Financial stress isn’t a new concept for many Americans, but as the pandemic continues into its second year, employees are becoming less enthusiastic about legacy payroll solutions. It’s difficult for most Americans to hold out 2 weeks until their next payday as surprise medical expenses and high living costs compound with other financial stressors.
If employers want to boost efficiency, they must look for an alternative means of delivering compensation to their employees. Consider these benefits to modern payroll solutions.
Stagnancy in Payroll is a Negative
Business owners are spoilt for choice when it comes to digitizing their payroll options, from online form generators to full automation. For example, solopreneurs can fill out a 1099 form online and send it directly to their clients or freelancers without faxing the document.
Despite this, most businesses seem to avoid modern payroll solutions even though advancements in technology make the standard 2-4 week payment schedule obsolete. When the Social Security Admissions department was founded in the 1930s, employees needed a more predictable pay period, but the biweekly structure has remained for almost 100 years.
Essential Work and the Need for Flexible Pay
The COVID-19 public health crisis has made many Americans reconsider the need for flexible pay. Biweekly pay periods often leave an employee struggling with debt, overdraft fees, and dwindling savings as they try to compensate for the unexpected. If a family member contracts COVID, they will be unable to leave their house for work. Despite the fact they must take 2 weeks off to quarantine, employers aren’t required to pay them early to help minimize debt.
Life can come at you fast. Even before the pandemic, Americans were expected to wait, but this has to change. Millennial employees have already brought up this issue and saw no reform. As Gen Z enters the workforce, there will be little excuse to delay flexible pay any longer.
The Many Benefits of On-Demand Pay Technology
Using flexible pay and modern payroll solutions will put your business at a competitive advantage. Nearly 50% of Americans don’t have enough emergency savings to get through a crisis, but quick access to income can turn a stressful situation into a manageable one.
Digital Checks Save Money
Digital checks should become an expectation for most businesses because they’re cheaper, easier to access, and won’t be lost in the mail. 82 Million US workers have experienced paycheck errors that made it impossible to pay rent or utilities on time. Digital checks eliminate that fear. If you need written checks for payroll, keep them for yourself to save on shipping costs.
Real-Time Access Removes Debt Fear
A traditional pay period often falls after rent or utility due dates, yet employers expect their workers to save for up to 3 weeks. Employees want to work for companies that prioritize financial well-being. Investing in financial health creates a less stressful workforce because the fear of debt is significantly reduced. Without this stress, workers are more motivated on the job.
Reduced Turnover Means Less Money Spent on Interviewing and Training
A stressed employee is more likely to take time off, be unproductive, and limit interaction with their co-workers. Employers won’t be able to eliminate all work stress, but if financial stress is a critical component of their worries, a modern payroll solution will improve mood. Happy employees are less likely to quit, which saves you money associated with replacing them.
Payroll Staff Become More Efficient
“Business as usual” may lead to less stress in the near future but will cause an enormous headache when you compound the cost associated with an archaic payroll method. Printing paper, sending checks, and crunching numbers manually will add up quickly. You’ll have to switch to new payroll methods eventually to stay competitive, so it’s in your companies interest to rip off the bandaid.
A digital payroll method can send e-checks instantly and correct check errors quickly. HR roles won’t become obsolete; technology will actually improve work satisfaction for all employees.
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