Does Your Payroll Need A Makeover?
The labor shortage in the US continues to be a significant challenge for most businesses as we recover from the pandemic and settle into the new reality.
The Chamber of Commerce recently released a report that stated that 90% of businesses say it’s difficult or very difficult to find workers right now. As of the October jobs report, job openings reached a high of 10.44 million. Nation-wide restaurant and retail traffic is up 52% since January, and many businesses are reducing hours because of a lack of workers.
As with any challenge businesses face, this environment offers an opportunity for innovative thinkers who are willing to explore new ways to recruit and operate their business. One significant opportunity may be to change the way you currently pay your employees.
What Your Employees Are Saying
Many things businesses do to stand out to fill open positions include offering hiring bonuses, increased benefits packages, and better work-life balance. One overlooked enhancement is Faster Pay.
Recent estimates indicate that anywhere from 56% to 76% of Americans live paycheck to paycheck and contingent workers are in an even tougher spot. When independent contractors were surveyed about their finances, just 15% had enough to cover an emergency expense. The painful disconnect between when bills are due and when they get paid can set off a devastating cycle of debt. Employees and candidates often turn to credit cards, payday loans, and payday advance apps to make ends meet.
The two-week pay cycle has been around for roughly 80 years. It became the norm due to the need for the government to collect social security and payroll taxes. Businesses found that it was more efficient to deduct and calculate taxes every two weeks to have regularity in the process. That was a result of the amount of manual calculation and effort required to comply with government regulations. That was decades ago, and technology exists today to pay people daily and make it simple.
What Should You Do To Modernize Your Payroll
A recent survey showed that 72% of hourly workers and 91% of contract workers want daily or weekly pay.
The problem is that the two-week pay cycle has become so standard that most businesses are unable or unwilling to adapt. But coming out of the pandemic, when competition for workers is so ridiculous, there’s a real opportunity to innovate.
For individuals who have been out of work or hard hit by the pandemic, paying employees daily or even weekly is seen as a significant reward for their work and can be a way to stand out as an employer. Imagine being able to list “Start today, get paid tomorrow” in your job posting. When faced with two similar jobs, having access to your earnings faster is a clear advantage if one pays biweekly and one pays daily.
Every payroll administrator or business owner is going to shudder at the thought of processing payroll daily. It is well worth considering if you are struggling to fill open positions.
