Why on-demand pay could help hospitality

 

Hospitality businesses have had some of the toughest restrictions placed on them through the crisis and suffered a huge financial hit in the process, so it's unsurprising that operators are eager to start trading, as soon as restrictions are lifted, to see cash flowing through the till.

However, while operational concerns, such as implementing new social distancing measures and ensuring the supply chain is ready, will undoubtedly be heading up the re-opening to-do list, hospitality owners must not forget their most important asset in that planning process – their staff.

For a re-opening to be successful, restaurants, pubs and cafes will need a strong and supportive team to deliver it, so employers must consider the needs of their staff, as well as those of the business to do so.

We must remember that while the business has faced financial issues, so too has its workers. Many employees will have been supported financially through the Government’s Job Retention Fund during the crisis, but it is highly likely the funds were below their usual pay, due to tips and service charges not covered through the scheme.

Some may not have been eligible for furlough payments, so will be as eager as their bosses to get back to work and earn the business – and consequently themselves – money.

However, this eagerness could turn to resentment if employees are forced to wait a long time to see the fruits of their labour. Bear in mind that when staff return to work, they could be waiting up to six weeks to receive their first paycheck, depending on the payroll date, which may intensify any financial issues that have arisen during furlough.

One way that operators can prevent any ill-feeling, while also make the job more appealing, is by offering a flexible pay option, such as on-demand pay.

At no cost to the employer, on-demand pay allows workers to access their earned pay before payday, so they could work a shift and be able to access their pay as soon as it finishes.

On-demand pay has clear benefits for employees. According to the results of a recent survey of Access EarlyPay users, 90% of workers with access to this payment option said it was the most important employee benefit available to them during this time, whether they had used it or not.

Of those that had used the service during the COVID-19 crisis, 72% withdrew money for food and essential shopping and 62% for bills, showing that many had used it as a safety net to help them through the current situation.

While on-demand pay can be a lifeline for employees in hospitality, it also has benefits for employers in an industry which typically struggles to recruit and retain staff.  

According to research, companies offering on-demand pay see up to a 25% reduction in staff turnover, and over 20% more shifts worked by users of the service.

Offering on-demand pay is certainly a good way to support hospitality staff back into work post-COVID-19, but it could also be a useful recruitment and retention tool in the future.

These are challenging times for hospitality, but the industry is resistant and resourceful, so we know it will bounce back. When it does, companies will be clambering for skilled staff, so the companies with employee benefits like on-demand pay will be the ones attracting them.

Ensuring staff are taken care of financially as they return to work following the COVID-19 crisis could be the best decision hospitality operators make to safeguard the business now and in years to come.

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