Hiring hourly employees seems like a simple endeavor. Put out a Help Wanted sign, maybe an ad on Craigslist, and let the candidates come pouring in.
THE COSTS OF ABSENTEEISM
Employee absenteeism isn’t cheap. According to a study done by Circadian, absenteeism among hourly workers costs $2,660 per employee per year. For companies employing 500 hourly workers, that amounts to $1,330,000 per year in direct absenteeism costs.
Payroll schedules need to toe the line between appeasing employees and doing what’s right for your company’s bottom line.
The more frequently you run payroll at your organization, the more strain you place on your operations team. Higher frequency payroll is also more expensive to maintain. Reduced payroll frequency, however, interferes with employee happiness, which can cost a significant amount in lost productivity and engagement over the long run.
So, what’s the right balance? How do weekly and biweekly pay schedules compare from an employer and employee perspective?
Or … is an on-demand pay benefit really the best of both worlds for employers and employees because employees can be paid daily while the employer runs payroll biweekly or even less frequentlyREAD MORE
The pros and cons of a weekly pay schedule
Builds trust with employees and improves morale: Are you looking for a way to improve employee morale? Paying them more often might be an incentive to improve attendance rates and increase productivity.
Flows better with hourly pay structure: Hourly employees may have inconsistent weekly work schedules that can include overtime. Weekly pay matches this inconsistent flow of work. If an employee works overtime one week and less than full time the next, then weekly payroll ensures that the company pays the employee’s overtime faster.
It’s easy to get into a payroll flow: With weekly payroll, you can be more organized. There is no confusion about when time cards need to be in or when payroll needs to be completed. You simply choose a particular day of the week and stick to it week in and week out. This goes a long way to ensure that the task is completed, without deviation.
Expensive for businesses: Weekly checks are not financially smart for small businesses. According to NFIB, individual deposit fees range from about $1.50 to $1.90 per deposit, on average. If you are a mid- to large-sized business, these fees add up quickly.
Time-consuming for businesses: Payroll administration needs to account for more than just the weekly payments provided to employees. It also includes the following:
- Wage garnishments
- Pay raises and pay cuts
- Sick pay
- Paid time off
- Other compensation-related issues
It’s time-consuming to track all of these items down. The more often you pay your employees, the less time you have for necessary administrative duties.
The pros and cons of a biweekly pay schedule
Saves time: Paying employees biweekly instead of weekly requires an employer to process payroll only once every two weeks which reduces time spent on payroll processing and the likelihood of payroll errors, which can be equally time-consuming.
Simplifies Reconciliation: A weekly payroll means employees might not get around to cashing paper checks in a timely manner and tracking live outstanding checks can be a burden for payroll. A more frequent payroll can also make it more difficult to account for taxes so distributing taxes over a longer period lowers the possibility of paying the IRS for mistakes.
Saves money: If you use a payroll vendor, it’s likely they charge for each payroll run. If you have dozens of employees on weekly schedules, these fees can add up. Depending on the number of employees that still receive paper checks, payroll costs could also be significantly lower with biweekly pay.
Your employees are paid less frequently: Payroll is closely associated with the morale of the workplace. The more often employees see the fruits of their labor, the higher morale may be. Paying employees more often may also help alleviate financial burdens for employees.
So, what is the happy medium?
As you can see, there is a great divide. Biweekly is more convenient for employers because of the costs and time associated with running payroll. And, weekly pay tends to be more beneficial for employees who want their money as soon as they earn it.
But what if a company could offer biweekly pay, and still allow their employees to be paid as often as they’d like?Consider offering an on-demand pay option, such as the one DailyPay offers, that allows your employees to be paid whenever they want, without having to change your payroll processes and without adding additional administrative burden to your payroll team!
Depending on what you read, or who you speak to, a healthy employee turnover rate is somewhere between 10 and 15 percent.
In some industries though, a ‘healthy’ employee turnover rate is never obtainable. In fact, sometimes turnover has to do with conditions beyond an employer’s control – certain industries are inherently subject to high turnover rates.
This means employers in these industries must work harder to engage and appreciate their staff. But which industries struggle the most with turnover? And what can you do to reduce employee turnover if you work in an industry with high turnover rates?
DialAmerica, a leading U.S.-based call center, is now offering DailyPay as a financial wellness solution for its 3,000 employees
NEW YORK (August 31, 2017) – DailyPay, an on-demand payment platform that reduces employee turnover through instant access to pay, today announced a national partnership with DialAmerica, a leading privately owned domestic contact center company with over 3,000 employees.
Financial wellness programs at the workplace have gained popularity over years. In a recent Bank of America survey, nearly three-quarters of 1,020 plan sponsors surveyed believe that financial wellness solutions will be standard elements of benefits packages in the future. It is also suggested that large companies will lead the way in implementing programs.
If you pay your employees competitively and focus on a healthy work atmosphere, then it’s easy to recruit all the talent you need, right? As it turns out, this is flawed logic. In most cases, it’s difficult to hire quality employees, even when the pay is decent and the atmosphere is warm. In today’s world, it takes more to hire and retain top talent.
Employers can expect their employees to call in sick from time to time. Sometimes the calls are legitimate, but other times they might be more of a stretch to believe. It turns out some excuses are better than others. It also seems that calling into work may be an industry-specific matter. Some companies are more likely to fall victim of employee absenteeism than others.
It is expected, by most employers, that their workers will miss a certain number of workdays each year. When employees begin to chalk up excessive absences, decreased productivity and morale – as well as an impact on a business’s finances – become apparent.
We’ve written about how the lack of financial security is a catalyst of increased turnover, absenteeism, and overall financial unwellness. It’s easy to read about financial insecurity and not link the struggles to the employees who work at your organization. But, it is more than likely a percentage of your workers are currently struggling to make ends meet.