Attract and Retain Hospitality Talent With On-Demand Pay 

It’s no secret that hotels are struggling to attract and retain talent these days. Even as we continue to recover from the economic impacts of the pandemic, many hotels are still struggling to fill the roles they were forced to eliminate back in 2020. And retention continues to be an issue. According to the Bureau of Labor Statistics the turnover rate among leisure and hospitality businesses was 6.2% as of May 2023 — higher than any other industry reported.

To overcome these challenges, hotel leaders are doing everything in their power to not only catch the eye of top talent but also keep them around long-term. So if you’ve been pulling out all of the stops you’re not alone — whether that’s flexible schedules, allowing employees to pick their preferred shifts, and even offering higher pay. 

As it turns out, however, offering higher pay isn’t always the end all be all when it comes to hiring. In fact, a recent Hireology study found that for 77% of hospitality job seekers, pay is not their number one factor when determining jobs to apply to and accept. So if your hotel can’t compete on pay, there’s another way you can use money to incentivize potential employees to join your team: by offering on-demand pay.

What is on-demand pay?

Instead of making employees wait a full pay period to receive their paychecks, flexible or on-demand pay allows employees to receive the money they’ve earned whenever they want. Other names you might have heard for on-demand pay are earned wage access (EWA) or instant pay, but they all refer to the same concept: letting employees use the money they’ve worked hard for when they need or want it, whether that’s one day into the pay cycle or the day before checks are printed.

While on-demand pay has been around for decades in the form of pay-day loans, where employees are left with covering startling interest rates, many payroll providers allow employers to add a daily pay option at little to no cost to the employer. On-demand pay isn’t necessarily a new concept — but it can be just the edge your company needs to meet your hiring goals. Don’t believe us? Big names like Walmart and PayPal are already using this strategy to recruit new hires. If it’s worked for them, it might just work for your business too.

Life waits for no one — and neither do bills. Since most of the workforce lives paycheck to paycheck, on-demand pay is a way to help new employees get back on their feet. In fact, recent data has shown that up to 60% of employees would like more flexible access to pay. Even if employees do not take advantage of this program, having the option to access earned wages when they need it could become the competitive advantage your business needs to recruit top talent.

How to offer on-demand pay

For employers who have had difficulty filling necessary roles, like front desk staff or housekeepers at hotels, offering on-demand pay could be the competitive advantage you need to attract and hire more workers. We all know that a large part of the hiring process is meeting candidates where they are and speaking to them in a way they understand. 

We also know that implementing an offering like this is certainly easier said than done. Making a big change to how you run payroll can create cash flow challenges for your business. On top of that you need to pay attention to compliance issues (e.g., is the proper tax being withheld every time an employee withdrawals their paycheck?). The right payroll provider can cover the latter but addressing your financial issues is certainly something that needs to be addressed on an individual business basis. 

With that said, what can you do to get the conversations started around on-demand pay and market it to your ideal job seeker segment?

  • Work with your finance team to determine how this might impact the budgeting process — how will smaller, more frequent withdrawals impact your overall cash flow?
  • Make sure that your payroll system enables on-demand pay — if not, consider switching to a provider that does offer it.
  • If your payroll provider does offer on-demand pay, chances are there is a fee involved. Determine what that fee is and figure out if it’s feasible for your company to cover it partially or completely so it doesn’t fall on the employee.
  • List on-demand pay as a benefit everywhere — in your job descriptions, on your organization’s social media posts, on your career site, etc.
  • Have your recruiters play up on-demand pay as a benefit to candidates during the screening process; you want the candidate to be reminded of it every chance you have to organically work it into the conversation.

While it may seem that paying employees more was the only option to attract more applicants to your open roles, this simply isn’t the case. With on-demand pay, you can give potential candidates more than just money in their hands faster; you can promise them a future with a company that listens and understands their needs in this modern labor market. 



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