How to Evaluate the Value of an ODP Program

MEASURING SUCCESS:

How to Evaluate the Value of an ODP Program

BY BARBIE WINTERBOTTOM

Navigating the world of work these days is nothing short of a heroic effort for those trying to find that magic bullet to increase attraction and reduce bad attrition while not adding more weight to the shoulders of an already overburdened HR team. As much as we would like to coast and let things

play out as they are, we all know that will not yield the results we need. I believe an often misunderstood benefit

that is truly game changing is On-Demand Pay.

In an effort to help others understand the path to implementing On-Demand Pay (ODP), I have broken down elements by timeline to provide clarity and understanding of this truly outstanding option.

On-Demand pay programs have become a necessity for hiring and retaining employees for retailers. Measuring the most successful program will come down to how to quantify the value of the benefit for both the employees (user experience) and employers (business impact and results).

GENERATING RESULTS

To maximize program benefits, it’s important to select the right on-demand pay vendor for your company. Given the nascency of the market, there are a plethora of models out there that have many overlapping marketing tactics. Critical components of an ODP program are:

• Seamless, well-supported rollout

• Responsive and timely support

• Configurable program controls

• Robust and easy to access and utilize marketing and communication tools

• Financial education tools for employees

• Meaningful data to tell the story to the C-Suite

• Measurable Employer and Employee business impacts

Many of the above criteria can be measured in a 30/60/90 day postimplementation rubric:

30 Days

One month in, the benefit should be fully integrated into the employer system. This can be accomplished in two ways; Full Net Pay Model [one-time integration] or Deduction Model [one-time integration with ongoing deduction file processing every pay period]. Both can work well, it’s important to know your pay structures and what will work for your organization.

The program should also be listed as an employee benefit in the benefits directory with an early adoption rate of 20%. Early adoption is vital in reducing employee reliance on predatory payday loans and

deceptive D2C cash advance apps and increases employee engagement as watching your pay balance increase day after day almost “gamifies” the entire process and I have seen employees picking up extra shifts simply because they can immediately see and access their earnings. Some other key metrics include a noticeable reduction in turnover and faster recruitment. At this point, employees should have instant access on day 1 to 100% of earnings and see an uptick in engagement with company-offered financial wellness offerings.

60 Days

At about 2 months in, the benefit should be fully integrated with annual benefits elections / open enrollment and fully launched to the entire population. By now, program operations should not require any additional payroll involvement.

One should see an adoption rate at about 30% and a steady decrease in turnover with a continued increase in speedier recruitment.

90 Days

At the 3-month mark, the employer should see turnover rates drop in half among those who leverage the benefit, with recruitment speed to increase by 50%. • Vendor support portal handles 100% of inquiries

• Communications materials are custom and directly targeted

• No payroll lift or burden post-implementation

CONCLUSION

With a bevy of new players in the on-demand pay space, it’s important for HR professionals to have tangible metrics to evaluate whether you have chosen the right vendor. The right vendor has a profound impact on the financial wellness of your employees and a huge positive impact on the HR/Payroll teams as this benefit provides a win-win-win. The HR/Payroll teams get to be the hero of the story, employees have better access to and more control over their financial health and the organization has improved attraction and retention results. Recent data from the Aite-Novarica Group shows that a daily pay option can eliminate the need for payday loans or paying overdraft fees. And these days, anything we can do to drive employee retention is a must.

Barbie Winterbottom

CEO The Business of HR

Pay Same Day, Workers Stay

See up to 72% improvement in turnover rate.

Learn more at: www.dailypay.com