Powering new financial benefits and pay flexibility with intelligent automation

Pay is often the first thing on an employee's mind. It can determine whether someone accepts, stays at, or leaves a job. It can motivate them toward stronger performance, and it can make a tough week a lot easier when they see their hard-earned money hit their bank account. 

While it's crucial that employers pay a living wage, they must think beyond this to attract and retain employees. The overall pay experience — which encompasses not just how much employees are paid but also how they receive and access their wages — should be modernized to accommodate the needs of today's workforce. 

Hourly workers are critically overdue for a transformed pay experience. Due to the nature of their jobs, hourly workers don't always see the same number on their paychecks each pay period, making it difficult to budget for everyday necessities. Their finances can vary depending on the availability of shifts, amount of overtime worked, and addition of holiday pay — and that variance can impact their ability to provide for themselves and their families. 

Add to this an ongoing inflation crisis, and the situation becomes even more precarious. In 2023, 80% of hourly workers reported being affected by economic challenges, with 52% indicating their stress levels had increased as a result. 

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There are bright spots, though. According to the January 2024 job report, wages are up 4.5% from the last year, finally outpacing the rate of inflation, and companies are making individual efforts to improve their hourly workforce's quality of life. For example, Walmart substantially raised the wages for its store managers in recognition of the pivotal role they play in the retailer's success. But not every company can raise wages to these heights — at least, not always right away. Moreover, pay rates tend to normalize within a geographic area, meaning companies can only raise their wages so high. 

Businesses need a more holistic approach to improving hourly worker pay, one that provides frontline employees with greater autonomy over their finances. Creating more flexible pay structures, such as early access to earned wages (EWA), alongside raises and rewards not only enhances employee engagement but also contributes to improved retention rates.

Hourly workers typically exhibit lower satisfaction with their jobs than salaried workers. Modernizing the pay experience can help close this unfair gap and transform hourly jobs into good jobs. 

Pay flexibility

The two-week paycheck cycle simply doesn't work anymore. Therefore, ​​EWA should be a baseline benefit, not a special perk. Per Legion Technologies research, the demand for the ability to get paid early has grown 20x over the past three years. 

The ballooning cost of living has precipitated this growth in EWA demand: Legion's survey revealed that 57% of hourly workers who prefer their pay every week needed earlier access to their pay to afford basic expenses, and 25% don't have enough savings to get by. These hardworking employees deserve better.

With EWA, companies have the power to eliminate the concept of living paycheck to paycheck (the current "lifestyle" of 62% of U.S. workers) and allow employees to access their wages when they need them. With modern workforce management technology, which provides visibility into potential earnings within an easy, intuitive mobile app, this can happen moments after they clock out of a shift. 

Pay flexibility should integrate with a broader approach to a flexible work experience. For hourly workers, this rests mainly on employers' ability to offer flexible scheduling. In fact, schedule flexibility is the number-one benefit hourly workers prioritize in a new job opportunity outside of wages. 

The same workforce management technology that powers pay flexibility can also provide more flexibility in when and where employees work. The critical factor is a system that delivers intelligent automation because it can automatically align employees' preferences with available shifts. This makes it easier for them to pick up extra shifts if they need them or swap with a colleague to accommodate personal obligations or even a second job. When employees have more autonomy over when they work and how they get paid –- all enabled within a single mobile app — they'll find more satisfaction in their jobs. 

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A dignified pay experience

How employees receive their pay can be just as important as how much and how often they are paid. Knowing this, companies are phasing out traditional paychecks in favor of more automated, user-friendly experiences. This extends beyond the convenience of direct deposit and offers employees improved visibility into their pay stubs and history. Easy access to these records can be life-changing: Employees shouldn't have to jump through potentially embarrassing hoops to qualify for housing or file their taxes. 

But simply providing access is not enough; when employees have questions about their pay, they should have the technology, resources, and trust in their employer to speak up. Improving team communications with the same mobile app will give workers easier access to management so they can surface any pay discrepancies or problems without delay. 

Streamlining timekeeping also ensures workers are paid fairly. Managers should have smart analytics tools that reveal key trends across total hours worked. This way, they can see if someone isn't getting enough hours or if a potential compliance violation might entitle an employee to more pay than they received. Employers can mitigate potential errors with a WFM system that automatically calculates premium pay, such as overtime and holiday pay.

Employees should be able to track any compensation they earn beyond their hourly wage. This includes income like sales commissions or tips but also newer financial benefits, such as tuition assistance and wellness stipends. These benefits can greatly improve the employee experience, but workers must have equitable access to them. An intuitive WFM technology experience will better enable employees to take full advantage of their pay packages. 

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Improved recognition and rewards

The pay experience also extends to employee rewards; 52% of hourly workers say the opportunity for greater recognition would empower them to take a new hourly position. However, with varying budgets and reward policies, companies don't always know what "greater recognition" looks like for them.

Generally speaking, hourly employees want meaningful financial rewards that are proportional to the work they've done. With this in mind, companies should implement performance-driven rewards that improve morale and encourage productivity. Awards programs powered by intelligently automated insights will reward employees more fairly, with less potential for bias and favoritism. 

Companies should also ensure streamlined communications are in place to notify employees of their awards in a timely manner and give them a space to recognize one another. An in-app newsfeed that features shoutouts and team milestones, for example, can inspire better performance while building a more positive workplace culture. 

Pay experience as a recruitment tool

Companies that use technology to lead with flexibility and therefore prioritize the employee experience will reap a competitive advantage in attracting, hiring, and retaining talent. 

Rate of pay will be the first thing jobseekers look for. But go to any retail or restaurant establishment actively hiring, and you'll likely see mention of EWA and flexible scheduling on the "we're hiring" sign. In the ongoing battle for hourly talent, meeting workers' needs with a flexible experience will attract top candidates and lead to better business outcomes.