This is the second in our series of articles covering employee experience. It’s not required, but you should also read part one of our series, “Employee Experience Trends in 2019“.
Similar to many of their peers in the senior care industry, Christian Horizons was plagued by high employee turnover rates—the industry average is about 80-90%.
High turnover creates staffing gaps which lead to a multitude of issues:
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!
Customer satisfaction and employee engagement are intertwined issues that cannot be simplified as just a hiring issue. There are actually four employee engagement environments that you should start investing in, which will be a direct investment into customer satisfaction.
Sometimes, it’s the small things that matter most to your employees. When your employees feel good about their job environment, they stay longer, and the impact on your bottom line is largely noticeable.
Turnover has obvious impacts on your organization, like increased reliance on recruiting or lost productivity. The impact turnover has on a business owner has been covered a number of times. But, a less obvious inclusion in the cost of employee turnover might be the emotional implications employee turnover has on your workforce.
The importance of employee engagement can’t be overstated. In short, employee engagement directly affects a company’s bottom line.
Loyal employees are engaged employees. Engaged employees create better business outcomes than disengaged employees. These are facts.
Still, poll after poll suggests that employees are largely disengaged, and employers might not be doing enough to rectify the situation.
Most business owners know there are significant costs associated with ignoring employee engagement. Engagement directly correlates to productivity, and heading into the fourth quarter, extra effort may be the component you need to reach your year end-goals.
Employee loyalty is more important than ever. The current labor market is considered uncomfortably tight – a situation that creates an excess need for workers. This makes it difficult to hire for open positions and makes it increasingly expensive to lose valued employees.