According to research by U.S. Bank, 82% of small businesses fail due to cash flow problems. While businesses naturally turn first to keeping steady revenue coming in as the ultimate goal, optimizing the processes and impact around how money flows out of the business is also extremely important.
Payroll and general business expenses are typically significant line items on an income statement. How they are managed impacts efficiencies and cash flow, but some executives do not yet appreciate the role their choices in these areas can play in attracting and retaining the best workforce, a critical factor to the success of any business.
According to Fortune, "…it's the companies that employees say are great workplaces that demonstrate stronger financial performance, reduced turnover, and better customer and patient satisfaction than their peers." Forbes goes as far as saying that happy employees are up to 20% more productive than unhappy employees.
What does this have to do with cash flow and keeping your business growing?
In the first of our two-part series, let's start with paying your workers. Next week join us to find out how reimbursement of employee and miscellaneous business expenses factors in.
You may think that operationally, you can only pay your employees weekly or every other week. Part of what goes into that decision is managing the process and workload of your team, and part is the difference in cost and time to cut checks 26 times per year versus 52. But If attracting and retaining the very best employees is a key to growth, would that affect your calculations and decisions about timing of payroll?
Employees always want to get paid more frequently.
With 1 in 3 Americans in regular financial stress, and with 32% of people running out of money before payday (that number rises to 40% for those making less than $25K, according to CNBC), paying more frequently could be the answer. This is especially true if your business relies on non-exempt employees or those that receive tips, where paying daily would make significant impact and make you a considerably more attractive employer. It Is safe to say that payday is the workday many employees look forward to most. Employees that live paycheck to paycheck are likelier to show up to work on payday. They work harder and are generally happier on payday. Why not make every workday payday?
A modern, innovative solution, such as EmployeePlus Payoutssm, allows you to do this. It puts you in control of how frequently you pay employees. It gives you the option to consider paying daily and even per shift.
Not only is this a differentiator for those employees that count on that paycheck to make ends meet, but it can also help attract temporary contract and gig workers who are likelier to accept your job over another, even at a lower rate, knowing they get paid immediately.
Furthermore, this capability can be used to reward employees instantly… such as in an instant contest or as an immediate thank you for a job well done. Having these tools opens up new opportunities to foster worker satisfaction and loyalty and build a reputation that attracts new workers.
Being able to pay an employee instantly, whether wages, tips or rewards, gives you a truly competitive edge to recruit and retain top talent. But payroll isn’t the only edge you can gain with your employees. How you manage paying for expenses can also make you more competitive in today’s business landscape. Join us next week to learn more.
Ready to modernize your payout ecosystem? Learn how you can accelerate how you pay workers and expenses with our interactive guide.
