In today’s business climate, employers face a variety of challenges to recruit, engage, and retain a multi-generational workforce with diverse expectations and needs. In 2015, Millennials surpassed Generation Xers as the largest segment of the American labor force. Employers of all sizes are often being called upon to adapt and deliver options that meet the mobile needs of this generation – which includes how they want to get paid.
Millennials are more open to non-traditional financial solutions to receive their pay, manage their accounts, and transfer their money than previous generations. A recent study found that 72 percent of Millennials would bank with non-financial services companies compared to just 27 percent of those over the age of 55. Smartphone devices and apps that enable mobile payments while on-the-go are driving the shift in the way Millennials manage their money. This, in part, has contributed to an increase in the number of employers who offer payroll card accounts that employees can manage using a mobile app as an alternative to paper paychecks. In fact, in 2015, ADP’s own data revealed that nearly 70 percent of ALINE Card by ADP® account holders were Millennials and preferred to manage their account using a mobile device.
For Millennials, the choice between a traditional bank account and other financial tools, like a prepaid payroll card, is no longer an either/or decision as Millennials are opting to use both. One in three Millennials have used a prepaid card, and 83 percent of all Millennials with a prepaid card also own a debit card. Millennials are forecasted to surpass all other generations in aggregate income by 2020, and we anticipate the number of Millennials who have payroll cards to rise.
So what’s the likely impact on payroll?