Instant Payroll Could Cut Costly Employee Turnover
Workers are becoming increasingly frustrated with the slow pace of traditional payroll systems and outdated pay schedules. In today’s super-fast paced economic environment, where many live paycheck to paycheck, this delay can be especially harmful. The wait is even worse for gig workers, freelancers, and contractors, as payment delays can extend beyond standard cycles, jeopardizing their financial security. When unexpected expenses arise between pay periods, the consequences can be devastating.
To address these issues and keep employees happy, employers can provide on-demand payroll options, allowing workers to access their earnings as they accumulate, rather than waiting for a designated payday. This enhanced financial flexibility can improve employees’ well-being, leading to greater loyalty, reduced turnover, and significant savings for businesses by lowering recruitment and training costs.
Our latest “Money Mobility Tracker” highlights how instant payroll and earned wage access can boost financial health, improve retention, and foster stronger employer-employee relationships.
The Struggle of Delayed Wages — And How Instant Payroll Can Help
Waiting for payments is a persistent problem for both employees and contractors. Delayed payments can result in severe financial strain. A recent study of global gig workers, freelancers, and contractors revealed that 58% believe current payment systems are inadequate due to slow processing, high fees, and complications with currency conversions. Additionally, 65% of freelancers reported losing income because they had to turn down cross-border jobs in incompatible currencies. Nearly one-third of respondents waited three to five days to receive payments, and 15% experienced even longer delays.
The Growing Demand for Instant Payroll
Across the workforce, there is increasing demand for instant payroll options to avoid the financial stress of traditional pay periods. According to a PYMNTS Intelligence study, only 36% of freelancers and consultants are paid through instant methods, but 72% of consumers would prefer instant payments if given the choice. Moreover, 78% of consumers expressed high satisfaction with instant payment options, and 22% indicated they would pay a fee for immediate access to their earnings. This willingness to pay can help offset the costs of adopting real-time payroll systems, sharing the financial burden between employers and employees who opt in.
Instant Payments Strengthen Employee Relationships
Offering instant payroll to alleviate workers’ financial challenges can enhance the employer-employee relationship, reduce turnover, and cut down on the costs associated with onboarding and training.
For example, the trucking industry is projected to face a shortage of 160,000 drivers by 2030. To combat this, some companies have started offering instant payments, and the initiative has proven effective in retaining drivers.
A PYMNTS Intelligence study found that 91% of truckers who receive instant payments appreciate the speed and peace of mind it provides. Additionally, 37% of truckers said they would be willing to pay for instant payments, compared to 29% of general consumers. Beyond speed, 75% of truckers cited convenience as a key benefit of instant payments.
About the Tracker
The “Money Mobility Tracker®,” a collaboration with PYNMNTS Intelligence, explores how companies offering instant payroll and earned wage access can improve financial well-being, boost retention and foster stronger employee relationships.
