Workers want to be paid faster. Your business needs more workers. The impact of same day pay technology can grow your business sneaky fast. Same Day Pay gives you a sharp advantage when you announce it in your job postings. Same day pay is a sticky service that keeps your employees with you instead of jumping to a competitor.

The U.S. Bureau of Labor Statistics 2023 Current Employment Statistics (CES) survey found that only 27% of businesses pay weekly. And 73% of businesses require employees to wait at least two weeks for their pay. Offering Same Day Pay can be a tremendous advantage over your competitors when fighting to recruit and retain workers for your small business.

Asure handles payroll processing for over 100,000 businesses. Learn more about how to offer same day pay with Asure, at no extra cost for employers.

What Is Same Day Pay?

Same day pay, also known as Earned Wage Access (EWA), enables employees to be paid a percentage of their daily wages on the same day the work is completed. An employee’s wages, minus taxes and other deductions, are deposited into their bank account, mobile wallet, debit card, or pay card after their shift.

We interviewed Tate Hackert, Co-Founder and President of ZayZoon, a company that provides same day pay. Hackert cites that 86% of same day pay transactions are used for short-term necessities. Think groceries, utility bills, and medication.

How Does Same Day Pay Work?

Same day pay is typically provided by a third-party service. For instance, ZayZoon integrates with Asure payroll services to fund advances to employees. The platform lets employees track money earned and decide how much they’d want to access before their usual scheduled payday.

Depending on the provider, there may be a fee for employees. The fee is usually significantly less expensive than a traditional payday loan or check cashing service.

Same Day Pay Versus Payday Loans

Tate Hackert, Co-Founder and President of ZayZoon, explained the difference between Same Day Pay and Payday loans to Asure in an interview.

“Payday loans are expensive because they kind of have to be. People believe that payday loans are making money hand over fist, and it’s not exactly true. Now, of course, they’re charging crazy fees. They’re absolutely predatory. It’s a terrible experience for the consumer but the business itself – they have tight margins.”

Hackert explains that Payday loans use an outdated and expensive business model:

“It’s still done by paper and pen or legacy software. It’s brick and mortar. Then the last thing is you have all of these really good customers that are subsidizing the bad customers. Effectively every dollar that a Payday lender gives out, around 20 cents of that dollar doesn’t come back to them. That results in a big hit to their revenue, and that’s why they charge such exorbitant fees.”

Hackert tells us why same day pay technology makes it more affordable:

“Earned wage access (on-demand pay), what really makes it different is this integration with payroll providers. That ease of capturing employee data, being able to seamlessly offer up an amount to an employee based on the hours that they’ve worked or haven’t yet been paid for.

Basically, this means the business is really streamlined, and all those savings can be passed on to the consumer. That’s why with on-demand pay, typically, fees range from anywhere from zero dollars to around five dollars for an employee to access their funds. Whereas with a payday loan, those same fees are upwards of $30, $40, or $50.”

Impact of Same Day Pay on Employee Retention

Competition for workers is fierce. It’s no secret that your employees can be poached with higher pay or a better benefits package. According to Pew Research, about 1 in 5 workers say they are very or somewhat likely to look for a new job in the next six months.

But what if you can’t pay more money? You can pay faster.

SHRM holds up the restaurant chain Honeygrow as an example of how Same Day Pay increases employee retention.

Honeygrow has been offering Same Day Pay to approximately 1,000 employees for about a year. Honeygrow’s Payroll and Benefits manager, Tom Idler, told SHRM, “The director of HR and I were looking for new benefits that could get our employees more excited and really drive retention and draw in new employees.”

Today, nearly 65% of Honeygrow employees make use of Same Day Pay, with some locations seeing almost 90% utilization. Workers “feel more comfortable in daily life knowing they can get their money when they need it. It helps them with a surprise bill,” Idler said.

In an interview with Asure, Tate Hackert, Co-Founder & President of ZayZoon, a company that provides access to same day pay, revealed a shocking statistic. Hackert told Asure’s VP of Marketing, Mike Vannoy, that cash register theft was down 80% at Wendy’s franchises using their same day pay service.

Hackert told Asure, “[Same Day Pay] can really provide immediate relief to an employee. Earned wage access is such a beautiful solution because it takes away that stress immediately from an employee and does things like reduce theft by 80% for an employer, which after hearing that in hindsight makes sense.”

Vannoy commented, “I’m an entrepreneur. I’ve owned some businesses, and I’ve been part of owning businesses for my whole career. And it’s really easy to jump to some conclusions about criminality and mindset – good person, bad person – but when the same human doesn’t take from the till because they can access their legitimate paycheck early, it really screams to the need in not having to wait the two weeks plus another week for payday.”

Vannoy noted, “And it’s not to go spend on nefarious things. It’s for groceries, for daycare, for gas to get to work and life’s essentials.”

People don’t feel proud when they are so desperate they resort to stealing cash from their employers. Same Day Pay helps your workers stay self-reliant. These folks will have reduced financial stress and reduced stress overall. This can contribute to their feelings of loyalty to your business.

Forbes reports that more than 75% of workers polled said free access to on-demand pay would increase their loyalty to an employer and make them feel more valued as an employee.

Impact of Same Day Pay on Recruitment

In a survey of nearly 3,500 workers cited by SHRM by global staffing firm Aquent, nearly 57% of workers said instant pay benefits were important to them. Among workers ages 18-24, that number rose to an overwhelming 83%.

If you’re not offering same day pay, you’re at a severe disadvantage when trying to recruit workers, especially those under 25 years old who have grown up in a world of instant electronic payments by Zelle, Cash App, PayPal, and more.

Forbes cites a survey that found 8 in 10 respondents would take a job with an employer that provides same-day pay access at no cost to them over an employer that does not.

Casey Enevoldsen, vice president of employee experience at supermarket Lunds & Byerlys, explained why they use same day pay to Twin Cities Business Magazine.

“We really wanted to tap into [same day pay] and offer that to our staff as a means of continuing to differentiate us in the labor market. We’re seeing the labor force continue to shrink in its growth. It just means that there’s going to be less and less people available to do the work that employers are really looking to have done, and so we’ve been really focusing on retention as well as trying to attract new talent.”

Next Steps

Explore same day pay options to help you recruit new employees and retain your current workers. With so many people living paycheck to paycheck, same day pay can be a game changer for your business.

Over 100,000 businesses outsource their payroll to Asure, serving 1.7 million employees. Asure offers same day pay at no cost to employers.

Learn more about how you can team up with Asure to offer same day pay for your employees.