Payroll is one of the most critical functions at any company, as every employee needs to be paid accurately and on time. This important process is rife with delays and errors, however. One-quarter of all workers have experienced paycheck errors, which can be devastating if these individuals do not have savings to fall back on. Because 52% of United States adults say they typically live paycheck to paycheck, any payroll error can quickly result in massive financial hardship.
One solution quickly gaining ground to mitigate these payroll errors is instant payments, where workers are paid immediately after their shifts rather than waiting for a designated pay period. 
This can allow workers to be more financially stable, and companies that offer instant payroll could also enjoy the benefits of reduced turnover and a happier workforce. One study found that employee turnover could be cut by as much as 27% by offering access to same-day wages. Workers are already clamoring for such an option, with four out of five workers in the U.S. believing they should have access to their wages at the end of each day rather than the traditional two-week pay period.
In the latest Expanding Payments Choice Playbook®, PYMNTS examines the ways that payroll can be delayed or inaccurate, illustrates the effect these drawbacks can have on employees and employers, and explores how the use of instant payroll can help businesses of all types by improving employees’ financial security, boosting worker loyalty and reducing turnover.
Around the Payments Choice Space
Financial insecurity is a massive problem in the U.S., especially as inflation reaches its highest point in the past 40 years. A study found that 51% of workers said they would switch jobs if it meant faster access to their wages, with this number jumping to 76% among hotel and food workers. The study further revealed that 30% of workers worry about money while they are working, and even more think they are underpaid relative to the price of goods. Almost two-thirds of respondents said that the price of goods is rising faster than their income, jumping to 75% of customers described as financially stressed and 71% of workers described as financial vulnerable.
Workers are quitting their jobs in droves in what some have described as the Great Resignation, and companies are turning to alternative methods to fill in the gaps. An Onbe survey of more than 650 workers said that hiring freelancers is crucial to ensuring productivity and preventing burnout among remaining staff, but this only works if these freelancers are paid accurately, on time and through the payment method of their choice. Forty-two to 43% of workers said that payment choice is important, but their exact preference varied. Fifty-seven percent of survey respondents said they were paid biweekly and preferred that or weekly pay, while 41% said they identified as freelancers and desired biweekly or weekly pay as opposed to monthly pay or payment upon completion of their contract.
For more on these and other stories, visit the Playbook’s News & Trends.
How Grubhub Leverages Instant Payments to Improve Driver Satisfaction
The gig economy has become an appealing option for many Americans over the past several years, but the life of a gig worker can be challenging when it comes to financial stability. Instant payouts could go a long way toward alleviating these challenges, which is why Grubhub introduced the feature back in 2018.
In this month’s Feature Story, PYMNTS talked with Mrugesh Bavda, product manager for Grubhub, about why Grubhub’s couriers demanded instant payments, and how the company developed Instant Cash Out to met these demands
How Digital Payments Can Benefit Workers and Employers
Financial insecurity affects millions of workers, as 52% of U.S. adults say they typically live paycheck to paycheck. Digital payments can meaningfully help address these potential financial hardships, granting workers access to their wages the moment they are eligible for them, rather than forcing them to wait weeks for their pay to arrive.
This month’s PYMNTS Intelligence explores the financial pitfalls that many workers face with existing payroll solutions and explains why switching to instant digital solutions could not only help support individual workers but also aid employers suffering from turnover issues.
About the Playbook
The Expanding Payments Choice Playbook®, a PYMNTS and Onbe collaboration, examines the ways that payroll can be delayed or inaccurate, illustrates the effect these drawbacks can have on employees and employers, and explores how the use of instant payroll can help businesses of all types by improving employees’ financial security, boosting worker loyalty and reducing turnover.