As an employer, you need your employees as much as they need you, and it’s extremely important to take care of the people that help operate your business on a day to day basis. Yet, when it comes to offering pay advances to their employees, that's where many employers draw the line - and for good reason.
Benefits like this help people who are in a financial bind, whilst also improving morale and loyalty throughout the workplace. However, pay advances do come with a fair amount of risk and administrative overhead, they cost employers a lot of time and money that most of them simply don’t have. Thankfully, we have a solution for that. More on that later...
If a company is fortunate enough to have the time and resources to provide employees with pay advances, there is still a tremendous amount of risk involved. There will be legal requirements and tax implications, adding more cost to the whole procedure which runs the risk of employees not being able to qualify for the advance, creating a vicious cycle that neither you nor your employees can get out of. Aside from worrying about the money and time, you also need to take into consideration the risk of employees not being able to repay their debts.
When faced with this particular challenge, many will be left with questions such as:
1) If we’re offering advances or loans against future earnings - what happens if someone leaves?
2) How do you adjudicate or decide between different employees and whether you provide these? Do you open yourself up to litigation or accusations of discrimination?
3) Your people are there to manage HR and payroll. Being a loan officer is not part of the job. Right?
As a business, it’s easy to see why you might be reluctant to offer pay advances. In fact, 87% of employers can't or won't give advances because of the risk and overhead involved. From a numbers standpoint, it doesn’t always seem justifiable and a lot of the time it isn’t. For most people, it’s easier to just ignore this problem and hope it doesn’t get in the way of productivity. Unfortunately, when employees do find themselves in financial uncertainty, not only does it affect productivity, but it also affects their mental and physical well-being.
So, how can your business combat these problems without sacrificing time and resources?
As technology moves forward, it makes many aspects of our lives easier. With anything from heating up food to sending money to someone virtually, these advances save us time and let us focus on the important tasks at hand. It’s the same with financial technology. If used properly, these tools have the potential to save an immense amount of time and energy while providing employees benefits that make their lives easier. With something as unforeseen as pay advances, though, it doesn’t completely eradicate the risk. One of the main concerns employers have is if employees will be able to pay their loan back in a timely fashion, or in the worst-case scenario, pay it back at all. This is a problem that has been going on for decades.
The answer here is Wages On-Demand. Wages On-Demand, ZayZoon’s Earned Wage Access service, offers workers access to the money they’ve already earned whenever they want, no more waiting until payday. Wages On-Demand uses advanced technology to instantly send an employee a portion of their pay whenever they need it. This helps cover emergency expenses and fees and will help people manage their money better to avoid going into debt. The advanced technology used eliminates the overhead expenses that are included in pay advances and save your team time by eliminating the administration involved with extra pay runs and traditional pay advance procedures. Giving your employees access to their own money also completely erases the risk involved to your business. Now employees can feel responsible for their own finances and not feel the burden of having to repay a debt.
The idea of Wages On-Demand may seem obvious, you might even think to yourself "Why isn’t everyone doing this?". After all, we work daily, so why don’t we have the option of getting paid daily? The truth is, many larger businesses are. In fact, Walmart began offering Earned Wage Access to its staff more than two years ago. Other businesses such as Choice Hotels and Domino’s have also adopted the ZayZoon Wages On-Demand solution to improve the financial health of their workplace. However, it’s the small and medium-sized businesses that find it especially difficult to administer pay advances in-house, due to the lack of dedicated payroll and HR resources.
ZayZoon focuses on making our solution as easy as possible to use, not just for the employee, but for the employer as well. By creating an intuitive solution for employees that works seamlessly with employers' existing systems we’re able to offer small and medium-sized businesses the same benefits that you might have thought were only available to large enterprises.
So, what are you waiting for?
To learn more about offering Wages On-Demand through ZayZoon, visit: https://www.zayzoon.com/employers
This is part of our 10 Facts on Wages On-Demand series, to see all the existing pieces, click here.