62% of employees say off-cycle pay options such as the ability to choose pay frequency, would make a difference when considering a job offer. This is according to the Future of Pay research study by ADP, a leading global technology company providing human capital management (HCM) solutions. ADP surveyed 4,000 employees and 2,900 businesses to explore workers’ perceptions and attitudes towards traditional and emerging pay methods to address some of the biggest human capital management concerns.
The study also reveals that nearly half of employees would pay for early access to earned money at least once per year, and one in five would do so at least once per month. Despite employees’ desire for flexible pay, 70 per cent of organisations think the pay itself matters more than the options offered to their employees.
Speaking about the Future of Pay research findings, Jeff Phipps, Managing Director at ADP UK, said:
“Payment options impact both the employee and the employer. Therefore, the method and frequency of payment have important ramifications; impacting how employees can manage their finances, how they feel about their pay levels, about their jobs and even about themselves and their performance at work. For instance, research from the 2008 book Nudge, by economists Richard H. Thaler and Cass R. Sunstein, highlights that paying employees biweekly instead of monthly leads to people being able to save more, because twice a year they receive three pay checks in the same month.”
“For employers, providing payment options and frequency of pay that reflect the needs of their employees has clear and quantifiable cost benefits. It also helps to improve employee perceptions, financial wellness and productivity.
“Technology has fuelled the growth of a new class of ‘on-demand’ workers who can respond to a business’ immediate needs in hours or even minutes. Despite these tech developments, payment methods and pay cycles are lagging behind consumer technology. Consumers can transfer money and manage finances in real-time, but employer pay cycles, by comparison, moves at a snail’s pace. While there is a wealth of research regarding employee compensation and its impact on recruiting, retention and satisfaction, how employees are paid has been overlooked and undervalued.”
“Payment options, off-cycle payments and financial wellness support can help differentiate a company competing to attract and retain talent. Ultimately when an employer can help employees improve their financial health, everyone benefits.”