58 percent of American employees are hourly workers, and 70 percent of American workers live paycheck to paycheck. A shocking 40 percent of Americans don’t have $400 squirreled away in case of an emergency. It’s not an easy position to be in, especially when financial crises don’t usually occur on paydays. A car breaks down. Daycare fees. A credit card bill that needs to be paid immediately. When you’re living in a precarious financial situation, a small emergency becomes an insurmountable obstacle. Workers begin missing shifts, which can lead to a job loss. A financial downward spiral begins because you don’t have $50, $100, or $200 at your fingertips. It’s the sad reality for many Americans who don’t have the luxury of PTO or high enough wages to save leftover cash for a rainy day.
A Customer-Based Solution
DailyPay is a vendor that understands this common problem and has created a unique solution to counter it. With this app, that works directly with the payroll system, employees can access funds in advance of getting their paychecks. It also calculates how many hours employees have already worked so they can calculate how large their paycheck will be. It provides motivation to pick up extra shifts to close a gap in the budget, or to save for a goal.
The result is a boost in productivity and morale, leading to less employee turnover. Kym Cross, Senior Director of Payroll at G4S, a global security company that hires hourly security personnel, noticed a rapid reduction in turnover in less than a year since DailyPay was integrated into their payroll system. “We were looking to introduce a DailyPay-like system to reduce our overall employee turnover,” Cross explained. “Most employees live paycheck to paycheck…we were looking at different benefits to offer the employees to give them access to their wages before they were getting paid every other week.” Before using DailyPay, turnover was running at 60 percent, and of that rate, 46 percent of the turnover population has been reduced among DailyPay users. This has especially been a differentiator for applicants and new hires, who may have to wait as long as three weeks before getting that first check.
There was no extra effort that the human resources had to expend, and the benefits have been substantial. Some new finance companies allow employees to receive their paycheck two days in advance, but empowering employees to get the money they earn as they earn it is a bold new step in customer experience.
Letting the Customer Work For You
I spoke to Jeanniey Mullen, chief marketing officer and chief innovation officer of DailyPay, who has spent the majority of her 20-year career on the digital side of marketing, connecting brands to consumers. She was excited to build on her previous experience with a start-up style company with a good head on its shoulders, and DailyPay was the perfect match.
“DailyPay is reinventing payroll, a process that hasn’t changed in a hundred years, and here we are reinventing payroll based on an employee-centric business model,” she told me. Mullen noted the seismic shift in employee habits, from the more traditional model of getting a job with a brand name company with the hopes of retiring with a pension, to a gig-based contract economy that may not even have basics such as health insurance. As a result, the employee is thinking, “is this job right for me?”
Mullen pointed out there was no employee-led reason to do pay day once or twice a month—it’s purely convenience for payroll specialists or HR professionals. DailyPay is all about customer centricity in that it solves a consumer-based problem: getting money right away.
“I believe marketing needs to follow AIR — it needs to be authentic, it needs to inspire, and it needs to be relatable,” Mullen told me. “From a marketing message and omnichannel standpoint, users were taking selfie videos of why they are using DailyPay and sending them to us…The omnichannel marketing strategy is let the customer tell the story.” Muellen understood that a customer-centered product needs a customer-centered story. The message matches the product. It pays to be perceptive. What is the product that you are selling, and what is the best vehicle to tell its story?
Many employees aren’t taking out very much from their paychecks—less than $100 before payday. This paltry amount may not seem like much, but when you don’t have it, you don’t have it, and options are scarce. Many hourly employees wind up getting payday loans, which are predatory with high interest that accumulates daily. This debt is usually added to existing debt like car loans and credit cards, and places an additional burden on employees who are working hourly, possibly minimum-wage jobs. Without that mental and financial burden, employees can chart their own path to financial stability.
When you think of a financial institution, you may imagine a stodgy building, business suits, or, depending on your politics, crooks who were bailed out after a historic but preventable financial crash. None of these images evoke feelings of safety or trust, mostly because none of these scenarios involve a customer. And for so many Americans, financial milestones like saving for college, purchasing a home, and saving for retirement seem farther and farther away. DailyPay’s model places the consumer front and center, updating an antiquated system and placing the consumer in control. The younger more flexible consumer, who is just beginning their career but have financial obligations, expects brands to cater to their lifestyles, and brands are showing that they are listening.