As coronavirus restrictions are slowly eased, on-demand pay solutions are helping quick-service restaurants rebuild and retain their workforces.
In cities across the country, shelter-in-place orders largely restricted restaurants to take-out and delivery services in an attempt to flatten the curve. Without in-person business, many franchise owners were forced to lay off workers, while others doubled down on their takeout and delivery capabilities.
Workers fortunate enough to still have jobs, however, faced additional challenges of their own. Unexpected expenses—like surprise coronavirus-related medical bills, abnormally high cell phone charges or the loss of income from other household members—quickly cropped up, creating a family need to use on-demand pay as a financial bridge. And as families across the country rushed to stock up on groceries and medicine, many quick-service restaurant workers found shelves bare when they went to the store on payday. For quick-serve owners, employee stress translated to unanticipated absences, lowered productivity and health risks as employees struggled to make rent and bill payments.
Although the road to recovery will be long, restaurant decision makers can help alleviate some of the immediate financial strain by giving employees on-demand access to earned compensation, in turn setting restaurants up for smoother re-openings and long-term resiliency.
The antiquated pay system has been pushed past its limits
The traditional system of paying employees after every two or four weeks worked dates back almost a hundred years, when the founding of the Social Security Administration in the 1930s necessitated more predictable payroll periods. Since then, the biweekly pay period has become so institutionalized, it’s essentially ingrained in our work culture. While other systems have benefited from advances in technology over the years, pay processes have remained woefully stagnant.
For many working Americans across income brackets and industries, this outdated pay system falls short when unexpected expenses or life events occur, requiring early access to pay that’s already been earned. Americans have finally seen the widespread need for flexible pay as hourly and essential workers were catapulted into headlines in a long-term, unprecedented emergency around the country. Traditionally, the options to cover unexpected expenses included maxing out credit cards, withdrawing savings, incurring overdraft fees and resorting to payday loans—all of which can bring high interest rates, fees and penalties.
Until recently, no one has thought to reimagine how employees access and manage their pay. Times and expectations have changed though, especially among younger generations who grew up in an on-demand world. Now that Americans can do just about anything with a tap of a smartphone, they’re demanding similar on-demand benefits across all areas of their lives—and that includes the way they’re paid. Given the stressors of the pandemic, workers don’t just prefer more flexible access to pay, they need it. While change might sound daunting, quick-service restaurant leaders should embrace these expectations because flexible, modern earned income solutions benefit both employees and employers.
On-demand pay technology can help rebuild the quick-service workforce
As economies begin to reopen, restaurants will start bringing back workers—many of whom have been hit hard by the economic downturn. On-demand pay solutions, which cost nothing for restaurants to implement and seamlessly integrate into any payroll system, can benefit both parties for a number of reasons:
Competitive edge: Many quick-serves will begin restaffing at the same time, increasing the competition for top talent. Providing early access to earned pay can be the differentiator a brand needs to attract potential candidates over its competitors. This option will be especially enticing to workers who don’t want to wait two weeks before they receive their first paycheck. In fact, a recent survey found that one out of six people looking for a job are now seeking an employer who offers an on-demand benefit.
Retention: The financial flexibility afforded by on-demand pay technology can increase retention, which has reached crisis status in the quick-service industry. With turnover rates as high as 130-150 percent, any reduction in turnover directly translates to cost savings in recruiting, uniforms and training.
Growth: Providing your employees with early access to their earned pay helps rebuild broken trust and shows you’re invested in their personal and financial growth. In a recent DailyPay survey, it was found that on-demand pay technology helps employees avoid late fees and predatory payday loans, and enables them to use wages to pay off bills and increase savings. When you invest in your employees’ financial well-being, they’re more motivated to grow in the workplace as well.
Productivity: The economic strain that the coronavirus has put on most Americans will likely continue after employees return to the workplace, resulting in lowered productivity and higher absenteeism. In our recent survey, 90 percent of respondents said having access to earned pay during COVID-19 reduced their financial stress. Financial flexibility brings peace of mind, keeping workers more engaged, focused and satisfied on the job. And the more engaged employees are with their work, the better the customer experience they deliver.
On-demand pay is here to stay
Zero-cost on-demand pay solutions can help quick-service restaurants better recruit, reward and retain employees coming back to work, while increasing productivity and customer satisfaction. Employers that implement these technologies now will be better-positioned for the future of the restaurant pay process. Not to mention that providing access to earned money creates a sense of trust and validation between brands and their employees. And in the same way that many office employees want to continue working remotely even after the pandemic, restaurant workers won’t want to go back to the outdated biweekly payment system.
Jeanniey Mullen the Chief Innovation and Marketing Officer at DailyPay. She is an award-winning, entrepreneurial Chief Marketing Officer who uses innovation to transform the way companies work to accelerate growth and brand impact. Jeanniey has led global Marketing and Growth for Fortune 1000 companies, including Mercer, Ogilvy, Barnes & Noble and JCPenney, as well as industry-transforming start-ups, including Zinio, RebelMouse and Ringblingz. A recognized “Woman in Business” and an entrepreneur, she has authored multiple books and launched five companies, including the Email Experience Council. Jeanniey holds a master’s degree from the University of Pittsburgh. Jeanniey is a member of the Management Committee.