By now you have probably seen at least one or two ads describing the benefits of an advance pay mobile app. Such ads typically feature millennials describing how they have access to a portion of their pay just by bringing up their smartphones and tapping a few times. If this seems revolutionary, it is only so in terms of the technology. The principle itself is actually nothing new.
The time for advance pay has come. This post will discuss why. Before getting to that however, it is important to note that the system we are all used to is relatively new. It is a modern invention. In times past, people used to get paid daily for their labor. They did not wait until the 17th or 18th of the month to be paid for labor they performed on the first and second of the month.
Advance pay is one of many different ways companies can pay employees. It allows employees to decide when to get paid by giving them access to at least a portion of their wages during the period between paychecks. It generally costs employees nothing extra to do so.
The On-Demand Economy Demands It
We live in the age of the on-demand economy. You can pick up your smartphone and, within a matter of minutes, have a car waiting outside your home to take you to the airport. You can buy your groceries online and have them delivered to your door. You can even visit with a doctor or lawyer on-demand.
All of this is to say that younger workers are used to the on-demand concept. It is what they were raised on. It is no surprise that they would appreciate on-demand pay as well. Giving them access to already earned wages through a mobile app is in perfect alignment with most of the rest of their lives.
Online Payroll Makes It Possible
Businesses transitioned away from daily and weekly pay to semimonthly and biweekly as a matter of efficiency. In other words, it is just more efficient to process payroll less frequently. But things are changing thanks to online payroll and automation technologies.
Increased efficiency now makes it easier than ever to process payroll. For example, automated time and attendance solutions eliminate the need to work with manual timesheets and calculations. Direct deposit eliminates the need for printing and distributing checks. Processing payroll in the cloud eliminates data entry overlap and keeps all interested stakeholders on the same page.
According to BenefitMall, the end result is a new payroll environment that is equally efficient regardless of how often employees are paid. Inefficiency is no longer a viable reason to force employees to wait 15 to 20 days to get paid.
It is Their Pay
Ultimately, the most important factor behind advance pay is the simple fact that the money employees have access to is their money. Forcing them to wait 15 to 20 days to get paid is denying them access to what they have earned merely for the convenience of the employer. Workers understand that, and they are increasingly unhappy about it.
It might very well be true that most consumers do not want daily pay. However, a growing number of them want access to advance pay programs that allow them to access their earned wages when they need them.
The time for advance pay has come. If current trends are any indication, advance pay programs will be standard fare within a couple of years. Both employers and payroll providers are gradually getting on board with the concept.