Fourth Payroll Expert Piers Lambert Discusses How Employers Use On-Demand Pay to Meet Employee Needs
A recent Gallup poll found only 22% of employees feel engaged in their work, a concerning sign especially within the hospitality, hotel, leisure and retail industries already experiencing high turnover rates. Businesses looking to reverse this trend can offer employees valuable benefits aimed at filling open positions and incentivizing longevity.
One of these options, On-Demand Pay, allows employees early access to their earned wages, resulting in greater financial flexibility. We talked with Piers Lambert, Fourth’s Workforce Management expert, about the business impact of this benefit.
Annual turnover across the US hospitality sector came in at 86% in 2021, the highest across all industries. For retail, it was a noteworthy, 65%. To put both into context, turnover rates averaged 47% for the year across all US industries.
Employee turnover at any level results in lost productivity and increased rehiring costs, including the hours operators must dedicate to candidate interviews and onboarding. These costs average 33% of a worker’s annual wages.
On the operations side, having too few employees cuts into available throughput ( 68% of restaurants had to reduce hours of operation due to employee shortages), and more responsibilities get piled onto those who remain. This increases burnout, further exacerbating turnover.
On-Demand Pay is a growing trend in the hospitality industry that is quickly becoming a key differentiator among employers as they try to attract and retain staff.
Fuego is Fourth’s an On-Demand Pay app tailored to hospitality and service workers, granting early access to the money they’ve already earned. Fuego comes at no cost to the employer and is easy to integrate using the existing HotSchedules setup.
Employees can receive earned wages before payday, avoiding predatory practices common among payday loans. Drawn wages are simply deducted from the employee’s net pay, same as any other benefit.
Fuego funds the early wage access draws, and the employer reimburses Fuego as part of payroll processing. The employer does not have to fund these.
On-Demand Pay is a great way for businesses to attract and retain talent, reduce turnover and lower absenteeism. With more than 3 in 5 workers concerned about getting into or out of a debt cycle, early access to wages helps combat financial stress levels and makes for happier employees. Research shows that 79% of employees would switch to another employer that offers On-Demand Pay access.
Fuego clients are experiencing 30-70% employee adoption of On-Demand Pay due to the seamless integration within HotSchedules.
Here are a few key operational benefits:
Only Fuego seamlessly integrates with HotSchedules to provide employees a view of their schedule, open shifts, earnings potential, and access to earned wages on their timeline.
Since Fuego is fully integrated with HotSchedules, it can be turned on with no additional technical lift, and a couple of hours of your payroll team’s time.
Finding ways to further engage your workforce while still controlling costs has become essential to overcoming the labor shortage. To learn more about how Fuego can help your business better attract and retain talent, schedule a demo with us.
Give us a call today +61 2 9044 8114, or click the button below.