Most employees have never questioned their pay cycle.
Instead, workers simply accepted that in most workplaces, they get paid once a month, or once a fortnight.
This no longer needs to be the norm – advances in financial technology now allow businesses to offer real time pay.
Why should employees have to wait for days or weeks to be paid?
Most industries have advanced over the last few years. Amazon deliveries are faster and more practical than ever. Netflix streams thousands of films and series to whoever, whenever. Even mobile banking has advanced to the point where you can send money to your friends and family in seconds.
So why isn’t payroll using instant real time payments from employers to employees?
Gen Z and Millennials expect on demand pay
On demand pay is now expected from Gen Z and Millennials. These generations were born in such an innovative time, despite suffering more than others from high rates of redundancies, pay cuts and reduction in scheduled hours.
A recent study found that over half of all employee’s experience trouble covering their expenses between pay periods, and one in three workers run out of money before payday.
Employees, unable to last between pay days and tired of turning to high-interest loans to bridge the gap, want to access their hard-earned money as and when needed.
Already the potential of real-time pay is recognised, and in some cases, companies are using it to differentiate their brand and attract new talent. Many payroll professionals agree that on-demand pay is a must-have solution for improving the employee experience.
Employers don’t like on demand pay
One issue associated with on demand pay is that it requires ‘more work’ for already busy payroll teams. The big benefit for employers using a monthly payroll scheme is financial savings and how they need fewer resources to run payroll just once a month. Monthly pay can make sense for managing a business’s cash flow. Delaying employees’ earnings means companies can use the money to help the smooth running of their business.
However, receiving a large sum of money only once a month means employees must be disciplined to make it last, especially during a cost of living crisis.
Budgeting for 30 days can be challenging, especially when unexpected events or expenses come up.
If a business switches to real time pay, they will receive benefits through a happier and more productive workforce as poor financial wellbeing can have a damaging impact on a workplace and morale.
On-demand pay can help create better financial habits and provide a much-needed boost to employees’ financial wellbeing.
A report found more than three quarters (77%) of employees say that money worries impact them at work. On-demand pay can alleviate financial stress, resulting in a more motivated and productive workforce.
IGsend
IGsend from Income Group enables payroll teams to make instant payments 24/7, 365 using Faster Payments. It gives the control and flexibility to pay employees whenever required within your payroll timetable. It’s easy to use, secure and futureproof. People no longer need to struggle paying bills and getting themselves into payday loans as the payments are instant. IG send can strengthen the trust between employees and employers to improve financial and mental wellbeing. It allows you to set your own payroll timetable to increase capability.
