On-Demand Pay Makes Employees Happy But Pressure Businesses
May 19, 2022
On-demand pay is one of the most focused financial wellness programs for leaders as well as employees.
On-demand pay is highly regarded by workers due to its benefits, flexibility, and convenience. But businesses need to overcome various challenges if they want to successfully implement this innovative program.
Workers are enabled to “triumph over” financial stress
According to Federal Reserve, 6 in 10 people cannot handle an unexpected expense of USD 1,000. Covid-19 has placed financial stress on everybody, which creates the demand for financial wellness from employees in the post-pandemic. A lot of businesses have been implementing new benefits packages at the workplace, and some changes are directed at improving the financial wellness of the employees, one of which is the on-demand pay program.
“On-demand pay program is an unavoidable trend for businesses when employees are showing more interest in their financial wellness. 2 years of the pandemic in Vietnam has not only been causing disruption to workers’ income but also increased their cost of living such as healthcare, and WFH equipment. Additionally, since more employees are reaching out to bad debt, this further raises the need for businesses to implement a new pay model to relieve the pressure on the workers. However, on-demand pay will generate tremendous stress on the cash flow, operation of the businesses provided not enough preparation”, Mr. Jack Nguyễn – Deputy CEO of Talentnet advised on the on-demand pay model.
Three steps to “dampen” the pressure on HR when implementing on-demand pay
Mr. Jack Nguyễn pointed out that many businesses in Vietnam are still adopting the traditional payroll model. “The traditional payroll process has always put a huge amount of pressure on the HR team. To help HR be ready for the on-demand pay model, leaders should provide adequate guidance before implementing the new payroll process.”
Mr. Jack suggested 3 steps to “dampen” the pressure on HR when implementing on-demand pay:
Define the needs based on businesses’ financial status. Businesses and employees should discuss and agree on detailed payment of the salary. For SMEs who couldn’t adopt this payroll model, you can offer employees payment as advances provided for reasonable purposes.
Providing HR with suitable tools. HR can find it hard to make changes in the existing complicated payroll process of the businesses. Leaders can standardize the process by applying technology and building a quick and transparent payroll system. Additionally, businesses can use ready-to-use systems from other payroll service providers as a way to lessen the workload for the internal HR department.
Seeking personnel from payroll outsourcing services can relieve internal HR from administrative work, and focus on more strategic work. Furthermore, the experienced consulting team can quickly update new regulations and advise businesses on the implementation of the new payroll processes.
Payroll outsourcing services are the immediate help so that businesses can focus on building a tailored remuneration system that best fits the needs of workers. “But businesses should remember that the changes in payroll process must come from the needs of the employees as they are the most valuable assets to a business success.” – shared Mr. Jack.
Source: Nhip Cau Dau Tu