If you’re reading this article you’d probably be an HR manager that has been caught up amid the whole conversation about the immense benefits that on-demand pay offers and you’re wondering if it’s a must-have for every organization. But the answer truly is that it depends.
As a financial and people’s operation company that has offered solutions to multiple medium to large enterprises, one thing we’ve learned is that HR solutions are not one size fits all. Every organization, including yours, has its peculiarities and the answer to whether on-demand pay is right for you is dependent on these peculiarities as well as your budget and business goals.
In this article, we would be pointing out several factors to consider in deciding whether or not you should adopt on-demand pay in your organization. Let’s begin
Why do I need On-Demand Pay?
Let’s start with why your organization needs any pay. If your organization struggles resonates with any of the issues listed below, then on-demand pay might just be what you need.
1. Financially Stressed Employees
Let’s face it, the problem of an average Nigerian is mostly financially related and this applies to your employees too. If your employees have money issues, there is usually a resulting drastic effect on their performance and productivity. According to a PWC survey, a quarter percentage of employees are distracted over financial issues.
In a bid to improve your employee’s financial wellness, on-demand pay provides a way for your employees to access their salaries even before payday to solve their pressing needs. But by adopting on-demand pay, you’re likely to not have to deal with a financially stressed team.
2. You have issues attracting and retaining talents
If you struggle with filling vacant positions and have to deal with employees leaving your organization now and then, you should consider on-demand pay. With this benefit, your organization has a competitive advantage against large organizations and attracts top talents. Also, with on-demand pay, your employee feels more valued, and as a result, they are more motivated and loyal to your organization.
3. Your employees want to have more control over their salaries
With on-demand pay, your employees have more flexibility in terms of how they manage their salaries, view the amount they’ve earned so far, and can decide what use they want to put in their salary to. Due to the control it gives them, it is normal for them to request it.
Why On-Demand Pay isn’t for me?
On-demand Pay isn’t for everyone and there’s absolutely nothing wrong with that- so no pressure. If you’re still in doubt, here are some reasons why on-demand pay might not be for you;
1. If your organization’s salary schedule is fair
While most organizations pay salaries every month, others pay weekly and if your organization falls under this category, you do not have any business considering this product. The goal of On-demand pay is to let employees access their pay anytime they need it as several expenses might arise before the end of the month. But if your salary payment routine is weekly, your employees are less likely to have money issues given the short timeframe within which they receive their pay.
2. If your employees do not want it
Every employee benefits package is designed specially with the employees in mind. So, as an HR manager, you should try to understand your employees’ needs before adding anything to the benefits package. For instance, you should send a survey to all your employees directed towards their financial well-being and if from the responses you get, there are people with money issues, you could present the idea of On-demand pay to them. But most of your employees disagree, there’s no point adopting it.
3. If your current employee benefits package is impressive
Most organizations have a robust employee compensation package such that employees are less likely to have any money worries and if yours is an organization like that, on-demand pay isn’t for you. If your current employee perks offer more financial benefits and you even have a process through which your employees can take a loan from the organization for emergencies to promote their financial wellness, on-demand pay might not be a must-have for you.
4. If your organization is well-reputed in the labor market
Most medium-sized and new companies adopt on-demand pay as a strategy to attract top talents and retain employees, but if your company is well-reputed in the industry, you do not necessarily need this. Truthfully, there are lots of organizations that neither have on-demand pay nor struggle with employee attraction and retention issues. If your organization is similar to this, you shouldn’t consider on-demand pay yet.
Our final verdict
On-demand pay is an innovative product that has revolutionized how employees access their salaries giving them more control and flexibility. Despite its enviable prospects, on-demand pay isn’t for everyone. In this article, we have been able to point out some important considerations to guide you toward deciding whether or not on-demand pay is what you need right now. If it is, let’s help you get started. If it’s not, you’re welcome to check back for more tips to improve your organization’s people operations.