It’s no secret that employers across all industries are struggling to attract and retain talent right now. In fact, one recent study found that 60% of organizations can’t find the workers they need to meet demand. With nearly 4 million workers leaving their jobs every single month — an all-time high — it appears this problem isn’t going away any time soon.
In an age where companies like McDonald’s are willing to pay workers $21 an hour, money alone isn’t enough to move the needle, as workers have the upper hand in this market.
To get a better sense of what workers expect from employers and their overall thoughts about getting paid, Everee and Checkr recently surveyed 1,060 U.S. workers (both W2 employees and 1099 contractors) for their 2022 State of the Worker Report. One of the most interesting findings was that people are particularly drawn to employers that pay them more frequently.
Favoring Faster Pay
In the on-demand world we live in, many workers are simply no longer willing to wait two weeks to get paid. The research revealed that 55% of workers want to be paid every week, and 24% want to be paid every day. Despite these desires, 54% of workers are still paid every two weeks or even less frequently (e.g., monthly or quarterly).
This discrepancy creates the perfect opportunity for employers to attract workers with faster pay and not miss out on qualified candidates because of outdated pay cycles.
Indeed, the research also found that 34% of workers say slow pay cycles would disqualify an employer from their job search. Similarly, a 2021 study found that speed of pay was the top factor salespeople consider when looking at job opportunities.
At delivery platform Dlivrd (a customer of Everee). CEO Chris Heffernan suggested that his company would lose, or never onboard, at least 20% of its contractors if the organization didn’t offer same-day or next-day pay. Heffernan also explained that his company would have a hard time competing for workers with gig giants like Uber. It’s also worth pointing out that contingent workers typically gig for several companies at a time, so if the wage and work is similar, a faster payday can be the deciding factor for which service gets more of a worker’s time.
In addition, a report on gig workers asked 400 independent contractors what would make them work for one company more than another — 40% said same-day pay, which ranked behind higher wages (83%) and schedule flexibility (58%).
Workers Will Take Less Money for Faster Pay
There are also numerous workers who are willing to trade money to get paid faster. According to Davis Waddell, CEO of Tend, an on-demand staffing platform for hospitality staff — contractors are actually willing to forego 10% or even 20% of their earnings if it means getting paid quickly versus waiting two weeks.
With 68% of workers living paycheck to paycheck, it makes sense that they value a faster payday. By getting paid the same day they work, people can avoid taking out debt on credit cards or high interest payday loans, which would come at a greater cost than a slightly lower wage.
Ultimately, in today’s competitive labor market, employers need to do everything within their power to attract workers and, once on board, encourage them to stick around. In other words, business as usual simply won’t cut it. If you want your organization to stand out and appeal to candidates, you need to get creative and offer something that meets their increasing interests.