When the pandemic hit, time was of the essence. Between stocking up on toilet paper, masks, and hand sanitizer, there was a mad rush to acquire critical supplies and feel prepared for the unknown. This demand for immediacy, which trickled into all aspects of people’s lives, highlighted how important it is for employees to access their pay when they need it.
To learn more about why human capital management providers must offer their clients an earned wage access solution, PaymentsJournal sat down with Jeanniey Walden, Chief Innovation and Marketing Officer at DailyPay and Konstantin Getmanchuk, SVP of Products at DailyPay.
What is human capital management and how can it be improved?
Human capital management, or HCM, broadly refers to the recruitment, development, and management of a workforce. HCM is crucial for any company looking to be successful. Even so, many companies struggle to recruit, retain, and engage their employees.
HCM and payroll providers across the board are leveraging new technologies to improve their clients’ human capital management offerings. One way HCM providers can improve human capital management for organizations is by offering them earned wage access (EWA) or on-demand pay solutions.
On-demand EWA is an employee benefit that allows workers to determine when they get paid, rather than waiting for a preset scheduled pay cycle. Earned wage access benefits employers and employees alike. Employees get unprecedented control and flexibility over their pay, and employers see boosted hiring, reduced turnover, and increased worker productivity.
For HCM and payroll companies “to be competitive, [they have] to have something strategic, and integrating an on-demand pay service like DailyPay allows [them] to do just that,” said Walden.
In a world reeling from COVID-19, earned wage access is more important than ever
While on-demand pay was once seen as a “nice to have” feature, the demand for immediacy and widespread financial uncertainty triggered by COVID-19 made it clear just how important it is for employees to access their pay on their own terms.
Giving workers access to their earned but unpaid pay is a critical benefit that has a huge impact on their lives. While some businesses were already using or considering an earned wage access payment model, COVID-19 accelerated many organizations’ plans to roll out an on-demand payment offering.
HCM providers can stay relevant in an increasingly competitive market by offering clients the ability to deploy an on-demand pay or earned wage access solution.
“For HCM and payroll companies, remaining competitive and constantly adding to [their] platform of services… gives [them] the opportunity to build bigger relationships,” explained Walden. “So there’s really no bad reason for a HCM company or payroll company to not want to look at a DailyPay solution to give them an edge over what else is out there in the market.”
There’s a seamless way for HCM providers to offer earned wage access solutions
Given the triple digit growth in client demand for EWA offerings over the past year, HCM and payroll companies are quickly recognizing the need to embrace this new market.
But providing on-demand pay to prospects and existing clients has historically been a heavy lift. Until recently, HCM providers had to choose between building an on-demand solution in-house or partnering with a company through a generalized marketplace offering. But generalized marketplace offerings often miss the mark, and building an in-house solution is no easy feat.
“There’s a lot that’s involved in building a product to support earned wage access,” said Getmanchuk. “There’s everything from taking on a lot of additional risk associated with credit and operational risk, being able to fund the program, building out all sorts of new financial rails in order to move money in real time, and also just being able to support and manage this program across a variety of different HRM payroll and time and attendance systems,” he added.
Recognizing the dire need for HCM providers to have an easier way to offer on-demand pay, DailyPay set out to create an earned wage access solution that HCM providers can integrate into their own products and offerings.
Introducing ExtendPX: An On-Demand Pay Solution for HCM and Payroll Providers
After learning about the urgent need in the HCM space, DailyPay began working on an earned wage access solution that allows HCM providers to offer the life changing on-demand pay benefit without a heavy lift: ExtendPX.
ExtendPX makes it possible for HCM providers to give their clients a customizable spectrum of services, ranging from simply dipping into DailyPay’s API to a full range of end-to-end services including program funding, a digital wallet that can be white-labeled and customized, and customer and employee support.
“We looked at creating ExtendPX as a way to very quickly, easily, and seamlessly enable HCM companies to extend their offerings into the areas of on-demand pay without it being a heavy lift, so they could keep their existing customers very happy and also look to win new customers,” said Walden.
Given the ongoing economic impact of the pandemic and the fact that more employees than ever before are actively seeking out on-demand pay solutions from their employers, ExtendPX couldn’t have come at a better time.
“It is a great time to expand the use of [on-demand pay]. We see that payroll and HCM companies have great relationships with their clients, and this is really a way for them to deepen that relationship and give them a product that is very highly adopted among employees,” concluded Getmanchuk.