Salary On-Demand: three steps to implement it in your company

Monthly salary payments are a common practice in European companies, for reasons of streamlining administrative processes and enhancing cash flow management. However, numerous countries provide for weekly payment schedules and many organisations assume to receive frequent requests from employees seeking advances on their monthly salary. In fact, according to a survey conducted by Paynest, 28% of employees say they turn to their employer to cover unforeseen expenses.

Despite the frequency of these requests, organisations have yet to adequately prepare their structures for such occurrences. This often results in reliance on manual and time-consuming processes for Human Resources teams, lacking clear criteria for employees. 

From the employee's perspective, approaching the employer for such advances can be uncomfortable. Revealing their financial situation may lead to discomfort, and facing potential rejection of their request could potentially strain their relationship with the organisation.

Facilitating and standardising earned wage access offers mutual benefits to both employers and employees, enhancing productivity, fostering talent retention, and boosting motivation. Implementing this practice in your company is simpler than you might think.

1. Implement an employee response mechanism: Integrate a technological platform enabling employees to promptly request and access the earned salary, either in full or partially. Simultaneously, empower your Human Resources team to manage these requests and reconcile salaries effortlessly. This demonstrates your commitment to assisting employees during critical times while streamlining operations for your HR team.
2. Establish clear and transparent criteria: To build a trusting relationship with your employees, your criteria should be clear from the start. It may be based on various factors, such as the amount the company can allocate for this benefit, the percentage of the salary accessible, and from what point in time, for instance. Once defined, employees will know what to expect.
3. Prepare your employees for this benefit: Providing access to the salary your workers already earned gives them control over their finances. However, it's crucial that they're equipped to manage this income effectively. Assist them in mastering their finances by promoting financial literacy within your organisation. Provide financial education tools such as content on personal finance management, individual and confidential access to a financial coach, and organise workshops dedicated to contemporary financial topics.

Supporting your employees can make a significant difference in their lives, as 36% of workers surveyed by Paynest feel they have gained control over their finances and 71% experience greater peace of mind knowing they can access their earned salary when needed.

Furthermore, your company stands to gain significantly from this solution in terms of performance and talent management. According to Paynest's study, 21% of respondents felt an impact on workplace productivity or focus on the workplace, 29% stated that this benefit improved their relationship with the employer, and 73% expressed a willingness to recommend their employer because of this benefit.

Discover how Paynest can answer to your business needs. Contact us.

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