This digital platform can improve crew finances and employee retention.
When we talk about labor in the restaurant industry, wages are an inevitable part of the conversation. While operators may offer one-time perks—like sign-on bonuses or cash rewards doled out after a certain period of employment, or reward employees with ongoing benefits, like discounts or free meals—today’s workers are looking for permanent solutions more than temporary fixes.
Most often, this means higher pay. But allowing employees to collect earned wages how and when they want can be an equally effective—and yet often under-used—strategy for bulking up employment and improving retention.
“Restaurants are continuing to grapple with an unprecedented labor market, meaning that standing out and evolving your business practices are really important,” says Andy Garner, senior vice president and general manager of business partnerships at Netspend, a Global Payments company “A fundamental shift is happening in regard to how people are being paid, and earned wage access is a big part of this.”
The idea behind on-demand earned wage access is simple. Employees can decide when to draw wages they’ve already earned instead of waiting weeks for a scheduled paycheck. While offering earned wage access does not increase the amount that an employee is paid, it does allow that employee to leverage their already earned wages to align with crucial bills and expenses. If staff can withdraw earned pay exactly when they need funds, they can improve their finances overall. A payment made on time can make an instant difference in credit scores and other key financial health metrics.
Netspend’s Earned Wage Access platform and mobile app make it easy for operators to leverage the benefits of on-demand pay. The brand’s user-friendly app allows employees to digitally access earned wages and transfer them to their preferred financial account.
“The employees work, they earn money throughout the week, and then our intuitive app allows access to those wages prior to the predetermined or standard payday,” Garner says. “Our platform connects with the employer’s time, attendance, and payroll systems to access and transfer those wages. Then the employee can choose how they want to transfer their funds: to our payroll card, a bank account, or debit card.”
The platform arises in the face of a variety of dire financial wellness needs reported by wide swaths of the current labor force. According to Netspend data, nearly 60 percent of hourly workers say they feel financially insecure; 50 percent of workers say that their financial situation disrupts their work; and 65 percent of workers are more likely to run out of funds prior to their next paycheck when paid via cash or check.
These issues affect not only employees, but also operators, managers, and CEOs. A PWC Employee Financial Wellness survey estimates 150 hours of productivity and 33 percent of earnings are lost per employee each year due to financial stress.
“Our research shows that all segments of the workforce that we serve, including restaurants, experience financial insecurity,” Garner says. “So, if an operator can address the financial burdens, that can really have an impact on their ability to recruit and retain hourly workers.”
Operators interested in enrolling in Netspend’s platform can schedule an evaluative conversation with Netspend’s team that will delve into their brand’s specific payroll needs. Netspend will then deliver a detailed plan of tailored recommendations, after which the brand's payroll personnel will coordinate with Netspend’s onboarding team to make on-demand wage access available.
Since Netspend’s platform integrates with most major human relations time clock and payroll systems, setting it up in a restaurant is a seamless process with no hidden or upfront fees. Instead, all pay to Netspend is collected after employees receive their pay. And with in-app instructions for every step of use, the Netspend Earned Wage Access app is not only easy for existing staff, but is also a breeze for new hires to learn, meaning minimal training is required for new employees.
“From a cash flow perspective, there's no funding or cash flow burden that the employer has to take on when their workers access or earn wages,” Garner says. “And for the employee too, of course, the process is seamless. We created the app to be very intuitive; it walks you through how to best utilize the product.”
Once employees open the Netspend app and create an account, they can choose how to transfer their earned wages, as well as when. Users can either send pay to an existing bank account or debit card, or, during their initial enrollment process, they can sign up for Netspend’s proprietary payroll card. The payroll card is a Mastercard-branded or Visa-branded payment method that offers debit card-like transactions, ATM access, and a rewards program to users.
With the Netspend platform—and, if needed, the payroll card—employees who are typically paid in cash or who do not have an existing bank account or debit card can digitally streamline their finances. This digital wage access and organization is especially critical for the financial health of employees in full-service restaurants who earn some of their wages through tips and who might not have their various streams of income organized through digital frameworks.
“We spent a lot of time building this card for employees,” Garner says. “It has the ability to be used for any number of transactions—from online transactions to accessing funds through an ATM.”
On top of offering a seamless digital process, Netspend’s platform trims the hours operators and employees spend dealing with cash or check wage disbursement, freeing up often-tight labor for other areas of operations. And this quick wage access can be a game changer in terms of employees’ financial wellness, too.
“This faster access to earned wages provides the ability to bridge gaps in cash flow,” Garner says. “That is really important in helping employees build financial stability, build savings, and not get caught in the cycle, or the domino effect, that damages workers’ overall financial situation when they fall behind on a bill or are saddled with a late fee.”
Additionally, Netspend’s platform offers operators a vital edge on the competition when it comes to recruiting and hiring. This is a crucial selling point for concepts in a strained, pandemic-affected labor landscape where, Garner says, restaurant operators are not only competing against other foodservice brands, but entire other industries, such as healthcare or security. Case in point: A 2019 Visa study finds that 95 percent of workers are interested in working for an employer who provides on-demand access to earned pay.
Netspend’s data also reports that 48 percent of workers have lost or quit a job due to a lack of financial wellness. In an industry plagued with high turnover, now more than ever, offering employees a chance to improve their overall financial situation via earned wage access could not only draw labor to a brand, but encourage workers to stay with that brand long-term and take advantage of on-demand access to earned pay for an extended period of time.
“Being able to evolve and innovate how people are being paid is key,” Garner says. “We see a lot of [brands] providing on-demand access to wages to employees and using this as a tool to stand out to workers. And when those employees come to a company that offers this benefit, they want to stay.”
To learn more about how on-demand access to wages can help you retain employees, visit the Netspend website.