Employees in the footwear industry have been challenged by store closures and revenue decline, resulting in furloughs, layoffs and reduced hours. But many are now returning to their retail jobs — and need their paychecks more than ever. By providing on-demand access to earnings, retailers can help support their staff for long-term loyalty.
The biweekly pay schedule has come under attack in the past, due to its inflexibility. For instance, employees may need to resort to predatory lending companies to pay bills that arise before pay day.
Now, the pandemic has only compounded the problem: Many retail employees have gone for weeks without paychecks. And though some have now returned to work, family members may be unable to resume their jobs, making them dependent on a single income.
One way that employers can help address the issue is by providing on-demand access to pay. Instead of being paid two weeks’ worth of work at a time, employees have the option to access the money they have earned at any point, such as when an unexpected cost arises.
“Employers assume that they will be taken advantage of if employees are given control over their finances through on-demand pay,” said Jeanniey Walden, chief innovation and marketing officer at wage access solution DailyPay. “Not only does research prove otherwise, but the pandemic also showed that for many workers, on-demand pay was the only financial method to sustain their household.”
According to a DailyPay study, 40% of employees stated that access to their pay motivated them to take on more shifts or work longer hours. When asked how they used this benefit, 94% said to pay bills and 62.3% said it has helped them avoid taking out a payday loan. Employees saved an average of $1,205 a year in reduced fees from loans, overdraft and late fees with DailyPay.
And because employees are only receiving pay for the hours they have already worked, employers don’t need to worry about the cash flow risks associated with advance paychecks. It can even help save costs associated with turnover and recruitment, as wage access can reduce financial stress.
“Pay is at the core of an employee experience, connecting employees to the employer on an ongoing basis,” said Walden. “Having access to your money as you earn it creates a sense of trust and validation. It’s a powerful agreement between two parties — an employer and employee — to return value in response to receiving value.”
For retail, in particular, Walden highlighted the difficulty of managing shift work and last-minute changes. Managers frequently issue incorrect paychecks, which must then be supplemented through off-cycle payments in the form of a paper check — and those can be delayed and are potentially unsanitary during the pandemic.
By implementing a wage solution, employers can provide a digital infrastructure that supports paperless statements and assists with budgeting, through savings and deposit functions. DailyPay also offers a “reward” tool that lets employers and managers compensate staff for a job well done, immediately and remotely.
“There is a critical ‘new world order’ mandate to recognize pay as the most critical element of an employee experience,” said Walden. “A positive pay experience provides a frictionless, digital and rewarding experience at every moment of the employee journey.”