Secrets to Recruiting & Retaining Great People in a Crazy Labor Market

Webinar

Secrets to Recruiting & Retaining Great People in a Crazy Labor Market: More About on Demand Pay

Webinar

Secrets to Recruiting & Retaining Great People in a Crazy Labor Market: More About On-Demand Pay

In this webinar you will learn:

  • Why on-demand pay is a powerful weapon in the newest war for talent
  • Why real-time pay is foundational to employee well-being and productivity
  • Considerations for evaluating an on-demand pay provider
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Guest Speakers

Josh Bersin

Founder and Dean

Josh Bersin Academy

John Stewart

HR/Payroll Director

Houston Methodist

Jeffrey Shapiro

Director, Talent Acquisition

RadNet

Jeanniey Walden

Chief Innovation & Marketing Officer

DailyPay

Webinar Transcript

Josh Bersin:

Okay, thank you, Becky. Well, thank you all for joining us. We’re going to talk about on-demand pay and we’re going to talk about recruiting and we’re going to talk about the labor market. I think most of you probably know we’re in one of the most interesting situations that we’ve seen really in the workforce in a long, long time. When we are coming out of the… Well, it’s not clear for coming out of the pandemic or not depending on what day you look. But we’re coming out of the pandemic in most places and people are rushing back to work. Yesterday and this morning we had a lot of HR people showing us their offices, how they had brought their people back to work. At the same time, wages are going up, it’s getting increasingly hard to hire. I’m going to show you some data on the mobility of the workforce, it’s going to blow your mind. And technology is enabling real-time pay.

Josh:

I’m going to talk about real-time pay in a minute. But real-time pay is a very, very existential innovation in the way we deal with employees. Because people can earn and get paid daily for the work they do. Just like we have on-demand work for a lot of the healthcare providers and other industries, we’re going to talk about that with the panel in a minute, you can have on-demand pay. And we’re going to talk a little bit about what that is and how that works. In addition to the job market, in addition to the economy, and the pandemic response and the hybrid work plans that everybody is putting together, we also have a lot of financial stress in the workforce.

Josh:

The United States in particular, as you know, is a very large country and there are cities and localities with high income earners and there are cities and localities with lots of labor and low income workers. In some of my conversations with HR leaders, I’ve heard things like people who accepted jobs on Monday, didn’t show up for their first day of work on Tuesday because Monday afternoon, they got to raise, an offer for 50 cents more per hour from somebody else so they decided not to show up. So money is a big issue and a big attraction, and I’m going to talk about what that is in a minute.

Josh:

The other reason that I want to raise this topic, and we’re going to talk about it today, is the tapestry or basket of offerings or benefits that you provide to your employees is going to have to keep getting better. We’re not past this economic cycle at all, it’s going to get tighter, the labor market’s going to get harder. If you look at the statistics on unemployment, this is the unemployment rate. Obviously, it shot right up during the pandemic, but that was not an economic recession, that was really a recession in demand because people couldn’t go out and buy things and go to the stores and shop and go to entertainment. We may end up coming down to unemployment rate we were right before the pandemic, which was only two years ago.

Josh:

And the reason I think that’s a very high probability is this. In April of this year, which was about two and a half, three months ago, 4 million people voluntarily decided to quit their jobs. That’s called the quit rate, it’s a statistic covered by the Bureau of Labor Statistics. And it’s the highest number they’ve ever seen. Between 2.7% and 2.8% of Americans, and this is only the United States, but I think it’s pretty common in other countries, voluntarily left their jobs. The reason people voluntarily leave their jobs is because they think there’s something better somewhere else or they have another job. And so wages are going up and benefits are going up and flexibility is going up. Of course, you’re all working on other things too, hybrid work, diversity and inclusion, training and education, giving people better careers. In my 22, 23 years as an analyst, I’ve never seen the human resources profession so dynamics, so innovative, so excited about the potential we have.

Josh:

One of the things that has helped us in HR, and many of you probably are experiencing, this is the fact that CEOs understand this now. This morning, we were joking around in the beginning as Jeff Bezos plummeted to earth and landed in a little poof in his space capsule. Even Amazon has come to the conclusion that they need to be a great employer not just a great customer company. And mostly CEOs know this, and so they’re leaning on you and us in HR to help them do things that will make their workforce more productive and improve retention. By the way, when people leave your company, it’s very, very expensive. We did a whole lot of research on this. It can cost three to four to five times the salary, an annual salary, of a highly skilled person to replace them. The cost of hiring, the cost of recruiting, the cost of training, and then, of course, the productivity loss of somebody leaving. So these are very important things.

Josh:

One of the ways companies are adapting to that is thinking about their leadership and their leadership strategy. And on-demand pay is a reflection of what we call human-centered leadership. Human-centered leadership sounds like a silly concept, since all leaders have to be human-centered. But really what we’re saying is that for everything that happens in the workplace or the workforce or on the job, there’s a human side to it. That is a reflection of how people want to manage teams, how people want to manage the company. Anyway, we have a whole research paper on this if you’d like to read it, it’s on our website. But this was developed through conversations with companies about the response to the pandemic. In fact, during the last two years, we’ve had a weekly call with 300 to 400 companies every week for an hour to two hours talking about what they’re doing in response to the pandemic. And they’re doing everything they can to make work better.

Josh:

In terms of the concept of leadership, leadership isn’t command and control anymore, it’s focused on wellbeing, it’s listening, it’s paying attention, it’s flexibility, it’s being empathetic, it’s giving people a sense of purpose, and energy and empowerment and creativity. So this is much, much more than on-demand pay. But this is really what the world we’re living in and the business climate we’re going to be seeing for the next couple of years. By the way, this to me is a very familiar situation, I’ve been doing this for a while. And in the year 2000, those of you remember, it was 21 years ago, I can’t believe it was so long ago, we had a labor market just like this. We were throwing everything we could at employees to try to get them to come work for different companies. I worked for a company that was in the tech industry and we couldn’t find people.

Josh:

One of the things we found is that money is important, but it isn’t the only thing. Career and growth and opportunity is important. So one of the other things that companies are doing is they’re creating mobility, they’re creating opportunities. We call these career pathways ways, ways for people to come to your company and work in a job that fills their needs now. And we’re going to talk about this particularly in healthcare in a few minutes. But also giving them opportunities to do other things.

Josh:

The big real language around this is what we call employee experience. And Cathy Andra, who’s on the phone with us, we’ll let her talk in a few minutes, just finished publishing a massive study on employee experience which we worked on for close to nine months. What we wrote about and really discovered from the conversations is something that most of you know, which is employee experience is really about psychology. It’s making people feel safe, it’s making people feel included, it’s making sure that they feel that they can accomplish their personal goals in the context of what your company or your organization is trying to do. That is not just Maslow’s hierarchy, that is a design problem.

Josh:

In fact, if you go back and you read up on employee retention and engagement from maybe six or seven years ago, you read a lot about engagement surveys and engagement correlations of what causes people to leave companies. That is now a very common practice in HR, to survey people, to use glass door or other places internally to get information on what people would like. But really it is becoming a design problem now, where you get the opportunity and you have tools like DailyPay to design a work experience that directly improves the engagement, retention, and productivity of the people in your company. This is the first time this has happened. I think most of you probably looked at employee benefits as just that, benefits. Oh, here’s a long list of things we provide, pick the ones you like, they’re all available to you. You throw them out in front of people during the recruiting part of the process. And then once they join the company, they don’t even know what most of the things are in a lot of cases.

Josh:

On-demand pay is something different, it’s something new, it’s something very relevant. And you’ll hear from the panelists that it has a huge impact. It fits into a broader context. And I just want to take one minute on this since I know a lot of you are probably HR leaders. Pay is important, nobody can deny that. But a lot of research shows that it can also be what’s called a hygiene factor. A hygiene factor means that paying people twice as much money doesn’t make them twice as happy. It may make them come to work for you versus go somewhere else. But once they show up, it’s the day-to-day things that really make the difference in people’s work experience. When we looked at all of the things you can do at work, and Cathy did this research and I’ll let her talk a little bit about it when we opened up the conversation here, we looked at about 90 things.

Josh:

What we found is that of all of them, the ones that matter the most to employees have to do with trust, transparency, flexibility, which is where on-demand pay fits, and a sense of belonging, a sense that the company has created an experience where I feel like I belong and I’m not forcing myself to come to work every day. And we’ll talk about this a little bit, but go to our website, you can download this, we have a beautiful 100 page report on this. You can read through it and learn all about it.

Josh:

One of the things we found from all the research and all the data was that not every company knows how to do this well. About one in five are doing a really great job and they’re creating an opportunity for growth and development and equity in the company. But most companies are dealing with transactional issues. One of the reasons we’re fans of DailyPay and those kinds of solutions is these are very highly flexible benefits and improvements to the work experience that’ll move you up this pyramid or this maturity model to give you a stronger employment brand, a higher retention rate, and just greater level of employee satisfaction. And I think Jeff and John are going to give you some very specific examples of how that takes place.

Josh:

The final thing I’ll say before we get into on-demand pay is return on investment in this. First of all, things like DailyPay are not very expensive, they’re really not a high cost compared to the cost of payroll in general. The payroll in the United States is trillions of dollars. Most companies it’s the number one controllable costs, and so you want to get your return out of that. What we found in our research is that when you do small things, like DailyPay, to improve the employee experience, the return is enormous, very, very high. Because, as I said earlier, the downside of somebody not wanting to come to your company, leaving early, resigning, coming to work and not feeling engaged, not feeling fully productive is enormously high, it’s much higher than the cost of the benefits like programs like we’re going to talk about in a minute.

Josh:

So what is on-demand pay? It’s actually a pretty innovative idea. Before I tell you a little bit about what it is, the reason it has so much impact is that when people feel financially stressed, everything else is accelerated, everything else gets worse. What this chart is showing you is on the right are people who did not feel financial stress, on the left is people who did feel financial stress. You can see the people on the left are having problems 50% to 75% worse or twice or three times worse than the people on the right because they’re bringing to work worry about their car payment or their kids going to school or their groceries or whatever it may be. So this is not just an issue of earnings, this is an issue of lifestyle and making people healthy.

Josh:

In fact, one of the things that the PWC research finds and other people have found is that one of the greatest, in fact, maybe the greatest problem that individual face in mental health is their financial health. We call it financial health now because it is a form of wellbeing. If you don’t have enough money or you can’t budget or you don’t have savings or somebody’s breathing down your neck to make your rent payment or whatever it may be, you’re not healthy. Not only are you not engaged, but you’re not healthy. So giving people an opportunity to earn money as they need it is a significant wellbeing benefit too.

Josh:

Now, this is not a new idea, there have been accommodations to this for many, many years. Check cashing companies that charge enormous fees to cash paychecks in advance, payday loans, which have relatively high interest rates and aren’t always safe places to get your money, cash advance programs, which charge relatively high fees, some of which are illegal in some states. And then what DailyPay has pioneered is something called on-demand pay. What DailyPay basically does is something that’s really advanced beyond all of this. They really run your payroll for you and advance it to employees on a daily basis based on the hours that they worked. So the employee sees their pay available by the hour, and you don’t see any real difference in your operations. We found out about this two or three years ago from a number of companies that were doing this. And we found out that it was actually quite an exceptional solution.

Josh:

Now, in terms of the features, I’ll let a couple of folks on the phone talk about this in a minute. Employees get money available, they can get it as needed 24 hours a day. They can get it through a debit card or a whatever form of cash they typically use. There’s a small fee to take money out when they need it. They can see the updated availability of funds every day based on the hours that they worked. And there’s service and support behind it. And DailyPay as a vendor is also very comfortable and familiar with change management and communications and training to make sure that everybody knows how to do this.

Josh:

From the standpoint of you as an employer, it’s really pretty easy, and we’ll Jeff and John talk about their experience with it. The DailyPay is the leader in this market, so they are able to do this in a very effective way. If you want to learn more about it, by the way, and read about it, this is a research report that we produced that has additional case studies in it. And I’ll make sure you get these slides so you can download it if you’d like to take it back and show it to other people inside of your company.

Josh:

So anyway, that’s a little bit of an introduction. What we want to do now is I want to introduce Jeffrey Shapiro and John Stewart, both of whom are users of on-demand pay and they have experienced in this weird recruiting market. Both of these companies actually work in the healthcare industry. So they’re both dealing with the highly dynamic labor market of nurses and medical professionals and different forms of medical jobs. They have both found on-demand pay to be extremely helpful and extremely useful. So what I’m going to do is turn off the slides. You guys will get copies of the slides, I know people always want to know that. And we will open up the lines in a second here. You guys there? Great. All right. Let me start by having you guys introduce yourself and talk a little bit about your company and what were some of the talent issues you’re facing. Then we’ll go back and talk a little bit more about on-demand pay. So Jeffrey you look like you’re un-muted, would you like to go first? Introduce yourself and tell us about-

Jeffrey Shapiro:

Sure. Afternoon, everybody. I am with an organization called RadNet. We are in the healthcare sector, we are the country’s largest outpatient based provider of diagnostic imaging. So what does that mean to everybody on the line? What does that mean to our patients? Diagnostic imaging, especially with COVID, is at the forefront of everything. So we’re talking X-ray, MRI, CT, ultrasound, mammography, nuclear medicine. So that’s a little bit about my background. I came out of healthcare operations when I originally started my career. And I have been on the talent side from agency to now in-house corporate for nearly 13 years.

Josh:

So what is your recruiting process like, and your ongoing turnover and kinds of issues, can tell us a little bit about that?

Jeffrey Shapiro:

So the recruiting process was really thrown for a loop completely. We were not victimless to what most of the world went through. We did go through furloughs and layoffs, we did see patient volume plummet, so 40% of daily patient volume. People were thinking of things as elective, we are now finding out that what was originally thought as elective has long-term effects when it comes to people’s health, specifically with mammographies, like breast cancer is at the forefront of everything right now. Women were putting things off just out of fear of the unknown. So we did have to cut, I think it was like 2,700 people were victim of furlough and or layoff.

Jeffrey Shapiro:

Then with the flip of a switch, with little to no preparation, patients started coming back. We would call people to come back from furlough. But rightfully so, they may or may have not found another job, not being comfortable coming back work for own safety or healthcare related issues. So our TA team went from rec-loads that were zero to five, because we were doing nothing, to 50 to 75 per TA partner, for 12 TA partners covering eight different states, 340 different outpatient imaging centers. So the past year has been a whirlwind. If we want to… I want to give John some time introduce himself, unless you want me to start on the value of DailyPay, [crosstalk 00:21:19].

Josh:

No, we’ll get to that in a minute. No, that’s great. So you’re recruiting like crazy now? Great.

Jeffrey Shapiro:

Yes we are.

Josh:

John, so you’re in the healthcare industry. Tell us about the organization you’re with and what it’s been like to recruit and hire people in this environment.

John Stewart:

Sure. And thank you, great to be a part of this today. Our organization, Huston Methodist, is made up of eight hospitals, there’s a physician organization as well as a research group. There were 26,000 plus employees. My background with the organization, my responsibilities are with the payroll, HR, and employee information teams. So just like Jeff said earlier, we had our challenges. Fortunately, we did not have any layoffs or anything during the pandemic. What we did do, and which obviously were some challenges, was as we reduced services in other areas and needed more to address COVID patients, things of that nature. What we did is we had labor pools from the other teams that didn’t have any type of services going on at that point in time and made them a part of our labor pool to roll out and address all of the COVID patients and issues that came with that.

John Stewart:

So that’s been something that we’re really proud of, the fact that we didn’t have any layoffs, that we did indeed have a situation that we even made our employees whole. Well, if they didn’t have, they volunteered for our labor pool and we didn’t need them in the labor pool for where their skill set to provide any services, then we made them hold so that they didn’t lose anything during the pandemic. So that’s a little bit general background.

Josh:

What is your general recruiting and turnover like in the hospital?

John Stewart:

It’s like any hospital organization, we’re always in a need for good, talented staffing, especially on the nursing side of the fence, we have it on all needs. But basically we recruit like everyone else. We’re part of the medical center here out of Houston, Texas. Some on this WebEx may be familiar with us with our requirement for all of us, all 26,000 plus of us, to get our COVID vaccinations. So that’s created sometimes some challenges with recruiting efforts. Although the vast majority had no issue with that and was glad to be a part of that vaccination requirement.

John Stewart:

But we’ve had to roll out and engage in sign-on bonuses, we’ve had as much as $15,000 for both a sign-on bonus that’s spread out over a couple of years, as well as for referral bonuses. So employees can get in on the action as well and make some money on the situation, where they basically would have an equal payout for them with regards to referral bonus. So we’re always in a state of needing talented folks to be a part of our organization. And as we will talk later, we’ll say how DailyPay fits into that. But that’s been a constant reality for us, is how do we continue to bring in good talented employees into our organization?

Josh:

Great. Well, before we get into DailyPay, let me ask Cathy to chime in for a minute. Cathy did the research on employee experience that I briefly went through. And also I know interviewed you guys a lot on this topic. Cathy, what would you want to tell the audience about generally the employee experience that you learned that would lead to daily pain? Then we’ll go back and talk more about the product.

Cathy Andra:

It’s a great question, Josh. And as you said, we studied all these different topics on employee experience from the work you do, to management models, to health and wellbeing, and the workplace and growth opportunities and then trust in the organization. What we found is trust in the organization is the most important of these big columns of big elements of the workforce experience or employee experience. The way that I see this relate to on-demand pay, and specifically what DailyPay does, is your employers will trust you when you look out for them, when you care for them, when you have their best interest in mind, when you watch out for their health and wellbeing.

Cathy Andra:

And as you said before, the study of the study shows that employee financial health is related to mental wellbeing, productivity, engagement of course, retention, attracting people. So if you do watch out for the employees and help them make ends meet, as many employees actually can’t make ends meet, they will trust you more and everything will get better. Again, you’ll have more engaged customers, you’ll have better financial outcomes, and, of course, easier time recruiting and retaining people as well.

Josh:

Great. Okay, thank you. Okay, Jeff, back to you. So where does on-demand pay fit into this massively, what, 50 open recs per recruiter or something like that? How does it help you with recruiting and how does it help you with retention and what has your experience been like?

Jeffrey Shapiro:

So it’s impacted retention, it’s not a magic bullet that’s going to fix everything. I never think one thing is a solution to anything, a little bit of everything will slowly move the needle. But on the recruitment end, we have been really strategic at every touch point when we’re going over total rewards with any potential candidate, a cold call that it’s a differentiator for us. So the reason we entered into DailyPay, on-demand pay is to try and be innovative. What could we do to attract talent that our competitors are not? And the majority of the healthcare space is not doing this. So we look to get out ahead of it, advertise it, throw it out there, let people know that it’s on-demand, we have gone rogue.

Jeffrey Shapiro:

So I don’t like getting into this, but we have gone rogue. And instead of posting straight into the ATS, we’ll take a job and we’ll go straight to Indeed, we will sponsor it with the job title. Let’s call it a mammo tech. And after the job title in parentheses, work today, get paid tomorrow. Just to pilot and see what things are doing. Does it impact it? Is it helping? So the one thing I could say again, not the magic bullet, we are lucky to be sitting in a position where our organic applies, so people who are coming to us, has not dipped. So we are still getting a steady stream of talent, job seekers are out there. Our contact center, which is call center for people who may not know, has gone through, I think the last number I looked this morning was 78 FTE hires in the past six weeks. So call volume is going through the roof. On the back end, we’ve gone through some organizational changes in the contact center by standardizing leadership, expanding, giving them better tools in the contact center.

Jeffrey Shapiro:

And they came to TA with this massive project of, we need this many by this time. At first I was really terrified because all you read about is no one is applying for jobs. We have dabbled with sign-on bonuses, it is not something we rely on. So the recruiter in me never wants to fix every problem with money, we don’t always want to throw more money at something. So we’ve gotten really granular on what is our value proposition, why us? And DailyPay has definitely made a difference in the fact that if I am a job seeker and organization A and organization B are more than likely offering me the same benefits, same money, same job, same schedule, why wouldn’t I go where I have access to my money faster if I need it.

Josh:

A question just came in, Jeff. And I want to ask John this too, have you found that the work today pay tomorrow leads folks being ready and willing to leave for the next best opportunity since there’s nothing really getting them to hang around? Did it work against you?

Jeffrey Shapiro:

I can’t say it’s a pro or con. I think everybody, John will know also, in healthcare, you have a demographic of job seekers who are money motivated. So we still have attrition, we still have people leaving for more money. But if I could get, let’s just pick a random number, $20 an hour and have access to my money when I need it compared to $20.50 and they are paying me once a month or every two weeks, I may or may not be motivated to go. So I hope that answers this person’s question. But it’s definitely-

Jeannie:

I think-

Josh:

Jeannie, did you have a comment?

Jeannie:

I was just going to jump in and say, Jeff you’re absolutely right. At DailyPay, we’ve done some just internal studies and what we’ve heard from employees directly is that people getting daily pay would stay up until the next best offer is 25% higher than what they’re making now. So if you had to put value on it, if it’s $10, they had turned down jobs up to $12.50, just for easy math. [inaudible 00:30:59] 25%. So I think you’re spot on.

Josh:

That’s pretty significant. Thank you, that’s great.

John Stewart:

The only thing I would add, and just to echo what others have said, we have very high engagement scores whether employee opinion surveys and what have you that we do. I don’t know that we have that particular issue of well, pay me later kind of thing is going to be a factor. What we do find, and I know we’ll get more into that later with regard to how the structure, the fundamentals work within DailyPay, the fact is we’re always needing employees to actually work their hours. Especially when you’re high with COVID issues or patients and that sort of thing, you need more and more people to step up and say, “I’ll take that extra shift.” And that sort of thing. Try to minimize the contract labor where you can.

John Stewart:

So this is something that I don’t know that we’ve had that particular issue. In fact, I don’t think we have. It’s been more, what can you do for me to show that you do care for my wellbeing, my financial wellbeing? And what can you do to have an opportunity so I don’t have to go outside the organization to get some financial assistance? So that’s been the biggest driver.

Josh:

When we were talking before, you were talking about these as needed jobs. PRNs, I think they’re called, did I get that right?

John Stewart:

Right, right. And don’t ask me to tell you what it stands for, but it’s Latin.

Josh:

So how does DailyPay impact that? And tell everybody a little bit about that process.

John Stewart:

Well, the PRN employee is one that’s basically by design is, as we need you we’ll call you out. They don’t have a full-time commitment, they don’t have a part-time commitment. Basically we’ll call you in to provide a schedule relief that we need to do then. So again, as we have demands of the organization, as the workforce, we’ve had more and more need for additional labor to address. We’re doing very well as an organization. And these financial needs are taken care of a lot by the PRNs filling in to help out with any gaps that we might have with our current staffing that’s part-time and full-time. Where I think DailyPay can come into the equation is, “Hey, I need some money. I don’t have to wait two weeks to get that down the line. I can actually get that rather soon after I worked that extra shift or after to work that extra three [crosstalk 00:33:30].”

Josh:

Therefore I’ll take that shift, so you’re more likely to take the shift because-

John Stewart:

You’re more likely to take that shift and say, “Okay, this is something I can get immediate rewards for doing that extra effort at that point in time.”

Josh:

Okay, great. Hey Jeannie, there’s a question, I don’t know if you saw it, about math. When salaries go higher, do you guys have any research on that? Did you see that one?

Jeannie:

Yeah, I’m reading right now. How would this work with both having hourly and salary employees? How much extra work does it create each day? So no extra work. Essentially the way that DailyPay operates is it integrates into your payroll system, your time management system. So if you’re using an HCM that takes care of all of that, there’s literally no change to the process that you do. So it’s very simple to use. And the question above that was asking, what level of employee appreciates that daily or salaried or on-demand pay? What I can tell you is it’s for every employee. So I know in the case of Houston Methodist, even some of their hourly people are making six figure numbers. But hourly employees enjoy it, salaried employees enjoy it just as much.

Jeannie:

For those people that don’t run into a financial crunch, there’s people that are living paycheck to paycheck, Josh, like you said. There’s also a group of people who come out to get in the car to go to work and their battery’s dead. You could make a million dollars a year and your battery dies, you might not have the money for it for whatever reason. But then there’s a whole other group of people that I love working with, and these are really proactive users who take their money before the company’s scheduled payday to invest it in a high interest savings account or potentially in the stock market, who will put it into their 401k before the scheduled payday so they can just grow their savings, or those people that take it out to pay down high balance credit cards to improve their credit score so they can buy a house or a car down the road and really accelerate training. Especially in healthcare, we’ve seen a lot of people taking their pay through DailyPay to accelerate certifications and get to the next income level or do things along that nature. So it’s great for everybody.

Josh:

Great. Okay, Jeff, let me go back to you. Tell us a little bit about your experience with it, what has the impact been and how do you use the system?

Jeffrey Shapiro:

So it’s an overwhelming positive impact. So let’s talk numbers. So we are 8,600 employees as of July 1. And I can tell you that as of July 1, 40% of our team members have at least enrolled in DailyPay. So we’re talking about 3,100 people are on the system. Kudos to my team, I’m taking this as a big step there in our cap, 55% of our new hires are registering for DailyPay within 30 days of employment. So this goes back to that strategic touch point of making sure we are using it as a differentiator for why we’re an employer of choice. It’s not only during our initial phone screens. Our operations partners, the hiring managers, if they are being asked questions about total rewards, they are fully prepared to not punt it back to, “That’s not something I’m comfortable talking about. Please connect with your TA partner or HR.” But we are making sure that DailyPay is part of that, what everybody calls drink the Kool-Aid day. The orientation, day one reaffirm that I have made the right choice in being here. It’s also talked about during orientation.

Jeffrey Shapiro:

So we’ve gotten very granular, making sure this part of our total rewards is something everybody is well versed on. So they are educated on the cost, the frequency. You don’t need to be hourly you can be salaried. And it’s working, so like 65% of new hires, is massive. And then just one other number to throw out there, this is a DailyPay term, adoption, adaptation. Which is, from what I’ve heard, means more than one transaction. So 15% of our 40% that have enrolled have used this feature more than once. That says a lot. We’re talking about 3,100 people have done something with it, but then 15% of those 3,100 have done it at least more than one.

Josh:

So the first time they use it, they’re probably surprised. And then they’re like, “Wow, that was pretty good, maybe I should do that again.”

Jeffrey Shapiro:

The fees are minimal, the ease of use is… There’s a lot of fear, people are scared about their money. But when you educate them and it’s not a payday loan, it is your money access too early, it is in your bank if you set it up with your bank, you can have it on a card. There’s just so much to it that people are afraid of. But if you slow down and everybody is educated on the recruiting side, the HR side, the operations side, you could really ease any concerns and then they’re all for it. This is not just the contact center, these are similar to what we were talking about. There are a lot of healthcare people, especially clinical roles, that are hourly employees but still making six figures. An MRI tech is making $45 to $62 an hour, depending on how long they’ve been in the field. But we are talking about people that are definitely making six figures are using it.

Josh:

John, tell us about your experience with the adoption and the feedback you’re getting in your place.

John Stewart:

Absolutely. Tuan Tran, who is our fantastic payroll and employee information manager and myself attended the American Payroll Association’s one of their annual conferences. We met Jason Lee, the founder, I believe, in the CEO of DailyPay. And he was the keynote speaker on one of those sessions. So Tuan and I stopped by and talked to him afterwards or whatever. And quite frankly, it sounded a little too good to be true, it wasn’t something that we initially thought, “Wow, this is great, let’s do it.” It was one of those things, this is interesting, let’s explore this more. So what we did going back when we came back home to discuss it further, it just seemed like, do we really want to get into a situation where we’re paying our employees ahead of the scheduled pay day? When indeed will they not have any money come payday? That kind of thing. Is that something that we’re putting them into a financial box, if you will, to have those challenges?

John Stewart:

That might have been some of the concerns initially, it couldn’t have been further from the truth. We actually can’t believe how well it’s been accepted here at Houston Methodist. We signed a contract, I believe it was in May of 2019 due to the efforts of Tuan and our IT group and the rest of the payroll team. We were able to get it in place in maybe something like 90 days, something of that nature, rolled it out to a pilot group in July of that year, and then rolled it out system-wide in September. Our numbers have just grown and grown and grown and the degree of interest by our employees to participate in this program. We now have, since that timeframe, over something like $45 million. That’s a lot of money that basically our employees have said, I need some of this money to address my emergencies or whatever issues that might be going in at that time.

John Stewart:

So every paper we have roughly a million dollars, it’s a lot of money obviously, for over 3,300 employees that are using this feature to help them through whatever financial emergencies or whatever situations they might be having at that point in time. The amount of work that is necessary on a routine basis, if you do everything right on the front end, it just is pretty smooth and it’s not that demanding for our payroll team to put that in place. So those are some of the numbers we have. I want to say that in that short period of time, so we’re talking less than two years that we’ve rolled this out system-wide, we probably have people that have had 10 or more utilizations of this. It’s basically there in their hip pocket, they don’t want to use it that particular pay period. It’s not an issue, it’s just it’s there available when the need arises.

John Stewart:

I want to say the average is a little less than $200. So it’s that battery, it’s that perhaps car repair service. So it’s not like, give me all I can get kind of thing, it’s perhaps they’ve worked that extra shift, that sort of thing. So we’re feeling very good about the fact, the benefit that we’ve added to the organization. And it’s very little cost to the employee, like an ATM fee, and get them through that crunch without them going through some other means to get their financial needs taken care.

Josh:

Jeannie, there’s the question in here, I think you’re typing an answer, I can’t tell. I’m curious about the operational aspects of how our weekly benefits, medical dental deducted, how our 401k deductions… Do you see that one?

Jeannie:

Yes, yeah.

Josh:

Can you tackle that one too?

Jeannie:

Yeah, probably easier to answer live than type. So essentially during the implementation process with DailyPay, we will work with your backend payroll and time management systems to understand what’s currently happening for employees. So you’re feeding us the files. If your employee is at a 28% tax bracket or a 32% tax bracket, has any types of 401k loans, any types of wage garnishment, anything like that, that information is shared with us during the setup process. So what happens is all those calculations are enabled as an employee earns money. I’m going to use really easy numbers for easy math purposes. Say they earned $150 and $50 of it is going to be needed on the company scheduled payday of those earnings to cover all of those expenses that we just talked about, the employee would only see the $100 is available for them to withdraw from what we call their pay balance. So their pay balance would show you earned $150, you have $100 available to access right now. That way, people make it to payday without having any concerns about not having enough to cover those costs.

Josh:

Great. Jeff, do you want to say something? No. Well, let me ask you guys, is there any downside? What is the cost or difficulty in this? It sounds to me like something everybody should do.

Jeffrey Shapiro:

The only downside I could think of is humans, fear of change, human behavior, people are just scared of the unknown, that’s it. But there’s no reason. I am not an adapter, I have enrolled, why wouldn’t I enroll if I ever need to? If tomorrow my brakes give out, and I have two small children and a dog, so excess money is not always there. But if tomorrow I needed it, I’ve enrolled just in case. So I can’t see a reason outside of the fear of, what that does mean? I don’t necessarily want to give access to my bank to somebody else, but that’s the only thing, the fear, that’s it.

Josh:

John, what’s been your experience? Have there been any downsides, any surprises that you would want to tell people about?

John Stewart:

I wouldn’t say any down side or surprise. Maybe I’ll do a little bit of surprises. It’s all about how well it’s communicated to the employees. We chose, and again, it’s not something that other organizations are going to follow the same suit. But what works for us is we chose to only allow someone to get up to 50% of their pay that they’ve earned at that point. We just wanted to make extra sure. Will we changed that perhaps someday? Maybe. But it’s working. So it’s something that we chose to make sure some money come by weekly. Again, it’s not that we had challenges why we put it in, we just proactively address that on the front end.

John Stewart:

The only other thing is just good communication on the front end because someone might say that we’re going to be sharing information. Something we chose to do is that an employee had to give a positive enrollment requests because we didn’t want to share any of their personal data until they told us to share that personal data. So again, it’s the direction we went as an organization. I wouldn’t call it a downside, it’s just something we chose as an organization to make sure that A, the employee wanted us to share their personal information and B, that they realized upfront, we’re not going to give you all your money, but if you work that extra shift, if you take this on, we’ll give you up to 50% of what you’ve earned at that point.

Josh:

Jeannie, there’s a question for you guys. Minimum requirements the company needs to use this. Do you have to be a certain size or are there some…

Jeannie:

There’s not necessarily a certain size, although we do tend to work more with enterprise size clients. There is a credit process that you have to go through because certainly we want to make sure that your company is financially solvent to be able to work with you and consistently provide great service for your employees.

Josh:

Another question that I’m sure everybody would want to know is, what is the impact on the payroll department? Minimal, both of you guys said that, what extra things do you guys have to do once you set it up, anything?

John Stewart:

I don’t believe so. I think, Tuan, you want to unmute yourself, the payroll managers weapon, do you want to say as payroll manager how it impact your…?

Josh:

What’s it really like Tuan? Tell us. Ar you there?

John Stewart:

Unmute, Tuan.

Tuan Tran:

Okay, let me unmute myself. Good afternoon. So for us, for the payroll operation, we spend a lot of upfront to test the interface from our attendance system to DailyPay. But when we rolled this out, it’s very smoothly process. So we don’t have to daily babysit the process, the interface is so loud that the hours that sent over to DailyPay. We run four times a day so employee get out in the early morning shift or the one in the afternoon shift that make their daily balance update four times a day. So from the beginning we spent more time upfront, but then after that very minimal from the payroll operation.

Josh:

Okay, great. Well, let me go back to the beginning of the whole premise of this whole discussion and talk to Cathy for a minute. This is obviously a wonderful benefit, it sounds like there’s virtually no cost or downside to you guys as HR people, employees like it, a very significant number of employees will adopt it, they will become very much happy with it. Cathy, how do you put this into context to create the culture of really recruiting people in a new and exciting way in this market? You’ve been talking about employee experience and studying it now for practically a year, where does this fit?

Cathy Andra:

So we started to market ourself financial wellbeing tools and those kinds of things are, and there’s tons of them out there. But if people don’t have the money to actually save money, to put money aside, to accumulate wealth not accumulate debt, they all fall down. So we see this as we talked with many of these customers of DailyPay and others on what it did for them. It really served as a prerequisite for making all of these financial wellbeing tools work and helping people be just financially well, and in turn also be physically well, mentally well, and productive.

Josh:

You know the market better than I do, do you think this is a massive trend that basically every company should look at this?

Cathy Andra:

I absolutely think so. I think it’s just this unknown secret for most people when we talk with them. They don’t even know this exists. So I think just getting them to understand it’s actually there, you can do it without having to run your payroll every day because you don’t. When you hear DailyPay or on-demand, people think like, “Oh my God, now they get their own payroll every day.” And, of cause, that would be hugely overwhelming and not possible for most companies. But just telling people about what’s the benefit, how easy it is, and how much employees need it and appreciate it. I think it’s a pretty significant secret weapon that we discovered here and that I think people should know more about.

Josh:

Yeah, pretty exciting. Well, anything else? There’s a couple of more little questions, I think Jeannie, you could answer them about start up companies and restaurants, when paychecks vary. I think you’ve probably seeing those. Let me ask each of you guys, John and Jeff, what is your advice to the people on the line? There’s 200 people here asking questions, wondering what to do, just jump in or what would you tell them to take advantage of this?

John Stewart:

I would say… Oh, sorry. Sorry, Jeff, go ahead.

Josh:

Go ahead, Jeff. Why don’t you go first?

Jeffrey Shapiro:

All right. So anyway, going back to what Cathy was just talking about, do I think it’s a trend? I can share, true story, my neighborhood Wendy’s is in a very high traffic area. It is on a corner intersection of two really busy streets, we are talking thousands of cars passing it daily. And now hanging outside of that Wendy’s is a huge banner with says, we now offer DailyPay. So I definitely think this is something that is coming. I don’t work for Wendy’s, it does not pay me for that. So I definitely think it’s coming.

Josh:

I’m sure Jason is very happy to hear that.

Jeffrey Shapiro:

On the question at hand, I could tell you, what recruiter doesn’t want more tools? So like anybody on this call that’s in the TA space or focusing on recruitment for HR internally, this is something you absolutely can lobby for with your employer. Who wouldn’t want to be the person to bring a potential solution to their employer? And again, on recruiting, I’ll repeat myself, recruiters don’t love being in a situation where they find a problem and the only solution they have is we need to pay our people more money. It is never optically good when a recruiter is complaining, “We need more money, we need more money, we need sign on bonuses, we need retention bonuses, we need to do a fair market value study, our salary grid’s out of date.” Before you do any of that, look for every possible solution. And this is definitely a solution that you could say, “Here is something I have seen that’s out there. It could be a differentiator, maybe it helps us with a small market of labor. But anything that helps us has got to be better than what we are going through right now.”

Jeffrey Shapiro:

Because right now I know for sure job seeking is really, really at an all time low people, do not want to work. They are comfortable at home, Delta variant is creating another entire level of fear that we are now dealing with people that have come back that are already asking questions about, what does this mean? Are we going to go in lock down again? Do I have to worry about another furlough? So it’s definitely a possible solution. And I love when someone identifies a problem and present the possible solution, instead of just pointing the finger and saying, “Fix this and then I’ll get better at what I do.” So that’s my one go-to. On the recruiters, it’s a tool.

Josh:

Wonderful, you sold me. John, what’s your recommendation? How would you position this for people?

John Stewart:

I would say first, I would just learn as much as possible regarding the whole advanced DailyPay option out there and make sure you understand it fully. At least have a really good working understanding of it before embarking on it. Also run it up your organization’s senior leadership, just say, “Is this something we have an appetite for? Is this something that we can possibly move forward with?” There’ll be a lot of misunderstandings, there’ll be a lot of, I think we’ve brought it up in this conversation, that individuals may think this is some loan chart type process or something of that nature. Dispel those rumors and get clarity from it.

John Stewart:

Then they’re not paying me anything to say this, but I can tell you we’ve been very pleased in working with Steve Prince and many of the team members and the implementation teams within DailyPay. Ask questions. When we first talked, after we met Jason at the American Payroll Association, we didn’t sign up on day one. It was months later before we even said, “Okay, I think this might work. This sounds good.” That sort of thing. So I would just say, do your homework, get to know the organization, ask all the questions that you can think of, see if it’s a fit for your organization. But quite frankly, if we had to do it over again, we would have done it sooner. So it’s not a case where it’s okay-

Josh:

That’s great.

John Stewart:

… we would not go forward with it. So that’s my two cents.

Josh:

Well thank you guys, we’re out of time. The name of the company is DailyPay, on-demand pay is the category. I see some of you’re mixing it up. Cathy and I have done this research over the last six or nine months and both of us are really sold on this. So we think it’s a really powerful tool. Obviously it works for these companies and it sounds like it’ll work for you. So thank you all for joining us. And John and Jeff and Jeannie and Cathy, thank you for participating in this. I think this is it. Are we going back to Becky or wrapping up?

Becky:

We are all set. Thank you all again so much for participating and for joining in. We hope to see you for the next webinar. Thank you all.

Who is DailyPay?

DailyPay, powered by its industry-leading technology platform, is on a mission to build a new financial system. Partnering with America’s best-in-class employers, including Dollar Tree, Berkshire Hathaway and Adecco, DailyPay is the recognized gold standard in on-demand pay. Through its massive data network, proprietary funding model and connections into over 6,000 endpoints in the banking system, DailyPay works to ensure that money is always in the right place at the right time for employers, merchants and financial institutions. DailyPay is building technology and the mindset to reimagine the way money moves, from the moment work starts.

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