Caring for employees’ well-being requires more than simply adding new benefits; deep structural changes in the workplace are what will truly make a difference in their quality of life both at work and at home, especially when it comes to their pay.
 

A modern pay strategy is increasingly important at a time when 47% of Americans say money has a negative impact on their mental health [1], and many are still struggling to afford everyday goods [2]. This need becomes even more dire among the hourly workforce, whose pay depends on the hours they work, and can vary from week to week. According to another survey, 52% of managers [3] are struggling to retain hourly workers due to the inability to offer competitive wages.

An easy solution to this crisis is to hike wages; however, while fair compensation at a competitive market rate is key to attracting and retaining top hourly talent, it’s not the only factor at play. How employees are paid can be just as important as how much they’re paid. Fortunately, human resources (HR) leaders are uniquely positioned to transform the pay process and, therefore, improve employees’ overall well-being.

There is no single solution that automatically “modernizes” the pay experience. Rather, HR leaders should take a holistic approach to updating their processes, one that prioritizes flexibility, accessibility, and transparency and keeps employees’ needs at the core.

Promoting Financial Wellness with Earned Wage Access and Flexible Scheduling

Creating a modern pay experience will likely require major structural changes to how pay is distributed and even earned.

Inherent to the name, hourly pay depends on the number of hours people work each pay period. This may be supplemented by tips or commissions, premium pay like overtime and holiday pay, as well as extra shifts. Consequently, having a fair, reliable schedule has an outsized impact on employees’ pay experience. If they aren’t getting enough shifts, or they’re only relegated to slower hours when the chance for commissions or tips is lower, they’ll become dissatisfied and quit. At the same time, overworking may cause burnout, which can hurt their performance and preclude them from growth opportunities, both of which are vital to their well-being at work.

Other employees may be less concerned about the number of hours they work and more so with coordinating their schedule with class schedules or another job. Giving them schedule flexibility is crucial not only to their financial wellness but also to their well-being on the whole, as it lets them pursue new opportunities and streams of income.

The potential for flexibility has grown tremendously thanks to advancements in HR technology. Where managers once spent hours each week on scheduling and attendance tasks, managers can now automatically generate schedules in minutes that match business needs with employee skills and preferences. This way, employees can work the hours they need at the ideal time and location, potentially saving them money on costs like commuting and childcare in the process.

Schedule flexibility has an even greater effect when combined with earned wage access. As cited above, most hourly employees prefer to be paid more frequently than the traditional two-week cycle. In fact, 36% of hourly workers [3] say the ability to get paid early would persuade them to take a new job.

When employees have early access to their pay, they’ll feel more secure tackling everyday expenses and enjoy reduced stress around their finances. They’ll also experience a deep sense of satisfaction when they can clock out of a shift and immediately transfer the day’s wages into their bank account.

Companies can go a step further with additional financial wellness benefits, such as financial planning resources, that are designed for hourly workers’ needs. Certain payments and workforce management platforms also offer tools to calculate the pay employees will earn from future scheduled shifts, which can help them make better budgeting decisions and preserve their financial well-being in the long run.

Embracing Artificial Intelligence

“Artificial Intelligence (AI)” is the phrase on everyone’s lips in the HR tech world, but the hype is far from unfounded. According to McKinsey, up to 30% [4] of the hours we work in the U.S. will be fully automated by 2030.

AI has numerous applications in the HR function, from automating payroll to identifying pay inequities [5] through advanced data analytics. However, the key phrase for HR is not “artificial intelligence” but rather “intelligent automation”. This describes technology that uses AI at its core, combined with other computing functions, to automate tasks and drive efficiency.

Intelligent automation of payroll, for example, removes tedious tasks like approving timecards and punch exceptions from HR managers’ workloads. With this time freed up, they can invest more deeply in the overall job experience, focusing their energy on creating new employee programs and implementing feedback. They also have more time to address any issues that arise since an automated system will flag them right away. Pay is sensitive, and human touchpoints go a long way in showing employees their managers care; the AI factor simply ensures that the human aspect is delivered with accuracy.

Improving Access to Rewards and Advancement Opportunities

To create a better pay experience, HR leaders must look beyond the standard pay process and into the greater realm of total rewards. Benefits, bonuses, and performance awards will be even more valuable to employees when they receive them on time and through accessible means. When 63% of employees [6] say their benefits reduce their stress, a fair and streamlined total rewards program is imperative to employee well-being.

Integrating rewards and recognition with a larger workforce management ecosystem can eliminate administrative hurdles that may prevent employees from receiving their hard-earned incentives. HR leaders should seek solutions that not only distribute rewards automatically but motivate employees with instant feedback and recognition that helps them grow and feel valued.

Freeing up time managers would otherwise spend on administrative tasks like scheduling opens up more opportunities for on-the-job coaching and professional development. Access to these benefits can impact employees' potential to earn higher pay and secure new positions in the future.

Streamlining Communications to Expand Employee Autonomy

Poor communication around pay can jeopardize employee engagement and sour their attitudes toward a company, leading to higher attrition rates and wounding a company’s reputation. Knowing this, the channels used to convey pay-related communications are just as important as the language used. Employees deserve timely and accurate communications about their pay - not smoke and mirrors.

For hourly workforces, having a mobile application is non-negotiable. A workforce management app that enables easy, two-way communication between employees and managers will provide an avenue for employees to ask questions and easily receive answers about their pay. They can also get notifications about deposits and extract their funds with a tap of a finger when earned wage access is enabled.

HR leaders have the power to reshape their organizations’ pay experience to suit the needs of the modern hourly workforce and future-proof their businesses. Fortunately, new technologies are continuously emerging and improving to make this job easier. By harnessing these technologies across all the functions that impact this experience – from wage access to scheduling to communications – HR leaders and managers will ensure a better pay experience for all.

Footnotes

Author Bio

Traci Chernoff serves as Senior Director of Employee Engagement at Legion Technologies.

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