Why it is critical to care about your employees’ financial wellness

By Mark Heymann

As every hospitality leader tries to address declining employee satisfaction, one simple way to think about the problem is to spend two weeks in their shoes. Why two weeks? Because that’s typically the time frame that an employee is waiting for another paycheck to arrive, and those 14 days can feel like an eternity. According to research from PYMNTS.com, 125 million adults in the U.S. are living paycheck to paycheck. For hotels and all service-related businesses, what needs to change is clear: It’s time to eliminate that waiting period by allowing employees to have early wage access or instant pay, offered by a number of financial institutions and software companies.

With instant pay, workers can see their earnings in real-time based on time and attendance data, and they can get up to 50% of their earnings before their scheduled payday. So, suppose a member of your banquet team is trying to balance their bills. Rent payment is due next week, and an unexpected car repair must be paid tomorrow. Instant pay can play a role in making those immediate costs feel less overwhelming. By giving your employees the ability to use their funds earlier, you can help them avoid the stress of looking at an empty checking account. More importantly, you can help them steer clear of costly solutions to those small account balances like payday loan services that prey on distressed workers with excessively high fees.

Consider some of the other successful companies that have broken up with the traditional payroll system: Uber, Lyft, Instacart and Grubhub all offer the ability to cash out money on the same day it’s earned. A recent survey from the American Payroll Association shows that 25% of workers want on-demand access to their wages. As inflation eats away at earnings, that number is only poised to rise in 2022.

Instant pay helps the employer’s bottom line as well
Offering instant pay does more than respond to what employees want. It also pays dividends for the employer. Consider these findings from employees who have been able to use one of the instant pay providers available to the hotel industry:

  • Nearly 90% said they were more satisfied at work after beginning to use the service.
  • More than 78% said they were less stressed, which helped fuel more productivity.
  • More than 77% said that instant pay benefits made them more likely to refer friends to the job—helping alleviate the pressure of hiring teams to post jobs and find more candidates for open positions.
  • More than 68% indicated that they had been accepting more open shifts and arriving on time at a higher rate after being able to use instant pay.

All those data points add up to one crucial fact: instant pay also delivers enduring benefits for employers.

As the industry continues to struggle with labor shortages, helping your employees access funds quicker might be the defining factor in their decision to stay or join your team. It is time to put two-week pay cycles in the past and embrace the instant pay model.

Mark Heymann is CEO of UniFocus, a provider of workforce management software.

This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.