News outlets are abuzz with wage boosts and bonuses from a few of the companies who most benefit from the recent tax cuts.
Everyone’s talking about wage increases after the latest tax overhaul. Walmart announced that they would raise their minimum wage to $11 and even give out $200–1000 bonuses, even though most companies plan to use tax-benefit money to expand operations rather than increase wages.
The Wall Street Journal recently reported that CVS is following suit with their own $11 minimum wage and incremental wage increases for lower-wage employees. In addition:
"CVS also will offer all full-time employees four weeks of paid parental leave and will freeze employee health premiums for the coming year. About 100,000 workers are enrolled in CVS’s employee health plan.
The moves are expected to cost $425 million a year."
We think wage increases and expanding employee benefits are wonderful. But if other areas of your business need that money more urgently to keep locations open, to keep more people employed, and to keep the ship sailing smoothly, then wage increases might not be sustainable yet. So how can you stay competitive against those who are raising wages?
Offering daily payments or other instant pay perks might actually be even better than raising wages.
HIGHER WAGES DO NOT CAUSE A HAPPIER WORKFORCE
Aside from Can we offer higher wages? is another, less obvious, possibly controversial question: Should we offer higher wages?
DailyPay has done its own study around this topic. In our research on offering daily payments, we posted job descriptions on various online recruiting websites for the identical job in different cities across the US. The only variations were hourly rate and whether or not the job offered the option of daily payments.
We actually found that job seekers were 1.9x more likely to apply for an identical job that offered daily payments despite a 13% lower wage.
BONUSES DO NOT CAUSE A HAPPIER WORKFORCE
In another study, we found that job seekers were 1.5x more likely to apply for a position that offered daily payments and a small signing bonus compared to the identical posting offering weekly pay and a 50% higher signing bonus.
In a review of our current partner company employees, those employees who use DailyPay increased their weekly hours by 11%, and 87% of DailyPay users reported an improved opinion of their employer since adopting our solution.
These findings imply that, for job seekers, control over funds is a very big priority that many employers don’t acknowledge. A flexible instant pay perk like DailyPay is a simple solution to tackle complicated financial situations.
DAILYPAY GIVES PEACE OF MIND, WHICH DOES CAUSE A HAPPIER WORKFORCE
Always having funds available offers the peace of mind that, even four or five days before payday, bills and unexpected expenses can be handled without late fees or non-sufficient fund (NSF) fees. Employees have real-time access to their earnings though DailyPay and can receive any amount from their Available Balance with the click of a button. This can be especially valuable for new hires who might be struggling to get to financial equilibrium.
Posting their daily Available Balance offers an added benefit besides just knowing how much can be withdrawn at a given time. Most DailyPay users are hourly workers with week-to-week variations in their pay, so the Available Balance feature offers up-to-date transparency into their financial situation, which equips them to make more informed everyday spending decisions, even if they never have to withdraw early.
EMPLOYEE TURNOVER MIGHT NOT BE RELATED TO PAY RATE
Writing for Harvard Business Review in an article called “Does Money Really Affect Motivation? A Review of the Research,“ Tomas Chamorro-Premuzic starts with a consideration leading to the problem above, “Does money engage us?” He cites a meta-analysis by Tim Judge and colleagues, which reviewed 120 years of research to synthesize the findings from 92 quantitative studies.
The results indicate that the association between salary and job satisfaction is very weak... Furthermore, the correlation between pay and pay satisfaction was only marginally higher...indicating that people’s satisfaction with their salary is mostly independent of their actual salary.
“But,” some may argue, “there’s a difference between assessing job satisfaction and quality of life.” That’s what we believe too, but you don’t necessarily need to raise wages to increase your employees’ quality of life. Even if you are raising wages, DailyPay is valuable addition to your workforce's financial wellness.
If you’re struggling to stay competitive, DailyPay is a sustainable alternative or complement to wage increases and bonuses. You’ll increase your applicant pool and retention rate. Your employees will actually save, on average, $1,311 per year by avoiding late fees, NSF fees, and high-interest payday loans. And you’ll reinforce the positive relationship between productivity and pay, as employees see their Available Balance grow with every hour on the clock.
To read a more detailed account of our job posting experiment, click below to download our whitepaper.