What did you think when you first heard about on demand pay?
When I first heard about the concept of on demand pay, I thought the flexibility aspect would really resonate with our people.
We’ve been approached about emergency loans in the past when an employee has needed it and it’s always a really tricky situation. I think on demand pay is less risky to the company, as it pays the employee money they’ve already earned, rather than a loan. It’s also less embarrassing for an employee who may find themselves in a situation where they need access to emergency cash, but are reluctant to ask, it’s adding to that already stressful situation. It’s also much cheaper than accessing credit, which is probably the most likely scenario if on-demand pay wasn’t available.
Did you have any concerns?
I did have some initial concerns around whether people would fall into a cycle of dependency on a service like this, especially those who may have financial issues. I was also concerned that people may withdraw too much money during the month and not have enough left to pay their bills.
Another concern was whether there would be any complications around people leaving the company, being off on long-term sick or even going off on maternity leave. We wouldn’t want our employees to be in the position of owing us money that we’d need to recoup.
What has been the reality of introducing on-demand pay?
The reality is that we don’t see people depending on on-demand pay in a negative way – around 20% of employees are using the service in any one month, and on average people are using the service once to withdraw around £100.
As an employer, we also have the ability to control how much we allow people to withdraw, and exactly who has access. So, if we needed to limit access for an employee for any reason that’s really easy to do and knowing this alleviated those concerns.
It’s been very well received by our people. We include EarlyPay as part of our Welcome Event for new starters and it goes down really well. Most new starters are really eager to use the facility, especially those who’ve left their previous job part way through the month or have missed the payroll cut off date. It’s been a really helpful tool to help bridge the gap between paydays.
To other HR professionals thinking of offering on-demand pay, I’d say if it works better for our people to take their money in chunks throughout the month, then why wouldn’t we support that when it’s so easy to do!