How businesses pay their employees in 2018 shouldn’t be the same as how they paid them in 1988, and yet, it is. Now there’s a new, much better payroll trend some companies are considering to fund their staff: Offering employees on-demand wages.
Simply put, on-demand pay is a financial wellness practice that empowers employers to help their workers avoid things like incurring debts and late payments by offering them access to a portion of their earned wages up front. On-demand pay gives workers access to funds they’ve already earned during that pay-cycle, meaning they’re by no means in-debt, yet they can use these funds to deal with things like a sudden financial crisis.
Better yet, these employee advances come with a host of other benefits for both businesses and employees, alike. Here’s a rundown on the five major reasons you need to be incorporate on-demand wages into your company payroll structure.
5 Reasons You Should be Offering On-Demand Wages to Your Staff
1. On-demand Wages Help Workers Avoid Predatory Lending
Offering your employees on-demand wage advances is crucial to helping them to avoid things like payday loans and cash advances, two of the most prominent forms of predatory lending. This payroll technique can save workers from shelling-out, in some cases, hundreds if not thousands on interest fees accrued from high-APR loans.
2. They Help Combat Overdraft Fees
There are few things more financially worrisome than stacking up overdraft fees, which only get more expensive as time goes on if they’re not addressed. But, when offering on-demand wages, companies can help employees avoid this vicious cycle of compiling overdraft fees by letting workers get their bank accounts squared away—ASAP.
3. They Help Employee’s Maintain (or Improve) Their Financial Wellness
Roughly three-quarters of the entire US workforce lives paycheck to paycheck, hindering people’s ability to garner any sense of financial wellness. Offering these financial advances, which are straight from the wages they’ve already earned, help employees attain a sense of financial well-being. In fact, research shows that employees who feel financially stable at their jobs have increased levels of productivity, to boot.
4. They Can Make Employees Stick Around Longer
One of the most common reasons employees leave any one job is due to a lack of financial fulfillment. Studies actually show that paycheck stability more than increased income is what people prefer. Giving on-demand access to their earned wages is a fantastic way to maintain (or improve) employee retention.
5. On-Demand Wages Save Employers, Big Time
More than 13% of employers issue paycheck advances on a regular basis. The benefits of giving staff early access to their wages through a third party provider can also greatly benefit the employer. From saving on everything from payroll and staffing costs to time spent mulling through paperwork, companies can come out ahead just as much as their employees when adopting on-demand wage advances.
How ZayZoon Comes into the Picture
ZayZoon is a financial technology (FinTech) company that was created to help employees get ahead of sudden expenses, protecting and improving their sense of financial wellness. Through partnerships with payroll and employers, ZayZoon gives employees access to their earned wages, well before payday, so they can avoid payday loans, overdraft fees, you name it.
To see how ZayZoon can help you or your employer get access to on-demand pay, click here for more information.