“Ultimately, offering a real-time payment solution is a powerful way to strengthen the bond between enterprises and their employees while saving organizations time and cost. Choosing the right vendor will ensure that enterprises can offer this exciting new benefit (and reap its rewards) without compromising on security,” says Jason Lee, CEO Of DailyPay, in an exclusive interview with EnterpriseTalk.
ETBureau: What are the current drawbacks in the existing payroll and HCM platforms?
Jason Lee: Unprecedented developments in technology have enabled employers to leverage new tools to improve transparency, efficiency, and accuracy seamlessly.
One example of how businesses have utilized technology to realize these goals is data management. It didn’t take long to clarify that employee data could now be largely consolidated, updated, and shared instantly with stakeholders in HR, payroll and finance, and the employees.
This created visibility that allowed for the emergence of employee self-service tools on a company’s intranet, which resulted in dramatically reduced administrative staff time and increased accuracy. Much of the data employees need to see are available with a few mouse clicks, and personal information they enter themselves directly.
The employees become empowered when they can, for example, change their direct deposit without having to leave their workstation, or now, use their mobile device to modify how and when they receive payment.
ETBureau: What steps can Employers take to increase employee engagement and forge a stronger relationship with their employees?
Jason Lee: Employers can increase employee engagement and forge a stronger relationship with their employees by giving them choice and control, especially over their pay.
Payment has traditionally been associated with a transactional effort. But enterprises, if take necessary precautions, can use it as a strategic lever for cost-savings, efficiency, and optimize productivity. At the same time, they are providing employees with the confidence to feel financially secure.
The traditional system of waiting two or four weeks to get paid isn’t a feasible option anymore. The pandemic emboldened many enterprises to reevaluate and consider offering an on-demand pay benefit to their workforce who couldn’t wait for their payday to buy life-saving supplies, from hand sanitizer to medicine. With this new benefit, employees have a choice to access their earned pay as they need it and exercise total control over their household finances.
With access to pay on-demand, employees feel more connected and valued at work and become more productive while on the job. Research shows that over 80% of employees report that their job satisfaction has improved since the company offered on-demand pay, with 59% citing they are more motivated to go to work, resulting in reduced absenteeism. The research also indicates that companies that provide on-demand pay average a 50% reduction in turnover and can fill open positions advertising on-demand pay in half the time.
Employees with an on-demand pay benefit, on average, save $1,205 per year, as 78% say they are avoiding late fees, and 70% say they no longer have to take out predatory payday loans. With more financial flexibility, they become less stressed at work and more engaged and productive.
ET bureau: How can enterprises integrate real-time payment solutions without compromising on their security?
Jason Lee: Integrating real-time payment solutions at any organization saves them time and cost while empowering its workforce. But it’s critical to ensure that its chosen payments solution does not incur reputational or regulatory risk.
Most real-time payment solutions will require some data collection in order to provide their service. To minimize risk, enterprises must seek vendors with strong security credentials such as SOC 2 Type 2 certification and/or ISO 27001 certification. Some vendors also leverage advanced anti-fraud technology to protect their customers’ security and accounts.
While evaluating on-demand pay providers, it is also prudent to investigate how the vendor calculates a user’s Available Balance. Some vendors have smart technology that is able to calculate an employee’s Available Balance using payroll files or algorithms.
But some other providers, without such technology, often rely on GPS tracking to ensure an employee is going to work in order to provide a pay advance. If an employee’s GPS data were to be breached, this could invite reputational harm to an enterprise.
Ultimately, offering a real-time payment solution is a powerful way to strengthen the bond between enterprises and their employees while saving organizations time and cost. Choosing the right vendor will ensure that enterprises can offer this exciting new benefit (and reap its rewards) without compromising on security.
Jason Lee is a fintech entrepreneur and the Founder and CEO of DailyPay, the current market leader in the on-demand pay software sector.
A financial engineer by training, Mr. Lee spent nearly two decades on Wall Street, creating numerous new products and markets to manage risk areas. In 2015, he disrupted the payroll’s calcified world by launching a start-up that grew into a premiere enterprise software company that promotes financial wellness.
He leads DailyPay’s Management Committee and serves as Chairman for the Board of Directors.