As employers struggle to provide the right mix of pay and benefits that will allow them to recruit more effectively and keep the talent they have, they are recognizing that “still, more than half of our workers living paycheck-to-paycheck,” said ADP Vice President for Strategy and Thought Leadership George Mavrantzas.
Speaking during a recent Source by DailyPay podcast, Mavrantzas said that “we know this humongous financial wellness concern” is mixed into the equation for keeping and attracting new talent. To differentiate themselves, “employers are trying to meet those demands through innovative payment platforms,” he said.
Setting up the need to update employee payment mechanisms is “this dynamic shift in the workforce composition, this continued consumerization of payments,” that includes the introduction of mobile digital wallets, Mavrantzas said.
According to Mavrantzas, nine to 10 million people in the generations just entering the workforce don’t have bank accounts, and surprisingly, he discovered, “it wasn’t because they couldn’t get one, it’s because they didn’t want one. We found that they were less tethered to relics of the past like brick and mortar financial institutions and paper checks.”
In addition, new employer payment mechanisms “really fit well into this era of COVID where we talk about contactless payments, contactless receipts,” Mavrantzas said.
“The data that we are receiving really highlights some of these technological demands our younger generations are putting on the market, that is, around speed, access, convenience,” Mavrantzas said.
But simply providing a more frictionless way to make payments is not enough.
“When we look at these technological advancements, we [at ADP] really have to ask that one big question. Is it secure and does it work? Is it going through all the data integrity testing, proof of concept, all the different things that you need to know is going to work with such a high sense-of-urgency application. We’re dealing with people’s hard-earned wages so we have to have a high-level of urgency, up time on the system,” he said.
Along with securing the data, employers and providers need to be compliant, Mavrantzas said. As with any “involvement with payroll, if you’re not talking about compliance as well, how do you mitigate the compliance within the technology as well? And, from a payments’ perspective, you’ve got a variety of overlapping banking regulations, federal, and then you’ve got 50 states to deal with. So you really have to work with a partner that has the system and has the agility to move quickly,” he said.
Mavrantzas added that with his company, “we’re not just providing a replacement to direct deposit or a replacement to a paper check. We’re offering a program that is fully robust and more functional than your normal credit union and bank software, which allows you to take advantage of rewards and savings envelopes, and have the ability to do on-demand pay.”
Regarding on-demand pay solutions, which DailyPay specializes in and is an ADP Marketplace partner, Mavrantzas said “with the introduction of these financial wellness tools, like on-demand pay, we can get in front of that, help employees bridge that gap. That way, they can spend more time at work … I think that’s one of the key parameters that we’re looking at in terms of keeping employees happy, keeping them more productive, especially in the unstable state we’re in today.”
DailyPay is building technology and the mindset to reimagine the way money moves, from the moment work starts. DailyPay’s pay experience goes beyond compliance and flexibility. Through the DailyPay BalanceTM, the technology seamlessly integrates with a variety of pay systems to continuously and accurately track earnings, makes them accessible and accounts for the amounts, so the payroll team doesn’t have to take any action.
For additional resources on this topic, see:
- Employees Rising: Connecting HCM Growth and On-Demand Pay
- Earned Wage Access 2021: Retention and Hiring Impact
- Employee Financial Wellness: Why Employers Should Make It Their Top Priority
- How Full-Service On-Demand Pay Works for Our Payroll Team
- Aite-Novarica Group Research Finds that DailyPay is a Payday Loan Killer and Overdraft Eliminator
- White-Label On-Demand Pay for HCM and Payroll Companies is Now Possible With DailyPay ExtendPX