It’s no more news, and it is not a matter of which company is adopting real-time salary access (also known as on-demand pay). Instead, it is a question of how many businesses have adopted the system already.
Real-time salary access is a payment system where employees can access the money earned before the scheduled payday. More employers are considering the real-time salary option to benefit their employees, who prefer flexibility in how they are paid. Real-time salary access has proven to improve the retention rate of employees in an organization. A survey done by PwC shows that real-time salary access increases employee retention by 36%. Employees tend to stay with organizations that allow real-time salary access regardless of the industry.
Benefits of real-time salary access for employees
Let’s look into the story of a 35-year-old marketer who works with a famous real estate company in Lagos. He loves his job, but he also knew that owning a car was important for him to get around. So, with the help of some supportive friends, he was able to save up enough money to buy a car.
However, after purchasing the car, he found himself struggling to make ends meet for the rest of the month. He had used up all his savings and couldn’t wait until payday to cover his expenses. In the end, he had to take out an overdraft from his bank, which he planned to pay back as soon as he received his salary.
Although he was able to pay back the loan with interest when payday arrived, he was left with very little money for the rest of the month. He knew he couldn’t keep taking out overdrafts every month.
Luckily, that same month, the HR department at his company introduced a new perk called on-demand pay, also known as real-time salary access. As soon as he heard about it, he was sold! He could now withdraw part of his salary for the days he had worked without having to wait until the scheduled payday. No more overdrafts for him!
Workers embrace on-demand pay option
Many workers fall into this trap and will readily welcome the idea of real-time salary access. Many workers will prefer to work with businesses that provide a flexible payment system over those that use the conventional monthly salary system. With access to their earned income, employees can close the gap between their paydays, avoid taking loans and be able to pay their bills on time. They will also have the opportunity to tend to unexpected expenses, such as car repairs and medical bills, and in turn, this will help improve their financial wellness.
Benefits of real-time access for businesses
Let us take a ride back to the story of the real-estate marketer who had a financial issue after getting himself a car. The real estate company he was working with was also affected in one way or the other. With his financial worries, dedicating adequate attention to his work cannot be achieved. He lost a client in two months as he could not meet his ends with this client. He sometimes gets lost in conversation, and on one or two occasions, he could not be right on schedule with meeting with this client. He was lucky he didn’t lose his job, but he lost a deal worth millions of naira, and that’s a loss for his employers.
It is important to see your employees’ financial wellness as an employer or a business. Financial wellness is a person’s overall financial health, and it is essential to an employee’s well-being.
According to a 2020 survey on employee financial wellness carried out by PwC, a quarter of the employees are distracted in work over personal financial issues. Of those who responded to the survey, half stated that they spend between an hour and three thinking of ways to solve these financial problems. Financial stress by employees will not only reduce the business’s productivity but also lead to high levels of absenteeism and lower levels of pay satisfaction which could lead to stealing at the workplace.
Offering real-time salary access to employees will help:
- Increase the number of applicants to the company for jobs.
- Reduce the level of employee absenteeism.
- Increase the ability of the company to fill up open positions faster.
- Increase the average employee productivity.
- Reduce the turnover rates.
Ways businesses can implement real-time salary access and benefit from it
Many businesses are now embracing real-time salary access for their employees. But still, many businesses are facing challenges in implementing the payment system. With third-party services like Earnipay, businesses can register for their on-demand pay product and bring their employees on board to enjoy flexible payment. With this system, employers do not need to endure the stress of adjusting their employees’ payrolls. All they need to do is to upload the payrolls on Earnipay and let Earnipay handle the real-time salary payment. The employer can pay the minimal transaction charges on each withdrawal the employee makes, decide to make it a 50-50 or make the employee pay for the transaction charges for every withdrawal they make.
The introduction of real-time salary access has many benefits, and many businesses are already adopting this system to help their businesses grow. In more years, it is predicted that many companies will adopt this payment system.