On average, companies see 41% reduction in employee turnover for daily pay users. Learn more about what home care agencies are saying about daily pay and how its improving their recruitment and retention efforts.
With 78% of all Americans living paycheck-to-paycheck, businesses that offer financial security and wellness are becoming more and more appealing.
You may have noticed gym memberships, maternity and paternity leave, unlimited paid time off, paid volunteer time and dozens of other employee benefits popping up on job descriptions. With the competition for recruiting caregivers being higher than ever, offering daily pay could be a solution to begin increasing your employee turnover by up to 40%.
Bi-weekly payroll is typical in our industry along with nearly every other industry, but is being challenged by new options such as daily pay. Early adopters, such as BrightSpring and some Visiting Angels locations, have taken the leap and begun using daily pay for their employees. “It is not uncommon for a home healthcare company using DailyPay to see 30% to 50% of its caregiver population enrolled in this benefit,” said DailyPay CEO Jason Lee.
In keeping with our efforts to update home care owners on the most important trends, strategies, and best practices, we’ve summarized some of the most important information about daily pay for you here. While it may or may not be the right choice for your individual agency, this trend is on the rise, and early adopters are already gaining an advantage.
What is daily pay?
Daily Pay is a technology solution that allows your employees to control when they get paid. Employees can choose to access their available funds in real-time, allowing greater financial flexibility to employees living paycheck-to-paycheck.
Before we dive too far in, let’s hit on a couple common concerns. No, you don’t have to change your payroll schedule—pay that is claimed by a caregiver before the regular bi-weekly payday is handled through a reliable third party service, so your staff’s involvement is minimal. And while it does require healthy cashflow, it’s typically not a significant drain financially overall because of its relatively minimal cost. We’ll talk about these more below.
What are the benefits of daily pay?
Provides daily access to available funds for employees living paycheck to paycheck.
1 in 4 caregivers is living below the poverty line. Caregivers are disproportionately likely to come from lower-income demographics, be single parents, and/or work multiple jobs. These individuals and families all too often must face the harsh reality of living paycheck to paycheck.
A program offering daily pay may seem unnecessary or “too much work” from the perspective of an agency owner, but this type of program could be a financial crutch for people in difficult financial circumstances.
Daily pay providers handle logistics – No changes made to your payroll process.
We know the thought of increasing weekly or biweekly payroll to daily payroll sounds like an absolute nightmare. We get it. Why would anyone do that to themselves? Fortunately, daily pay providers handle nearly 100% off all the maintenance and software provided making no change to your payroll process.
Regarding cost, most daily pay providers charge a transfer fee that can be paid by either the employee, the employer, or a subsidized cost from the employer to the employee. Some providers charge a monthly subscription fee – we’ll go more in depth in the ‘How to get started with daily pay’ section below.
Improve recruitment and retention.
On average, companies see 41% reduction in employee turnover with daily pay . Recruitment and retention are one of the number one issues home care agency owners are faced with year over year.
The industry-wide demand continues to increase for caregivers, but the supply seems limited and difficult to find let alone retain. Daily pay could be a missing piece of your “benefits offered” to earn a competitive advantage in both recruitment and retention.
Daily pay presents itself as an added benefit to bring employees on-board, but also as a motivator to get them to stick around. 73% of daily pay users say they are more motivated to come to work. Daily pay can improve productivity and engagement. spend three hours or more at work each week thinking about or dealing with personal financial issues. As an employer, you have the power to remove the cause of your employee’s financial stress and allow them to focus more at work.
Who provides daily pay? Does it integrate with my payroll system?
Daily Pay is a simple add-on to your existing payroll platform. Employees receive access to their earned but unpaid wages instantly. There is no cost to your company for the technology or services, only a transfer fee is required by either the employer, employee or subsidized from the employer to the employee.
Branch App allows your employees to budget their paycheck and instantly access their earned wages before payday comes. Inside the free app, employees receive aid in budgeting, while receiving instant access to funds and growth opportunities when presented with additional shifts. Branch App is free to use, the employer or employee only has to pay transfer fees.
Even provides employees with an app that helps them plan, spend, borrow and save. The app links with the employee’s bank account and gives them budgeting advice, allows them to get paid on-demand from the employer and provides incentive to the employees to save money by setting goals for rewards. Even can be completely free to the employer or subsidized to your employees.
Payactiv gives employees instant access to earned but unpaid wages and allows employees to make bank transfers. Payactiv does not require employees to have a bank account. Employees also receive Rx discounts, financial counseling, and a financial savings tool. Like the other platforms mentioned here, Payactiv has no recurring cost to the employer, only a transfer fee that can be an added benefit from the employer or subsidized to the employee.
How to Recruit and Retain Caregivers When You’ve Already Tried Everything
How to get started with daily pay
Need to have the necessary cashflow
Need to meet number of employee requirements (set by each platform)
Request a demo with one of the daily pay providers we’ve listed to learn the details
Begin integrating the app/software with your business
Decide if you want the added benefit of paying for your employee’s transfer fees (on average, $0-$5) or if you want your employees to pay for it, or if you want to subsidize the cost
Advertise daily pay as a benefit in job postings and recruitment efforts
While this is an important tool that’s worth looking into, ensure that this the right step to take before jumping, so that you don’t have to withdraw the benefit down the road for some reason. Withdrawing a benefit once it’s offered can sometimes be more damaging than not offering it in the first place.
That said, we’ve talked to agency owners around the industry who understand these drawbacks and still describe daily pay as a secret weapon when it comes to being a competitive employer. Ultimately, deciding whether or not daily pay is right for your agency is in your hands.
Offering daily pay is just one example of the technological software and practices that could help improve the future of home care recruitment.
“Companies that suffer high employee churn will understand the emotional and financial investment incurred in sourcing and hiring an employee, only to lose them within six months. Having to start the entire process over again causes huge delays to productivity of the affected team, especially if there are inefficient systems or processes in place.” Analyzing basic processes such as payroll may seem like a waste of time in the beginning, but could in fact help your organization strengthen its employee recruitment and retention greatly.
Spend time learning more about daily pay and other technologies agencies are using in our industry. Automating processes can save time and money that is precious to your business and your clients.
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