Companies often claim that their employees are their greatest assets. In the world of temporary staffing, aside from existing contracts and operations, nothing could be closer to the truth. Human capital is the currency of staffing firms, and needs are constantly changing to provide the best possible experience for the temp worker.
One of the debates in the staffing world is the flexibility of pay periods provided to the workforce. One aspect of this debate is the cost-to-benefit analysis of providing daily pay for temporary workers. The question that is most frequently heard, is, “will the fact that I am not offering daily pay adversely affect my recruiting efforts, and if so, will it do so to an extent that surpasses the additional costs associated with implementation?” An early assumption of this question was the notion that as socio-economic demographics move downward (i.e. pay scale), payroll cycles must increase from bi-weekly, to weekly, and then to daily. Companies that have elected not to offer daily pay options due to their higher-paid temp workers are potentially making a recruiting error. In an era when debit cards, EFTs, ACHs and direct deposits have become the norm, daily pay can become an expected benefit for the temp worker.
If in fact daily pay is determined to be a market differentiator, the obstacle has historically been the back-office consequences of attempting to process pay in 24-hour increments. The largest obstacle in daily pay typically begins and ends with the onerous calculation and accounting for taxes in anything less than a one-week pay period. Most of the larger payroll processing companies are not designed to facilitate daily payrolls. From a sheer processing standpoint, this makes perfect sense. Imagine the scope of multiplying the pay and tax calculations for every client up to five times each week with the corresponding tracking and calculations for overtime for cumulative tax deposits!
Fortunately today, through technology, there are low-cost methods available to manage daily payroll without causing havoc with the existing payroll provider. Low-cost subscriptions are available that will calculate taxes on a day-to-day basis and then push that accumulated data directly into the weekly or bi-weekly payroll format. These subscriptions not only integrate with existing payroll systems, but are granular enough to provide exact tax rates to the geo-coded employee residence or workplace.
Another benefit to such functionality is the ability to directly populate “cash cards” or other deposit mechanisms for the best possible candidate experience. If your firm has been hesitant to offer daily pay due to operational concerns, check out the newer low-cost benefits of daily pay technology.
