the evolution of pay - payroll · top 5 things to know about generation z 1. lower expectations...

Copyright © 2019 ADP, LLC.Copyright © 2019 ADP, LLC.

The Evolution

of Pay

Research Presented By

ADP

2019 Carolinas Payroll

Conference

Copyright © 2019 ADP, LLC.

Introductions

George Mavrantzas

Vice President of Strategy & Thought

Leadership

Global Cash Card, an ADP Company

• Two decades experience in prepaid card industry

• Exec management, Business Development, Project

Management, Customer Service, Implementation,

Relationship & Account Management

• Member, ADP Wage Payments Exec Team

• Payroll, HR, Treasury event speaker & thought leader

• National Member, American Payroll Association

• Member, National APA Speaker’s Bureau

• APA Citation of Merit 2014-2018


The Value of ADPRI’s Insights

ADP Research Institute®’s unmatched source of empirical data

facilitates deep insights into the labor market.

Since its launch in 2012, the ADP Research Institute® (ADPRI) has

leveraged ADP’s empirical data to conduct research that provides

transparency into the labor market and illuminates crucial employment

and workforce management trends. All research findings are available

as a public good.

We pay 1 in 6 workers in the U.S., and we serve more than 740,000

clients globally.

The ADP National Employment Report provides a count of the

monthly employment growth based on real, transactional payroll data.

The ADP Workforce Vitality Report is a quarterly measure that looks at

the dynamics and key market indicators beyond employment growth,

such as wage growth, hours worked and turnover rate.

In addition to looking at wage and employment data, the ADP

Research Institute looks at other workforce issues including pay

equity, talent management and compliance issues.


In This Presentation We’ll Cover...

• Generations by Birth Year

• Top 5 Things to Know About Millennials & Gen Z

• Driving Forces Changing the World of Work & Pay

• Survey Demographics & Methodology

• Key Elements of Pay

• Diverse Workers, Diverse Pay Priorities

• Employer/Employee Perspectives

• Financial Wellness & Performance

• Conclusions/Q&A


Meet the Millennials

• Born 1977 to 1995 in the U.S.

• Approximately 83 million in the U.S.

• Most diverse generation in U.S. history

• Fastest growing generation of American

workers and consumers


Top 5 Things to Know About Millennials

1. Millennials are not tech savvy, but tech _________

2. Delayed adulthood and potential generational

dislocation

3. Millennials are entering their wealth accumulation

stage and will outspend Baby Boomers this year

4. Millennials have the least established customer

loyalty and are the group most likely to refer their

friends

5. Millennials now drive every major consumer and

workforce trend


Top 5 Things to Know About Generation Z

1. Lower expectations upon entering the

workforce than Millennials

2. More frugal with their spending and

ambitious with their saving

3. Intentionally choosing to attend less

expensive colleges

4. First truly mobile-only generation

5. They think Millennials are old!


Driving Forces Changing the

World of Work and Pay


Change is Constant. So is Competition.

Attracting talent is an increasing challenge

• Record employment rates

• Shifting priorities and values among workers

• Dynamic shift in workforce composition

The world of work and pay is changing

• Next gen workers have different demands

• New non-traditional payment technologies

and consumer behaviors

• The gig economy presents new challenges for

employers and 1099 workers


Study Goals & Methodology


ADP Research Institute

Study Methodology

• The survey was conducted among 500 employers and

1,000 (mostly W2) employees at companies with 50+

employees, in addition to 896 contract/1099 workers with

no restrictions on company size

• Online interviews were conducted with participants in

July, 2018

• The study aimed to reveal perceptions of traditional and

emerging payment methods among employers and

employees. Employee results were aggregated and

analyzed by generation.

• Perceptions around how pay is delivered (direct deposit,

check, paycard, etc.) and when it is delivered (same day,

early access) were examined


Pay Priorities & Preferences


Security, Speed and Flexibility

• Security is key (60% of respondents)

• 3rd party data security risks

• Speed & Flexibility

• Off-cycle payments

• Ability to choose frequency

• Fee for early access to pay

60% of employees said the ability to select

pay frequency, same day pay, early access

to pay, or paycards would make a

difference in whether or not they accepted a

job


Financial Wellness

• Control over day-to-day, month-to-month

finances;

• Capacity to absorb a financial shock;

• On track to meet your financial goals

• Financial freedom to make the choices

that allow you to enjoy life

Source: CFPB https://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf

SAVINGS

INCOME

BUDGETIN

GSPENDING

DEBT


Financial Wellness

95% of employers say

employee financial

wellness impacts their

company

74% of employees want

to work for a company

that cares about their

financial wellness

• 95% of employers say employee

financial wellness impacts their

company

• 74% of employees want to work for a

company that cares about their

financial wellness

SAVINGS

INCOME

BUDGETIN

GSPENDING

DEBT


Diverse Workforces, Diverse

Pay Priorities


Profiles & Perspectives

• Millennials and Next Gen

Workers

• 1099 Workers

• High Income Workers

• Hourly Wage Employees

• Parents


Millennials & Next Gen

• Prioritize speed

• Mobile & Digital

• Millennials - “Tech Dependent”

• Gen Z - “Tech Savvy”

• Less likely than older workers to use bank accounts

or credit cards

• Desire off-cycle pay, even if they have to pay a

small fee

• Consider payroll and retirement plan providers

equally trustworthy for financial advice

• Willing to share information with payroll provider to

get money advice


1099 Workers

• Struggle to collect payments in a timely

manner

• Prioritize reduced steps & cost to

use/access pay

• Find same day pay and choice of pay

frequency particularly appealing

• Financial wellness challenges: managing

taxes & timely payment


High Income Workers ($75K+)

• Would pay a fee for early access to pay just

as often as those earning less money

• Less likely to use early access for

emergencies or unexpected situations

• Trust financial advisors and retirement

planners most for financial wellness


Hourly Workers

• More stress on payday

• More likely to review paycheck details

• Place less trust in financial advisors,

retirement plan providers, and their

employer for financial wellness advice

• More likely to say same-day pay would

impact their decision to accept a job


Parents

• More stress on payday

• Interested in early access to pay for

emergency/ unexpected expenses

• Those with kids under 18 have a greater

interest in alternate pay options and

financial wellness support


Employer/Employee

Perspectives


Employers Say: Employees Say:

Pay vs. PerksPay is more important than perks:

67% say pay matters more than pay-

related perks

Pay Options Matter:More than half of employees said pay options would make a difference in accepting an offer

Customized or

Choice

Customized Options73% said they needed to offer customized

pay options to compete

Choice over Customization:Employees focused on choices and flexibility

(e.g., ability to choose pay frequency > early pay

Going MobileMillennials Go Mobile

Employers assume Millennials want digital or mobile pay more often than Gen Xers

Not Ready for Mobile:Only 12% of Millennials or Gen Xers said they

preferred mobile / digital / alternative pay

Same Day Pay

Same Day Pay is a Perk:Employers saw same-day pay as a perk

with limited appeal.

Early Access is Critical:Over half of workers would pay for early pay

access for emergencies/unexpected expenses

.

Employers and Employees Have Conflicting Views


Pay and attitudes about

financial wellness


Employer Attitudes About Financial Wellness

Of employers say that employee

financial wellness has an impact on

their business

Of employers say offering financial

wellness tools and solutions would

help their company attract top talent

81%

95%


Employee Attitudes About Financial Wellness

Indicated financial wellness was

important to overall well-being

Wanted to work for an employer who

cares about their financial wellness

Say employers should take an interest

in their financial well being

Of younger workers say they would

share personal information with a

payroll provider to receive money

management tips/best practices

73%

72%

74%

85%


Research Conclusions


Pay has a deep influence &

impact on workers

• Impacts recruiting, retention &

performance

• Can help address the demands of evolving

work models

• Needs to evolve to meet the needs of next

gen workers


Secure, fast & flexible pay choices

have a broad appeal

• Flexible options for pay and early access

appeals to a diverse demographic

• Early pay access is attractive to hourly,

1099 and high wage earners

• Employers and employees both agree that

promoting financial wellness can boost

performance & attract talent


Questions and Answers


Thank you for attending!

Subscribe to our Eye on Washington email

alerts at www.adp.com/eyeonwashington

For more workforce trends and insights,

check out www.adp.com/blogs

For more information on Paycards please

visit www.adp.com/wisely

The information provided in this document is for informational purposes only and not for the

purpose of providing legal, accounting, or tax advice. The information and services ADP

provides should not be deemed a substitute for the advice of any such professional. Such

information is by nature subject to revision and may not be the most current information

available.

ADP, the ADP logo and ADP A more human resource are registered trademarks of ADP, LLC.

All other marks are the property of their respective owners. 2018 (c) ADP, LLC. All right

reserved.

http://www.adp.com/eyeonwashington

http://www.adp.com/blogs

http://www.adp.com/wisely

the evolution of pay - payroll · top 5 things to know about generation z 1. lower expectations...

Documents