled out that never worked. I think we’ve all had those things where we rolled out a new program. In theory, we thought it would work and it didn’t work. We all have a graveyard full of those things.

Jason Lee:

If you’ve spent any time in HR or payroll, I think one of the lessons that I’ve learned or observations that I’ve had on this whole financial wellness thing is, it has to be easy and native. And in a way, you have to connect it to the pay. That sounds weird. Hey, why would you connect your pay to your savings? But that’s actually how it is most effective.

Michael Baer:

Well, that’s great. Thank you so much for both of your observations on this transformation that is accelerating. And we’re going to see a whole new world coming out of this lockdown. So, this has been great, gentlemen. Jeff and Jason, thank you so much for joining me on The Source.

Michael Baer:

And listeners, thank you. I thank you for joining us today on The Source where DailyPay provides information and analysis of developments related to pay experiences. So, stay healthy and safe and keep an eye out on your emails as we will have another compelling issue along with updates next month. Thank you again.

Jason Lee:

Thank you, Michael.

Jeff Gies:

Thanks guys.

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