How Pay Apps Benefit Employers
Any good perk an employer can offer its employees only lengthens the time an employee stays and increases employee engagement. In this stiff competitive environment, adding a convenient way for employees to access their pay early only strengthens a company's employee base. One benefit for employers is that the instant pay platform offers a service that minimizes the need for employees to seek short-term lending options, such as those at payday lenders. These institutions prey on hourly workers seeking instant relief from the pressure of bill collectors or the desire for a new car, furniture, bling, etc. When employees know they can access their pay immediately at the end of their shift, they are less likely to borrow at exorbitant interest rates, and therefore are under less pressure and stress. An additional benefit of apps like Instant Financial is that the service only provides a one-hour window at the end of the shift to draw any money, discouraging impulse purchases later in the day.
Several companies using instant pay apps are experiencing tremendous results regarding employee retention. One example is the Caspers Company, owner of 53 McDonald's franchises in Tampa, Fla., that found that its employee turnover rate decreased by almost 10% over the previous year since the company adopted the instant pay app service, according to a recent USAToday article
. And a recent Bloomberg Businessweek piece
reported that employee turnover has also decreased at the company Hoover Foods, since the Wendy's franchisee introduced the Instant Financial app to its employees.
These apps take the burden off the employer because the app provider does all of the work. The minimal fees vary with some companies charging the employee, some the employer, and some both. The good news is that the product has already been tried and tested and is being used by companies such as Chili's, Papa John's, McDonald's, Flemming's, Bonefish Grill, Carrabba's, and Taco Bell with much success. Financially Stable Employees
The way that these instant pay apps work is that they allow employees to request up to 50% of their current day's pay within an hour after their shift ends. Those funds actually go into a debit account the worker can immediately use as needed providing instant cash for the employee to hopefully responsibly use the money wisely. The benefits are enormous, particularly compared to the current alternatives for employees that exist today.
Debt is crippling American workers today and part of the cause is the fact that workers cannot access their earned income when they need it. When employees turn to payday loans or max out their credit cards, it causes stress which creates poor performance on the job. A recent Pew Research report
found that interest from payday loans alone costs Americans more than $9 billion annually, overdraft fees come to another $15 billion, and credit card debt is way over $931 billion! By allowing employees access to their pay early, you provide a platform for employees to control their financial destinies, reducing stress and creating a more engaged workforce.