With fears of a talent exodus as the rising cost of living and inflation continue to drive staff to new, higher-paid roles, CloudPay warns that firms need to find alternative means of improving the financial support available to staff.
This latest call follows data from talent services company, Morgan McKinley.
Their research revealed that more than half (57%) of global employers are worried they will lose staff in the first half of 2023 due to higher earning potential elsewhere.
According to CloudPay’s own research – produced in conjunction with Industry Dive – the frequency of pay days is equally as important to staff in the current climate, with 60% of employees raising concerns around how they would pay for an emergency.
A further 70% of executives stated that responding to employees who want to be paid before payday was the greatest challenge facing their payroll teams.
Paul Bartlett, CEO of CloudPay said, “Rising interest rates, inflation, and fears of a recession have understandably driven financial worries to the forefront of employees’ minds whilst business leaders contemplate the impact it will have on staff attrition rates.
“The data from Morgan McKinley suggests that firms could be facing a talent exodus at a time when skills shortages are already rife.
“However, company-wide pay rises aren’t feasible for all employers, particularly as economic uncertainty continues.
“This is why firms need to be more innovative with their solutions and think outside of the box.
“Our own research found that improved financial well-being can help create a happier, more engaged workforce and, perhaps more importantly, a reduction in staff turnover.
“By giving employees access to the salary they have already earned, when they want and need it, rather than waiting until a designated payday – or resorting to loans or credit cards – employers can easily alleviate some of the challenges they’re facing.
“It might not be a salary increase, but it helps provide further stability for staff whilst also acting as both an attraction and retention mechanism on a more sustainable basis.
“Earned Wage Access or Pay On-Demand solutions offer businesses a low-cost, high-value, fully consumerised and flexible employee benefit that addresses an important employee concern in times of economic uncertainty.
“There’s a belief that this flexible pay benefit creates additional workloads for the company and employees could be encouraged to overspend.
“In fact, it’s quite the opposite. The solution can be up and running in as little as two weeks with limits placed on how much of their earned wages can be withdrawn in a transaction, providing a much better alternative to incurring debt.
“The current economic climate is only going to continue to have an adverse impact on staff. Rather than lose them to competitors at a time when skills shortages are rife, firms need to look at innovative ways to support and ultimately retain staff.
“Giving them access to Pay On-Demand is, in my view, a significant benefit that shouldn’t go ignored.”
Jennifer Gaster, Founder and MD of HR Heads, added, “Across the HR recruitment market we’ve seen sustained demand for reward and wellbeing professionals, as organisations continue to invest and retain their key talent.
“With more than half of global employers worried about losing staff, we could see a shift in demand from Reward to Learning and Development roles as businesses strive to offer a competitive employee value proposition and invest in their people.”