As American businesses reopen, forward-thinking companies are leveraging on-demand pay solutions to gain an advantage over their competitors and maintain successful operations. This news comes out of a recent study of over one million employees across 10 industries that play a key role in America’s economic comeback.
A new study from the Mercator Advisory Group, “Modernizing Payroll Through Earned Wage Access,” reveals the true transformative power that Earned Wage Access (sometimes called “on-demand pay”), has on a company’s bottom line.
The Mercator Advisory Group examined 10 industries and found that average tenure improved by as much as 73% for workers in nursing homes using DailyPay’s earned wage access solution. These notable improvements vary by industry. Some other industry results highlighted in the research include transportation +68%, call centres +51%, caregivers +27%, and retail +24%.
Longer employee tenure benefits employers in many ways. Employees who stay longer at their jobs are more engaged, more knowledgeable and can execute their tasks more effectively, ultimately providing better service to customers. It also means that employers need to replace employees with less frequency, saving multiple millions of dollars in the administrative costs associated with turnover. It is estimated that the costs range from 1.5 to 2 times the average annual salary of the position needing to be replaced. That could equate to hundreds of millions of dollars each year.
“The cost of high employee turnover is detrimental to organisations of all sizes. Small improvements in employee tenure can make a big difference to a company’s bottom line. Our review of the data comparing employees with and without the benefit of access to DailyPay, clearly demonstrates that earned wage access helps to retain workers,” said Sarah Grotta, director, debit and alternative products, Mercator Advisory Group.
“The findings in the Mercator Study confirm just one aspect of the tremendous value DailyPay brings to our client partners on an on-going basis,” said Jason Lee, CEO and founder of DailyPay. “We’re committed to delivering a comprehensive financial system for all. With DailyPay, companies can hire faster, reduce turnover and deliver a more powerful employee experience, all without changing the way they currently run payroll. We’ve intentionally architected a system that is different from others in the on-demand pay space, keeping the employee experience at the center. When that happens — it is a win-win for everyone.”
Earned-access benefits allow employees flexibility to pay monthly bills or unexpected expenses on their own schedule and avoid payday loans or late fees to make ends meet. A separate DailyPay internal study shows that employees who use the DailyPay benefit save $1,205 per year as 78% say they are avoiding late fees and 70% say they no longer have to take out predatory payday loans.
“Staffmark Group began our partnership with DailyPay in 2020 to give our employees more control over their paychecks, and we now have over 9,100 enrolled in this program,” said Wendy Reiner, vice president – operational processes, Staffmark Group. “Our hope is that by having more immediate access to their pay, they are able to meet those urgent financial needs, which will translate into more satisfied and fulfilled employees – both at work and at home. This recent data shows that our average tenure of employees using DailyPay increased, so we definitely feel that the offering is meeting needs and making a difference in our employees’ lives.”