Employers considering paying their workers on a daily basis should think again, a new survey suggests.
That's because daily paychecks can have long-term negative fiscal implications for your employees—most of whom don't want to get paid daily anyway, according to a survey from financial website GO Banking Rates.
Worker expectations are increasing in this tightening job market, allowing employees to call more of the shots.
This has lead to what CBIA's human resource counsel Mark Soycher refers to as "benefits bling," where companies try to attract talent by offering unique benefits, including daily pay.
That's why there are now payroll services that allow employees to decide when they will get paid—monthly, biweekly, weekly, or daily.
But according to the survey, 42% of employees don't want daily paychecks because it can create budgeting problems.
Daily paychecks also have a connection to jobs with less pay and meager long-term savings for the employee.
Small businesses that struggle to hire and retain talent workers may be more likely to consider daily pay as a way to attract that talent.
But first, small business owners should consider how most people get paid.
The survey found that 58% of workers get paid biweekly, 22% weekly, 10% monthly, and just 4% on a daily basis.
Considering that only 4% of people get paid daily, small businesses should realize that most workers don't want daily pay.
The survey also found that 24% of employees don't want daily paychecks because they prefer to see a larger amount on their check, 17% said they would spend more money if they got daily paychecks, and only 8% said daily pay would help them budget their paychecks better and grow their savings faster.
One reason workers don't want daily pay is because major expenses—mortgage, rent, car loans, and utilities—are due monthly.
Getting paid once or twice a month makes it easier to set aside money for these payments.
"The data shows that most Americans are not ready for the move to a daily paycheck ," said Rob Poindexter of GO Banking Rates.
For most people, spending and budgeting habits are built around that weekly or biweekly paycheck, he said.
"Those habits have yet to evolve to the point where they could handle such a drastic change in their financial schedule," Poindexter said.
"The majority of respondents believe they would struggle financially if they were paid daily."
It shows that paying employees daily is something small businesses should avoid, he said.