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DailyPay Executive Interview
Helping Employees Achieve Greater Financial Stability Boosts Retention Rates
No
matter what the prevailing condition of the economy, contact center operations
have always struggled to recruit, retain, and engage
employees. When you add in a tight labor market with a 4% unemployment rate and
a flat-wage environment that makes it harder to compete, it becomes even more
of a challenge to retain the most productive team members. With many of these
employees scrambling to make ends meet between scheduled paychecks, imagine the
advantage a business could enjoy by offering employees instant access to wages
they’ve already earned…at the worker’s convenience.
That
is the premise behind DailyPay, a New York City-based solution provider that has already achieved dynamic growth in
just three years by developing a radically simple solution that sits on top of
and integrates directly with an organization’s existing time keeping and
payroll systems. While enabling front-line personnel to control the timing of
when they are paid, DailyPay requires no change to existing processes or timing
of payroll funds. “Many of the companies who have become our clients have seen
such minimal difference in the way they do business, they almost forget that
it’s there,” said Jason Lee, CEO and Co-Founder of DailyPay “Users pay a fee
between $1 and $3 each time they use the solution. In about 90% of cases, these
fees are paid by the employees, but some Fortune 100 employers pick up the
charges as a perk for their workers.”
“When
employees have trouble meeting their financial obligations, it often leads to an
increase in absentee rates and productivity plummets. By using our solution, businesses
are empowering their staff members to meet goals and pay bills on time,” noted
Lee. “Employees who find financial security at a company stay longer, which reduces
turnover and in turn improves bottom-line profits. Having this capability reclaims
countless hours spent recruiting, hiring, and onboarding. This helps to resolve
a particularly acute need in the contact center space which has one of highest
annual turnover rates of any industry.
While
DailyPay’s partners also include companies in other high turnover industries,
such as cleaning, facilities management, healthcare, transportation, and
retail, Lee has a special affinity for contact center operators, which he
estimates to account for approximately 20% of the company’s volume. “We work with best-in-class contact
centers
across the country to bring this financial wellness tool to their agents. The
results have been staggering, with more than 40% improved retention in the
first six months and close to 50% overall adoption of the financial wellness
benefit,” said Lee. “Whether they’re on the
independent business side such as BPO’s or on the captive side of corporate
operations, I find contact center people just a really nice bunch of folks to
work with.”
“While
our product is offered across the entire salary range, both salaried as well as
hourly workers, we find that a preponderance of users do tend to be in the
hourly base and within the $15,000-$50,000 annual earnings category,” said Lee.
“In addition, our growth is fueled by some of the macro trends that are
occurring such as population demographics. For example, an obvious business use
case is in healthcare, where the aging baby boomers increasing need for care is
fueling a need for workers to whom offering our solution can make a difference.
With customer service, every time a
gadget gets sold and every time a new gadget comes on the market, it creates a
greater need for people to call someone to find out how to operate them.”
DailyPay
shares the same type of messaging as mobile applications that enable agents to
set their own work schedules and request time off. It appeals to the need to
make contact center workers happier, more productive, and more inclined to stay
at a position. “We tend to be data
centric in measuring our results,” said Lee. “In the call center environment,
35% of employees will take advantage of the benefit right away and more as they
go along. This has led to an astounding 41% higher retention rate. These
results are consistent whether the fees are paid by the employees or the
employer.”
The
product is offered as an employee benefit; it is not available to the public.
DailyPay offers a pre-packaged enrollment and marketing strategy to its users.
“Most important to note, employees are only eligible to access wages they have already earned as opposed to taking any kind
of advance. In that way, our product resembles an ATM that provides you with money
from your own bank account. In fact, some companies call it the “Daily PAY-TM.”
These payments (the average payment is $66) are initially funded off
DailyPay’s balance sheet and then charged back to the employer. Our technology frees up companies to run
payroll as they usually do with no change…weekly, bimonthly or when convenient,
and then operates in the background to simply redirect payments already made
back to us. There are no changes in how they pay their taxes or in making
deductions. From a mechanical and operational standpoint, it’s set it and
forget it. We like to tell our partners
that they can take a vacation because there is no modification.”
The
implementation of DailyPay takes about 20 man-hours according to Lee. “Even when everyone is busy and has only one
or two hours a week to work on it, the system is up within less than a month.
There is no ‘installation’, everything is in the cloud… and there is no
‘integration.’ It’s just a data exchange with an existing workflow. We extract
a data file and automate it through an FTP process. Some of the larger, more
sophisticated companies we work with take the time to customize it through an
API.”
“The
benefit is a two-way street with the operators - CFOs and CEOs - seeing the
benefits accrued with greater margin hitting the bottom line due to increased
retention,” said Lee. “And the employee avoids negative consequences such as late
fees or bank overdraft charges, which for many people can run as high as $1,000
per year. Instead of wasting that money due to mismatched timing when their
bills don’t line up with their pay cycle, they can pay a minimal fee which
enables them to use what they earn when they need it. Savings of this nature can
make a real difference in a society where 47% of people can’t afford an
unplanned $400 expense.”
Lee
originated the concept in 2015 with his co-founder, DailyPay CTO Rob Law. The
company now serves about 100 unique companies with a total of approximately
250,000 employees, and believes their business will grow even faster as more
companies become aware of the advantages they offer. “We have been fortunate
enough to have been recognized by the New
York Times, Women on Business,
Forbes, Fortune Magazine, Human
Resource Executive, Money, and many other media,” he said. “Our goal is to
provide every independent contact center with a competitive differentiator that
will help them win and keep the business they are seeking and to help corporate
operations deliver better performance to achieve maximum profitability with
minimum turnover.”