“For me, it’s more about, are you giving employees access to something that will directly improve their financial position?”

In episode #94 of Mission to Grow, the Asure podcast that serves as small business owners’ guide to cash, compliance and the War for Talent, VP of Sales at Zayzoon, Shane Edrington, sits down with host Mike Vannoy to dispel some myths about earned wage access. Shane shares how on demand pay results in happier employers, how it can prevent unnecessary losses for businesses, and what types of employees it makes the most sense for.

• Employers need to understand what earned wage access is and isn’t. While on demand pay fills a similar need to pay day loans, or advances, it isn’t the same. On demand pay simply gives employees faster access to their earned wages.
• When thinking about financial wellness, employers need to give their employees as much agency as possible. While some employers may think that holding on to pay is better, it’s ultimately more of a burden on employees.
• When payroll took longer and was more cost prohibitive, it made sense for employees to only get paid bi-weekly. Because of how efficient payroll has gotten, many employees are starting to desire a faster pay cadence.
• The types of employees who benefit from on demand pay the most are people who make between $30,000 to $80,000 a year. Typically these are people who are in some way, living paycheck to paycheck.
• By utilizing on demand pay, you help protect your business. In quick service restaurant or convenience store applications, the use of on demand pay resulted in theft from the till dropping by 90%.
• On demand pay results in happier employees, and directly results in lowered employee turnover. Businesses with on demand pay see up to a 29% reduction in turnover, equating to a savings of $10,000 a year for every 100 employees paid.
• When looking for a provider, employers should prioritize ease of use and automation. Solutions that require a human to enter data are time consuming, inefficient, and run the risk of having errors.

Explore our Payroll & HR solutions that boost back-office efficiency to enable your business to scale.

 

Read the Transcript:

Shane Edrington: you’re empowering that employee or that person with more options, right? That, that person does not want to go to a payday lender. They don’t, they don’t want to go to the employer and ask for an advance. It’s rather embarrassing. They don’t want to. To take money from the till, and that’s something that we’ve seen, uh, on demand pay actually be a benefit to is like, you’ll have a QSR type operation that will deploy it or a convenience store or whatever, and they’ll report a 90 percent reduction.

In theft from the till, which to me has always just spoken to the humanity of it, right? Like people don’t want to do those things

Mike Vannoy: On demand pay, the new must have benefit for employers and employees. Hi, I’m Mike Noy, your host of Mission to Grow. A lot of people don’t realize, I think, how much the makeup of the workforce has changed. You know, we’ve gone through so much in this last, you know, three, four years with a, with pandemic and presidential cycles and wars, inflation.

That I think a lot of times we lose sight that there’s been a fundamental change in the makeup of the workforce in 2020 is the first time in US history, there’s more people overworking their age than there are under working age in based on birth rates of 30, 40, 50 years ago, the available workforce is flattening.

Uh, as the economy continues to try to grow, and therefore this labor shortage that we feel, this isn’t just some short term thing, this, this, this has been baked in for a long time, and employers need to understand, uh, the long term impact of this war for talent and implement solutions and strategies to, to deal with it.

One of them is, uh, employee financial wellness. There is nearly a hundred million Americans, they live paycheck to paycheck. Uh, according to the Federal Reserve’s annual survey of U. S. households, 37%, uh, and growing, this is up, I think it’s 5 percent year over year, 37 percent of Americans couldn’t afford a 400 emergency.

So something happens to the house, the heater, the air conditioner, the car, uh, a medical emergency that’s not covered. Our employees are living on the edge more than they ever have. And I think this is something that employers really need to deal with and think about. So, uh, got a great guest to unpack this topic today.

Uh, he’s an experienced executive focused on business development and corporate strategy. He’s been a longtime advocate for the financial wellness and health wellness platforms. Uh, his firm is an early stage innovator. And what is now this booming, uh, industry of earned wage access, where his company delivers flexible liquidity to employees, improved employee satisfaction, ultimately lower turnover and higher retention rates for employees.

Please welcome to the podcast, uh, VP from ZayZune, Shane Edrington.

Shane Edrington: Awesome. Thank you very much, Mike. Appreciate you having me on.

Mike Vannoy: Yeah. So Shane. Let’s maybe just start out with the first question. What is it that you think employers need to understand about earned wage access, on demand pay, if they’re going to try to grow their business today?

Shane Edrington: Well, they should understand, I mean, outside of trying to grow their business, just understand about Earned Wage Access in general is, what it is and what it isn’t, right? And I think that just because it serves a need that many other products out there serve, Kind of sometimes gets lumped into the same baskets.

When I say that, like there’s things as egregious as, payday loans or overdraft fees, or in some ways going to your employer and asking for an advance. Cause that can be egregious from like an embarrassment to relationship management perspective. Um, it’s easy to try and put it in that basket because those products, really what they’re doing is they’re saying, Hey, somebody needs a couple hundred dollars for a very short period of time.

Here’s a way to get that. Right. But I think that what they also need to understand is that. A lot of the population serves that same need in other ways, right? So if you’re a quote unquote, a paper or our person, right, you might serve that need with a credit card, right? Or you might dip into a savings can also be viewed in much the same way, right?

So it’s just a cashflow issue that we’re serving, employees are getting access to, better liquidity or access to improve cashflow and that in of itself. Allows them to save money on fees or improve their financial condition, et cetera, et cetera. So I think it’s important to know that just because it serves the same need, again, what it is and what it isn’t by way of what it costs with the experiences, et cetera in terms of how it can help grow the business.

I mean, employers have to be competitive. I mean, it’s, it’s, as you were, uh, you know, Discussing distinctly in your, in your intro. I mean, it’s, it’s tough out there, right? The job market is difficult ever since COVID. It’s been very challenging for employers to find employees and to retain, uh, employees. And so anything that employers can offer, uh, a potential or prospective employee is important and how they get paid or how they access their pay.

Is something that before a few years back, maybe at this point, you know, five, seven years back was just not even on the table. It was like, well, you get your paycheck when you get your paycheck. And so you might start today and you might not get paid your first dime for a month in some cases. Well, now if you’re that employer today that you don’t, that employee doesn’t get their first dime for a month versus someone who can literally access it the next day.

I mean, that’s, that’s incredible, right? There’s a huge, uh, Delta there.

Mike Vannoy: Yeah. And to be clear, so maybe we should pause. Give a definition of what on demand pay is, because this has changed so much. I mean, you go from the whole payday loans industry, which, I mean, it, it, it served a need. Um, it’s, it’s maybe a little slimy and stinky, so maybe, but I hate to criticize it too much because it clearly served a need.

Um, but there’s this whole burgeoning field, companies like yours, ZayZune that provides this on demand pay in, in ways that are, I’d say, clearly much more ethical, uh, easy to do business with, uh, that, that serve the same need and, and hopefully, you know, putting the, the payday loan folks out of business. I, you know, hate to maybe say that, but get, unpack for us.

What is. On demand pay, uh, same day pay, earned wage access, lots of different things people call this.

Shane Edrington: Yeah, so the on demand pay is quite literally the ability for an employee to access a portion of the earnings they’ve already accrued, just have not yet received. And so it’s their money, it’s their assets. They just have not been able to receive it yet by way of their employer because the employer is not going to process payroll every single day.

Payroll is challenging. Payroll takes time. Payroll costs money. It just doesn’t make any sense. And so when you look at what on demand pay or earn wage access is today and why it wasn’t available, in the past, it wasn’t just a great idea. It was literally a limitation in many things like ability to access the data that would verify what earnings have been accrued.

And the ability to transfer money to those employees because they’re oftentimes in an emergency or they need the money right away. Instant transfer of funds was not a thing until just last in reality, a short period of time. And so those things coming together has allowed on demand pay to be what it is.

And so as much as I would be, uh, very open to criticizing the, the payday loan industry and overdrafts and all those kinds of things, those industries and those solutions are born from a lack of data, a lack of ability to verify, uh, what’s going on. There’s a risk element that they’re taking and other things that we can talk about, like, you know, brick and mortar expenses and things like

Mike Vannoy: Yeah. You know what? I, we probably have some, some petty loan businesses, their customers are. So I’m going to walk back my criticism just to touch. It’s a really good point you make. I mean, if you’re going to, if you’re going to advance someone money based on what their last, say three paycheck stubs said they make, You don’t even know if they’re currently employed or maybe their, their hours were reduced and that’s why they’re coming in for this loan.

You had to hedge your risk because you didn’t have access to seeing how many hours have been accrued or how much, how many dollars have been accrued right in this given pay period. So. You know, they, they’ve been probably rightly criticized for some probably predatory pricing models, but it’s a completely different risk profile when someone says, Hey, I need an advance on my paycheck and you’ve never met me before, uh, how much are you going to risk, right?

Shane Edrington: that. Yeah, all money, right. All offerings of money, whether it is a loan product or whether it’s something different than a loan, like an earned wage access solution or on demand pay is generally born of, of how economics can be put together by way of what risk you’re taking, how much it costs you to facilitate the transfer of funds, other operational, it’s, it’s a business like anything else.

Right. And so, yeah, it’s very easy to criticize. Other types of solutions, but usually those solutions, even though there’s a layer of, uh, inappropriate or bad actors that are on there, that the models themselves still experience pressure, still experience market pressure. So you would say, well, why are they still so expensive?

They must have elements of their model that forced them to be right. And so, earned wage access, non demand pay. Has dramatically reduced the impact of those particular elements by way of risk. And it’s very virtual and high volume. And again, kind of like a business lesson here when it comes to like margins and economics, but that’s the basic reason as to why on demand pay has become so much better than other solutions.

Mike Vannoy: So without making this a Zazun pitch, mechanically, how does this work if you’re an employee today? I mean, it starts here, right?

Shane Edrington: Yeah, for sure. So, I mean, as far as if you’re an employee that has access to on demand pay, it means you have access through your employer and or through your payroll or PEO provider. And so, it’s simple for the employee. The employee can go into the portal of a particular on demand pay provider. They’re shown generally what they have access to.

And that does vary a bit by provider, but right now across the board as to what calculates that, but they have access to some portion of their accrued pay. They decide where they would like to receive that pay. That part of the experience can vary provider by provider. So are they putting on a card that they take as part of their employment to payroll card or whatnot?

Are they pushing it to their? Bank account, they’re pushing it to a selection of gift cards, whatever it is. But the fact of the matter is that when this is functioning, on demand pay is functioning for an employee. They can jump onto a portal, request their funds, receive their funds and spend their funds in a matter of minutes.

Mike Vannoy: So it’s fast. It’s easy. It’s safe. Uh, uh, the other side of the equation, the provider has access to data to underwrite the risk, uh, appropriately. Therefore, they don’t have to charge as much to, to, to account for, for any of that risk.

So, so let’s talk maybe a bit about the, the, the, some of the mega trends around financial wellness for employees.

I think. I think as an employer, it’d be easy to think, well, I’m not going to participate in this and contribute to my employees lack of discipline. I remember this years and years and years ago. I just watched a video the other day. It was going through my reels. Uh, and it was, uh, interviewing people at a McDonald’s where you got, this is, I don’t know, three decades ago, maybe more, four decades ago when they were accepting credit cards.

Uh, for the first time and people were scoffing, how irresponsible you must be to use a credit card to buy a 2 cheeseburger. Right. And, and, and, and so I can see some employers maybe pushing back in this concept thinking maybe it’s just their employees have a lack of financial discipline. They’re not going to play a role in that.

I think a lot of folks just don’t understand. You know, that’s why I opened the conversation with a hundred million Americans living paycheck to paycheck. Like how bad is it for folks?

Shane Edrington: Yeah, it’s, it’s pretty bad. Um, uh, you know, I, I, From my own personal background, I’ve been in this space for, I don’t know, I keep saying 15 years, but the year is judged by us. Maybe it’s 17, 18 now. I don’t know, but in the financial wellness slash benefits slash payroll, HR tech space. And so there’s always a lot of talk about financial wellness and what does or does not improve it.

And I’ve grown pretty cynical about the actual term financial wellness being a fairly inaccurate bucket term for a lot of things that just are either just content providers, or they’re just things that just don’t, Happened to directly improve financial wellness. They have some like third layer indirect benefit that you can tie to the term.

And so for me, it’s, it’s more about, you know, Are you giving employees access to something that will directly improve their financial position? And is it tactically and pragmatically even just going to improve their life? And so when we look at something like On demand pay and you take it up to the employer and the employer takes a very, um, paternal perspective in some cases and says, Hey, this isn’t good because it’s actually better for my employee base that I hold their money.

Cause who knows what the heck they would do with it if they had it, you know, 13 days earlier or 29 days earlier, how are they going to pay their rent if they go out and buy, you know, 36 packs next week. And that is what, what you hear a lot of. And, and all I can do, and I don’t know, it depends on the audience in which I use this example.

Cause it doesn’t necessarily resonate. But to the extent you have like business owners, you know, watching this thing, it’s like, you know, tie yourself back to a time. And I’ve run companies and small businesses in particular, where you run the company is on a tight cashflow line, right? You’re, you’re up and down, you’re in between the red and the black.

Sometimes there’s, there’s issues where you might not make that utility bill payments or payroll or whatever.

Mike Vannoy: Yeah.

Shane Edrington: Most businesses would see the receivables, their AR, right? Pretty continuously throughout the month. And you would ask that business owner quite, you know, Directly, Hey, would it have made that time at that point in your business easier or more difficult to get all of your receivables on one day of the month?

Or do you actually get some smoothing and some benefits and some strategic options as to how you manage your cashflow and your finances when you have a steady flow or at least steady access to those receivables? And I’ve never met a business owner that said, Oh yeah, please send me all my money on October 15th and I’ll make everything work.

Like there’s more flexibility. Now, can people. You know, do the wrong things. Well, yeah, but they can do that anyway. Right? So I think, I think the opinions there really lie in that understanding. And I think it’s getting better as to how people view that scenario.

Mike Vannoy: Yeah. And if you just look at the macro numbers, I mean, if a hundred million Americans are living paycheck to paycheck, it’s not cause you’ve got a hundred million people who don’t know how to manage their money. The reality is wages have not gone up in the last two decades at the same rate as the rest of the economy.

They just haven’t. It’s just put this massive squeeze. It’s not just the lower end of the economic ladder. It’s the middle class is, really gotten squeezed on, wages. And so. I agree with you mathematically. Of course, there’s going to be some folks who maybe they just aren’t good in managing their money and they and they and they need some help in education and we can probably go half of the year.

Um, but the reality is, if, if a spouse walks out the door in a domestic issue and mom’s trying to buy groceries, to feed her three kids and doesn’t have it because, the other half left the house with, The car and what, basically that’s none of your damn business if you’re the employer, right?

And even if it was, and even if you cared deeply about that person, it’s up to that person if they share any of that information with you. And if you have a way to, that they can access their paycheck a few days early, what the hell harm is there in that, right?

Shane Edrington: Yeah. Well, you’re, you’re empowering that employee or that person with more options, right? That, that person does not want to go to a payday lender. They don’t, they don’t want to go to the employer and ask for an advance. It’s rather embarrassing. They don’t want to. To take money from the till, and that’s something that we’ve seen, uh, on demand pay actually be a benefit to is like, you’ll have a QSR type operation that will deploy it or a convenience store or whatever, and they’ll report a 90 percent reduction.

In theft from the till, which to me has always just spoken to the humanity of it, right? Like people don’t want to do those things, right? They only,

Mike Vannoy: You and I have talked about this before. Unpack that. I want to make sure everybody really understands that because this is, this is like a massive example where it’s so easy to think bad employee. They’re a, they’re, you know, they’re a liar. They’re a thief. What the before, after of implementing an on demand pay is, is so dramatic.

Yeah. Take, take us through more detail there.

Shane Edrington: yeah. So the, the, the details of it are like, let’s, let’s say you have a Burger King operation that has, you know, 60 employees and they have some amount of what they at least record to be theft from their till on a monthly basis or annual basis prior to having on demand pay in place. And which would, which would mean to your point, okay, they hired.

A few bad apples that would just steal from the till no matter what. They’re opportunists, right? That, Oh, somebody is not looking. There’s a 20 right there. I’ll just, I’ll just snatch it. And then they turn on, on demand pay and they give the employee base options and they reduce the squeeze that person is feeling from lack of options.

And all of a sudden, like as if by magic, the theft from the till drops by 90%.

Mike Vannoy: hard, hard to, hard to describe the impact of that. Like when I, when you get, when you guys first told me that number, I’m like, I could just see myself as the employer, you know, being pretty judgy, finger waggy. How dare you steal from me? And, but if it dropped by 90%, oh my God, they really were just.

Whether it’s for good reasons or bad reasons, they’re living paycheck to paycheck. They simply needed the money and they, they, they were opportunistic because they felt backed into a corner, right?

Shane Edrington: yeah. And then there’s, to be honest, there’s so many numbers or, you know, ROI elements or various things that you kind of look and know that’s fun with numbers. I can’t really tie that to a particular impact, but this one for me, again, just from a humanity perspective, like your employees felt so squeezed that they had to do something they would never, ever have done, and you gave them something that now costs you nothing, doesn’t really, require anything from you for the most part and, and they won’t, they won’t steal from you anymore.

Like how much better must the employees feel that they don’t have to be that person anymore? Like this is, it’s crazy.

Mike Vannoy: Right, right. What about just other financial stressors? I think you probably have some data and some stories that just be, maybe they never stole from a till, um, but they’re still living really, really, really tight in the financial stress, what that does to work productivity,

Shane Edrington: Yeah, for sure. So, I mean, as far as, you know, when you talk about work productivity, it’s, what does that really tie to you? Like, do you, do you, do you picture someone That just all of a sudden starts working harder, uh, just in, in general, in something like basal elements. I mean, I don’t necessarily think so, but, but they’re far less distracted and concerned with that squeeze that they’re feeling, right?

So they may not steal from the till, but I can tell you what, rather than working in their eight hour, whatever their shift is in the back of their mind is constantly spinning, like. While my electricity is getting shut off tomorrow, or I have to get my, my son’s medication, uh, which has a co pay and I don’t have that, like how am I going to, that’s, that’s dominating their brain and rightfully so.

I mean, just removing that from their mind, frees them up to be productive. And then from the absenteeism side of, of productivity, like they’re not having to call out to go across town to the payday lender or to figure out some way to make ends meet or to have some secret, you know, second gig. That they have to have to, to make ends meet.

Like, Oh, I have to make this a hundred bucks by tomorrow. I’m going to call out from this employer and go drive Uber for the afternoon. And I have to imagine that’s a real thing.

Mike Vannoy: right? There’s no question that’s got to be a real thing, right?

Shane Edrington: Yeah, for sure.

Mike Vannoy: Well, what would you say, share some insight Shane around just macro trends. I mean, I think about my daughters when they go babysit, they, they get paid on Venmo on the, on the ride home. Psychologically, that’s just, they’re used to getting paid that way.

They’re, they, you know, they go enter the workforce, they’re just going to think it’s weird. Why would you wait two weeks plus another full week to get my first paycheck? That just, that just feels out of step with reality. Now. They’re young and, uh, they’re not in the workforce yet. One, one will be very soon.

She’s in college. Um, but this, this is a thing, this is an expectation with the next generation workforce of just an expectation. What, what do you have to say about that?

Shane Edrington: Yeah. I mean, you know, I don’t know if we’re in the, the exact same age bracket here. Mike probably pretty close though. And like our, our, my age bracket would always get criticized for consuming.

Mike Vannoy: both have white here. I

Shane Edrington: Oh, I got plenty of what?

yeah, that’s, that’s. Non stop, but I think, you know, we would get criticized when we were younger for just having attention spans or expectations of delivering value or, kind of a reward type response, right?

In a matter of say, minutes instead of hours, like our parents might expect it. And now it’s, seconds, right? Like my, my son is 12, my daughter is eight and it doesn’t directly tie, uh, to financial aspects directly, but it’s analogous, right? Like they expect to receive what they want right away and they have everything at their fingertips and they can generally rationalize.

A lack of that immediate response, if it makes sense, but they’re asking questions when things don’t make sense. And so to your point, now you’ve got somebody who’s going to be, whatever, 20, 22 years old, 23 years old, getting that first job. It used to make sense. They couldn’t get paid for two weeks or four weeks because again, payroll takes time, it’s complicated, you got to do it right and your employer’s not going to do it daily.

Once they know it’s out there, they’re kind of like, well, I’ve, earned this money. I’m, basically lending it to you, right? Like I’m lending it to my employer for your own convenience and I get nothing from it. Like this doesn’t make sense. And they’re going to call, they’re going to call BS on that, right?

Mike Vannoy: that’s right. That’s right. So we talked about maybe on, on one end of the spectrum, uh, people with financial hardships, uh, you know, inflation, cost of living, uh, lagging wages compared to the rest of the economy, kind of creating the squeeze. We talked maybe the other end of the spectrum where, uh, just new entrance into the workforce and the, in this, uh, you know, a mobile first on demand real time expectation that they just simply have, uh, you know, Um, you know, throw in a little TikTok training of the prior decade and they’re in need for instant gratification and dopamine hits, they want that, they want that pay pretty quickly.

Um, what about just competition for labor? I mean, I see, I’m starting to see like, you walk into a restaurant and it’s a sign right in the door says, uh, uh, uh, get paid at the end of your shift. Things along those lines. And I just envision. In this war for talent, if I got a restaurant on one side of the street, and I got another restaurant on the other side of the street, and one says help wanted great benefits, the other one says help wanted great benefits, get paid at the end of your shift.

Which, which, which place is the workforce going to go to, right? this seems like an untapped competitive advantage for labor.

Shane Edrington: It definitely is. It does segment the labor, uh, into cohorts or labor population to cohorts, right? So like if, if you and I were to go looking for a job, I don’t think we’d be this. I mean, just candidly, I don’t think we’d be the ones looking for like, Hey, get paid tomorrow. Like it’s not going to be our thing that we were really looking for.

It might be like, Hey, do you do a 401k match or, you know, those kinds of things. But there’s a significant portion of the labor force that when they go in there, if it just says great benefits, they don’t really associate any value. I mean, really, it’s just words to them. They’re not going to use any of those things.

They have to go and select them voluntarily and pay for them. I can’t even pay for my groceries. So it doesn’t mean anything. What they’re looking for is actual upfront, Hey, how much can I get paid and how quickly can I get access to it? And Hey, what options do I have for making more if I do, you know, those kinds of things, right?

That’s really what it is. And so you’re right. I’ve, I walk into businesses all the time. I was in the grocery store yesterday and on the table of the application table was a, you know, eight and a half by 11 sign that was specifically talking about Get hired today, get paid tomorrow. Um, it’s, it’s what they want.

Mike Vannoy: Now you brought up the point, uh, this is of cohorts. So if I run a software development company, probably everybody in my firm makes enough money, they’re not living paycheck to paycheck. This isn’t a big need. Clearly this targets, uh, more entry level work, uh, entry level wages. Um, do you have data that would suggest where these thresholds sit of, you know, X dollars per hour, X salary kind of ranges, where you see, uh, uptake in utilization of these services?

Shane Edrington: Yeah. I mean, so it used to be that the window was like, you know, call it 30 to 60, 000 very much in the early days of the industry, because you had to make enough money to get into some kind of like. You know, cashflow issue, right? If you’re, if you’re 16 years old and you have no bills, I mean, what kind of cashflow crisis can you really have, right?

Uh, if you’re, you know, 30 year old with a young child and you got a, a rent to pay and bills, then sure, you’re going to have a big issue there. And the 60, 000 mark was even pretty fuzzy because even beyond that, people do live paycheck to paycheck, but those individuals tend to have outside means to cover those gaps, whether it’s credit cards, whatever else.

And that was always an easy answer to provide. It made a lot of sense, right? So you get more uptake from the manager of a QSR location than say the high school students working there

Mike Vannoy: And when you say QSR, what is QSR?

Shane Edrington: Sorry, quick service restaurant.

Mike Vannoy: Okay.

Shane Edrington: They don’t like fast food restaurants anymore. So quick service restaurant.

And so now that’s actually shifted, I think, on the top and the bottom. On the bottom, when I say the younger population, it’s more about what you brought up, which is they may not need the money. Right. They don’t have a bunch of bills, but they just expect it. And it bothers them that they don’t have it. It bothers them that you’re holding it as their employer, like it’s mine.

Give it to me. So there’s that. So that’s expanded the window down to all the way down. Like they want on demand paid just because they feel like it’s what they should have. And the top has gone up for the other things you brought up in terms of, you know, inflation and just, uh, you know, stagnant wages and whatever else like that 60, 000 is now probably 80, 000.

And so we see that window rising. And as far as living paycheck to paycheck, again, it’s increased over time. It’s now, I mean, I have a mortgage background. I’ve taken thousands of applications back in the day. And I can just tell you, unfortunately, that most people, despite what you think their job is or how much money they may or may not make very, most people don’t have any money at all put aside.

And so living paycheck to paycheck. Uh, from that point in time, which for me was, you know, 20 years ago to today, it’s actually just gotten worse. Plenty of six figure earners that are, are living paycheck to paycheck.

Mike Vannoy: Yeah. Yeah. And, you know, maxed out credit lines and credit cards and everything else, right?

Shane Edrington: Yeah, they’re, they’re doing a dance and they could, they could own a million dollar home, but you know, in two years they have to do a cash out refi to pay off a bunch of debt they accrued. It’s, I mean, there, there are habits here at play and there are bad decisions at play for sure. And I think that that’s a factor more often than not at the higher income thresholds, but at the core of that labor market, where you’re talking about The people pulling down, you know, 30 to 60 or 30 to 80, 000 a year.

Like they have unavoidable things again, that you brought up before that, that just hit them. I mean, they’re living paycheck to paycheck because things are tight and things are expensive and wages have been stagnant and then they blow a tire or their kid gets sick or they get sick or, you know, again, you know, something bad happens and they don’t have the buffer to carry them through that.

Mike Vannoy: what other benefits do you see for employers for implementing an on demand pay solution with, whether it’s Zazoon or somebody else implementing a vendor, what, what, what, what other benefits are there to employers here?

Shane Edrington: Yeah, I mean, we’ve kind of, we’ve talked about employee satisfaction, you know, kind of, um, adjacently with a lot of those other things. But the fact of the matter is that your employee base is just happier when they don’t have to, again, this isn’t all of them, but even consider taking money from the till or They don’t have to consider that they might have to next week walk up to you and ask for an advance, or they don’t have to worry about calling out because they have to go to that payday lender. So. The employee satisfaction is huge because that directly reduces turnover. And so reducing turnover and increasing the ability for employers to be competitive in the hiring landscape are the primary benefits for employers.

I mean, we have had Visa call out stats like a 29 percent reduction in turnover, which equates to around 10,000 a year in savings for every 100 employees paid. So that’s Directly the bottom line benefit to employers. I personally think that although, you know, most businesses are bottom line driven as they, they, they need to be, I do think that many employers find a great deal of benefit in just knowing they’ve given their employees something that is actually useful on a day to day basis.

It isn’t something that they’ve been sold to just add on to a benefits pool, just to, you know, kind of ambiguously extend the value of the benefits pool. This is something they deploy on day one and they see instant utilization and impact to their employee base.

Mike Vannoy: Yeah. Um, what advice do you have for employers who are thinking about, I would, I would hope, um, I mean, this isn’t meant to be a sales pitch. This is the purpose of Mission to Grow is to share information with employers to help them grow their business. I believe in my bones. This is an important thing.

It’ll be interesting to see over the next, call it 20, 30 years, you know, you’ll go back 20 years and it was. It was clear separation from a payroll being run to the payday loan industry. And here we are, this explosion of this earned wage access, on demand pay. 20 years from now, I mean, I kind of think this is just going to be the way payroll works.

It’s not even going to be this separate feature. Um, I think people would just expect that they’ll take down the money whenever, whenever they want it and probably the currency that they want it, whether it’s Whether it’s dollars or yen or, uh, Bitcoin or Ethereum or whatever it is. Right. Um, Yeah. where, do you see this continuum going?

Shane Edrington: Yeah, that’s a very, uh, we could nerd out for hours on that, Mike, and I would love doing that, um, but, but you’re right, it’s like right now, employees, again, to kind of state the same thing again, it’s like they, they, they accrue an asset that’s theirs and it sits there, so there’s inefficiencies in terms of the velocity or accessibility that they can, you know, get access to their own asset, and then when they do get it, it goes to, you know, Their paycheck, which more often than not is going to go to a banking instrument.

And it could be a bank account or a payroll card or whatever. And some physical checks obviously are still out there and in a higher number than I thought would still be the case, you know, when I look at this 10 years ago, right? So, but they’re going to go to a destination that is going to, Be some element of like a fee based or complex experience and they have to take it from there and they have to go use it at merchants and those merchants are using merchant processing and there’s a fee based or kind of some level of experience.

And so that money is really getting kind of watered down across that whole flow by way of time access and what it’s worth at the end of the day. And so I think you’re right from the area of payroll. I mean, why right now it’s been. You know, X number of minutes that I’ve been quote unquote on the job.

Shouldn’t that just be available to me right now? And I can take that mindset. Like it’s not even my full day. I’m just like, it works. Like, where’s it, where is it? Like it could get that like available.

Mike Vannoy: well, you used the example earlier. I mean, I could, if I’m struggling, do I take a PTO day and fake that I’m sick so I can go drive Uber or DoorDash? That, that day too, cause I need the money that night, right? So this isn’t just the kids coming up and those stinking kids and their, their, you know, bad expectations.

This is, this is just the, the, I’d say the mega trend that I don’t think any of us are stopping.

Shane Edrington: No. And I think it does have application that is specific to, again, particular cohorts of individuals or types of employment, and this goes back to, I think, a conversation around like the, the. The COVID times when, when virtual work was really born and we would talk a lot about, Hey, you know, virtual work and the flexibility of it.

And as long as you get your job done, you work whatever hours you want, and we would tout those benefits. And then we’d go, Oh, well, actually there’s certain types of jobs where that isn’t the case. Like they’re, they’re, uh, in a job where you literally have to work minute by minute in a particular window of time.

And all these things we. And so I think that also goes in this conversation a bit, like, so for me as a quote, unquote, you know, my, my role is I lead a sales team. And so do I earn money minute by minute? Not really, but maybe, uh, a person who’s in, um, customer support who has an eight hour shift, maybe, maybe they do, or maybe an hourly worker at a quick service restaurant, maybe they do.

And so it’ll be interesting to see how that evolves by way of like how people get access to at the granular level, what they’ve earned or haven’t earned and where that access Uh, how, how it, how it works, where can they put their money? How can they spend their money? Can they spend their money directly from, from, you know, their paycheck, as opposed to having to go through layers of transferring funds to bank accounts and POS servers, et cetera, et cetera.

Like we’re in a phase where we’re moving middlemen. All over the place. Um, even in, in real estate, we saw an announcement over the weekend that they, uh, uh, I, I’m not going to say this very well, but like they changed how that kind of classic 6 percent real estate fee was fairly like mandated, or at least like just accepted.

And they’ve, they’ve shattered that. Right. So we’re also going to see that kind of play out when it comes to various financial instruments in different levels.

Mike Vannoy: Yeah, that’s right. That’s right. Um, so I retried just a bit. Hopefully, this kind of makes a whole bunch of sense. It’s like, okay, uh, I’m an employer. I want to, I want to help my employees as much as I can in an anonymous way that they don’t have to share their financial burdens with me. Maybe I’m working on razor thin margins and maybe I’m, maybe I’m not, maybe I’m losing money and I’m just trying to survive as an entrepreneur.

Uh, so I don’t have more money to give them, but let’s talk mechanics about implementing this because this doesn’t cost the employer anything. This is really about logistics of rollout in, in activation, right?

Shane Edrington: Yeah, so the vast majority of providers, it doesn’t cost the employer anything to implement. The implementation process, uh, can be very streamlined and simple. Like, you know, some will actually have you activated within a matter of minutes if you’re not already activated. And it’s more about just like an awareness exercise.

And sometimes there’s, there’s steps for implementation. So there could be setting up file transfer protocols, or where are they going to get the data that they need, you know, et cetera. So it depends on, you know, You know, who you are as a business, what your capabilities are, where your data lies, uh, how much time you want to invest in the upfront process and then what is required by the vendor that you choose.

Mike Vannoy: But in, in full transparency, again, that’s not a sales pitch. We’re just sharing information about our relationship. Assure has a strategic relationship with Zaytun where we have all this integration already built. So if you’re an existing customer, you could simply just turn this on for your employees.

They can start accessing it like within minutes today. Uh, or if they’re, if you’re not an Assure customer, you join, you get on payroll, but inherently as part of. our payroll service, all of your employees then have access to this because we already have the integration pre built.

Shane Edrington: Yeah, exactly right. And again, not sliding into a sales pitch, but just because we talked about the factors of the business as it relates to like, Uh, being a lot better than say like a payday loan operation by way of risk and transferring costs, you know, et cetera. Even within the scope of on demand pay providers, providers have made choices, right?

And those choices are how much risk we’re willing to take even in this far lesser risk continuum than say a payday lender might take, but how much risk are we willing to take and how are we going to, you know, either give our customers or the employees optionality around destination and does that provide revenue, all these things they have to do, right?

And so. You have to look at the vendor and say, what choices have they made and what benefit does that provide me as an employer or put on my back as a thing I have to cover, right? And so expenses, yeah, we’ve all as providers pretty much settled into the fact that, um, you know, it’s going to be free. But free in terms of like, do you have to provide, uh, you know, time and attendance files daily or manager approved hours daily?

Do you have to, uh, put up a funding account for the advances so that the provider doesn’t have to carry the capital, right? All these things. And so for us, the decisions that we made at DayZune, uh, was to bind ourselves very tightly and closely with amazing payroll partners like Assure. And so via that integrated tight access to data and that relationship with the payroll partner, the client.

All of your clients, as you said, can have Zazen turned on in seconds and employees can use us in minutes from those seconds, right?

Mike Vannoy: So all that said, if I’m an employer, what is uh, what does a successful rollout to my workforce look like? And I’m thinking there’s existing employee communications, And how do I, how do I maybe encourage is the wrong word. Cause I, I want to, I want to create the, I want to let them know of the opportunity that exists, but I also want arm’s distance so that I’m not up in their business.

About around private matters. But so there’s, I’m thinking there’s two big buckets. There’s the existing employees. How do I communicate with them to get this rolled out successfully in a way that is defined successful by the employees, not me, but then I’ll, as the employer for this war for talent, how do I, how do I successfully implement a non demand pay solution to recruit and retain?

Shane Edrington: Yeah. So for the existing employees, you know, and again, this is, you know, I think many providers are utilizing the same basic tools, but I can just speak for what, what we do. Um, you know, we, we provide the collateral for awareness so that the employer isn’t having to say. Hey, you know, every single day, Hey, remember you have this, remember you have this, remember you have this.

There’s, there’s a poster in the break room that provides information. There’s often information that’s handed out at the time of hiring. There are, you know, say the employee might actually receive an invitation to, uh, enroll at the time of hiring, either from the employer directly or from, from us in some cases.

And so the awareness of the existing employee base is actually pretty. Pretty, pretty clear as to how that’s done. Uh, it does fluctuate a bit by, uh, kind of determined by what the communication tools that employer may or may not have. And actually what I’ve learned in the last, you know, a few years in particular is that employers are actually pretty limited in the ways they can communicate with their employees quite often.

So we, we fill that gap by doing it for them or by, you know, giving them tools. to

Mike Vannoy: Anything more specific, Shane? Like, like Like what, what platforms or means do they not have available that you might’ve suspected? What are the ways that you guys fill the gap?

Shane Edrington: Yeah, like even just emailing employees in some cases, right? There’s not a tool that makes that simple for them or texting employees is definitely not something they currently have a lot of access to. And so it’s kind of like what I’ve always called like reporting, right? The people would always assume that employers or just any business would have access to really great reporting tools, but reporting is always a limiting factor against most things that employers use when it comes to software platforms or whatever else.

And so communication is much the same. Um, and so again, we, we, we don’t claim to have an expertise in doing that, you know, sending text messages for them or sending emails for them, but we will fill those gaps because employers want employees to have the awareness and they just find it to be cumbersome, uh, to do it themselves.

And so that that’s kind of on the existing employee base and also aligned with like onboarding new employees. So we’ll give them all the resources they could want for that to be as, as seamless and easy for them as possible. When it comes to like applicants, you know, we will have, uh, Clients put on demand pay in the job listings.

And so when an employee comes on and looking for a job, it won’t just say X dollars per hour, it’ll say, you know, on demand pay available right away or whatever it might be. So they’re doing that. Uh, there’s stickers on windows that say, Hey, this employer, uh, is empowering the financial condition or financial wellness of their employees through Zazoom.

So for us, and I’ve seen that with other providers as well. And so employers can tout that they’re doing that for employees. Um, those are probably the most common ways I would see.

Mike Vannoy: when it doesn’t go well, what are the mistakes that employers make? What are the mistakes employees make?

Shane Edrington: Employers, and again, not, not from the sales element, but just quite pragmatically, employers just choose the wrong provider, right? Um, and, and wrong is not like, oh, that provider’s bad. I mean, I, we have great relationships with, with many on demand pay, you know, quote unquote competitors, but they choose one that just doesn’t quite meet.

What they have the capability to, um, deploy, right? So if, again, to be very specific, if that provider requires daily up upload of, you know, CSV based, uh, timesheets, it may sound easy enough on day one, but after you’ve done that, you know, 147 days in a row and six rows are inaccurate 40 percent of the time, which means all those employees, et cetera, et cetera, it becomes very tedious.

And you go, man, I really shouldn’t have done that. I’m not a large enough entity to justify having a person have a full time job in, in managing this, uh, on demand pay provider. So that’s probably the most common is choose one that is what you need it to be. And for most SMBs, that means it should be free and hands off and automated and seamless.

to that’s a really good point. I will, I will say, I mean, that, that was one of the big reasons why we chose you guys. We’ve vetted everybody. And I think lots of really good, well established vendors in that space that’s just growing so fast. But it was because you guys had the willingness to work with payroll only clients and didn’t require these daily time of attendance feeds.

Mike Vannoy: I mean, if you’re, you know, we’ve got a lot of customers that use our time of attendance, whether it’s a facial recognition or it’s a badge swipe or a fingerprint or whatever. Um, but if you’re a restaurant that has, your employees are already punching in on the point of sale system. I mean, now how do you get that information into payroll and then that into an on demand pay vendor?

We just want it to be as simple as possible. So, I mean, that makes a lot of sense to me.

Shane Edrington: Yeah, and I will say like, you know, we, we focus on this internally as well, like we, we do use and we very much prize, uh, time data, like why, why wouldn’t you, it reduces risk, it makes it, um, you know, the, the earnings, uh, precise, you know, as far as exactly what the employees earned, but, uh, I think, in line with your point, there, there’s a lot of clients that do use time, um, Platforms and it’s, and it’s in a solution that makes it easy to get that data out to provider.

There’s a lot of companies that use a time platform that it just isn’t very simple to get that out. And they have to do a lot of manual steps and there’s a lot of companies that just don’t use time systems. Um, and so for all of those, the best that we do and what we really have sat into and gotten quite good at is looking at the historical earnings and using an algorithmic calculation of those earnings with which to impute what an employee has earned.

And we’ve done retrospectives and we’ve. We’ve gotten quite good at it. Uh, and that means that we can give a ubiquitous offering to a client and not have to worry about, you know, some can use it and some can’t,

Mike Vannoy: Shane, anything else that employers do you think need to know about on demand pay?

Shane Edrington: you know, it is, and I lovingly tell this to my, my sales team, right? It’s like the selling on demand pay is not, it’s not hard. It’s free. It has amazing value. People are asking for it. Like the only really The things you have to overcome are the inaccurate assumptions of what on demand pay is or isn’t, or what it takes to deploy it, right?

And so it’s not that common anymore, but our conversation around kind of that paternalistic view of, Oh, this is bad for my employees. Like that’s far less now than it used to be, but you kind of cover that. Um, but more so than not, it’s like just the assumption that it’s costly or it’s, it’s a hassle, or it’s going to take a lot of their time or they have to fund it themselves or whatever it is, like.

As soon as you shoot down all those things, there’s not much else that employers need to know. I mean, it’s, and I love how you phrased it earlier, I can’t remember exactly what you said, but like, it’s just like, it, it, it, there’s no reason not to do it is what I would throw out there. And by all means, if somebody can find a reason other than like a particular requirement of a particular vendor based on the capabilities of an employer, like other than that, I, I, I don’t know why.

Every employer wouldn’t have this live imminently.

Mike Vannoy: Yeah, that’s right. That’s right. Okay. Shane, uh, super helpful information. I think, I think there’s still an awakening that’s happening. I feel like there’s this trend here where the employers have always done what they had to do to pay their employees. And I’m getting this kind of Mad Men, uh, scene replaying in my head.

Uh, you know, uh, your compensation is your reward. What are you complaining about? There’s this kind of old school. Mindset of, uh, employers to provide the pay and yes, benefits as I’m required to by the Affordable Care Act, uh, or to be competitive in the marketplace. But I, but this war for talent, I keep coming back to it.

It’s real. And this is, this is a new world we’re in. This is not just a post pandemic world. This is a, the, the, the demographics literally have changed based on birth rates. 30, 40 years ago, um, that there aren’t the replacement workers entering the workforce as there are retiring in that shrinking pool, unemployment’s at 3.

7%. It’s been here for about two years. That’s about, that’s the lowest it’s been at that rate for almost 40 years. This is not going away and it doesn’t matter who’s sitting in the White House. It’s a, it’s, it’s a supply of labor issue. And so if employers are gonna be competitive and attract entry level workers, um, and this isn’t just entry level, you talked about 60 That are consuming this product and accessing their wages, uh, in this way.

Uh, man, I just can’t imagine why you shouldn’t consider it. I think it’s a shifting of mindset from employers of what is, what is the payroll and HR and benefits transactions that I must process versus. Okay. What are the additional things that I can do to help my employees in ways that maybe aren’t traditional in, in, in that, you know, I’m rambling here, but it, it, it, it is part of a different mindset I think employers need to engage in.

Shane Edrington: It is. And I think, you know, I, because I’ve been in this space for so long, I had to remind myself that and use the term awakening, right? Like that, that is the case. Cause to me, I feel like, oh man, it’s where we’re so far along and we’ve been doing this forever and everybody must know about it now. And, and even outside of employers, like just talking with all the personnel under, under our partners and like in a room of account managers or sales rep or whoever and say, Hey, who knows what on demand pay is?

And it’s definitely a good chunk, particularly with partners like Assure, where it’s like, Hey, we’re really getting the word out here. But like, there’s still a lot of payroll professionals that have no idea what it is. And then if you go down a layer to businesses and maybe even like attack it from like a, um, uh, you’re just out and about and you, you have a conversation with a buddy or somebody who owns a business and you bring it up and they’re like, What is that?

I have no idea, right? Like it’s still a huge amount of space to cover to get people, not only to deploy it, but to even understand what it is.

Mike Vannoy: Yeah. Yeah. Very good. Well, hopefully today’s conversation is, uh, a help in, in helping people to see what it could be and how it might help their business and, uh, more than just being altruistic in trying to help your employees, it’s a damn good thing to do in and of itself. Uh, but for the capitalist pigs, uh, among us, uh, that, that there’s real business benefits to you as, as, as a employer as well.

Shane, thanks for joining me today. I really enjoyed the conversation

Shane Edrington: Yeah. My pleasure. Appreciate the invite, Mike.

Mike Vannoy: and everybody else. Uh, if you got value from this conversation, if you liked it, I would encourage you to like, comment, or share. Uh, subscribe on the platform of your choice. Uh, go to our YouTube channel and subscribe there. Uh, until next week, we will talk to you and hopefully join you in your mission to grow your business.

Thanks Shane.