Giving workers access to their already earned wages is a valuable benefit and an effective way to attract and keep talent, the findings from a new survey show.
Industry Dive and global employee pay company CloudPay surveyed 150 senior human resources and finance executives as well as over 1,000 employees to gather their interest in offering earned wage access – often called on-demand pay. This benefit gives workers the flexibility to receive accrued pay any time they wish.
The survey also sought to get executives’ thoughts about the employees most likely to use this benefit, and whether it could help companies attract and retain the talent they need. The findings show that 97% of the executives surveyed believe that their workers would want an on-demand option, and nearly 80% of employees believe their colleagues would use a service like this.
Key findings of the research include:
- 75% of finance executives and 84% of HR executives believe their companies will offer an on-demand pay service.
- Nearly 75% of all survey respondents said they want this benefit implemented within the next six months to a year.
- Responding to employees who want to be paid before the next pay date is the biggest payroll issue for 70% of the executives surveyed.
- Worrying about how they’d pay for an emergency is an ongoing problem for 60% of the employees surveyed.
“The research shows that improved financial well-being can help create a happier, more engaged workforce and a reduction in staff turnover,” said Paul Bartlett, CEO of CloudPay. “With businesses struggling to attract and retain talent, on-demand pay offers businesses a low-cost, high-value, fully consumerized and flexible employee benefit that addresses an important employee concern in times of economic uncertainty.”
Rising interest rates, inflation, and fears of a recession have driven financial worries to the forefront of employees’ minds, the survey shows. The need for greater access to funds is real and something that more than 40% of employee respondents said they want. 65% of employees report being stressed about financial obligations and bills.
About one-third of executives said employees would use an on-demand pay option once a month. A little more than one-quarter of respondents believed employees would access the benefit every pay period.
The survey also sought to discern the main reasons why employers would hesitate to offer an on-demand pay option. Among them: the belief that the service would be time-consuming, complex, and costly. Further, nearly 50% of executives believed employees would leave once they had their money, while 39% said employees would not know how to manage this option properly and therefore overspend.
Bartlett says CloudPay’s on-demand pay solution, CloudPay NOW, is completely customizable and set-up couldn’t be easier. “There is a misconception from employers that on-demand pay is laborious to implement and employees could be encouraged to overspend. In fact, it’s quite the opposite. The solution can be up and running in as little as two weeks with limits placed on how much of their earned wages can be withdrawn in a transaction, providing a much better alternative to incurring credit card debt,” he said. “CloudPay NOW stands alone as the only true global solution that gives employees on-demand, instant access to their earned pay, effectively empowering them to choose their payday.”
Whether from the perspective of HR and finance executives or employees, CloudPay’s on-demand pay solution is an innovative way to make payroll work better, a lever for improving talent attraction and retention, and a progressive means of responding to the changing nature of work and the financial concerns of employees. In a world in which remote and hybrid have become part of the landscape, and flexibility is the new workforce currency, an on-demand pay service is a key tool in getting and keeping the talent you need.
CloudPay collaborated with Industry Dive to conduct this online survey. Over a three-week period in October 2022, Industry Dive polled its U.S. readers, amassing responses from 150 senior HR and finance executives from a wide range of industries to uncover the pain points and pressures finance and HR departments are experiencing in this time of change. Industry Dive also reached out to 1,000 employees online to get their thoughts on their biggest financial worries, whether they would utilize an on-demand pay benefit, how often, and gathered their thoughts on if such a service would make them more loyal to their employer or more likely to recommend their employer to other potential employees. The full report is available for download here. Members of the media can request a copy of the full report from [email protected].
CloudPay is the only provider that guides global companies with vision and care toward the comprehensive pay experience their employees deserve. CloudPay connects all employee pay processes – including payroll, payments, and on-demand pay – through a unified solution. CloudPay experts implement best practices, navigate change, optimize operations, and improve employee experiences. For more information visit www.cloudpay.com.