Dive Brief:
- San Francisco-based Flynn Restaurant Group partnered with DailyPay to offer instant pay services, according to Nation's Restaurant News. The services allows employees to gain instant access to their earnings for a fee that ranges from $1.99 to $2.99.
- The restaurant operator began rolling out the software two months ago at its Applebee's locations and is now available at all 460 restaurants and 20% to 25% of Applebee's employees are using the app.
- Flynn manages more than 1,200 restaurant locations including Taco Bell, Applebee's, Arby's and Panera Bread encompassing 47,000 employees. This partnership makes Flynn DailyPay’s largest restaurant industry client.
Dive Insight:
As the restaurant industry faces a record-low employment rate, some operators have experienced trouble attracting and retaining talent. Flynn notes that the turnover rate for Applebee's employees is 88% while Panera Bread is 95%, for example, according to Nation's Restaurant News. Its QSR banners experience staggeringly high turnover rates just above 200%, while the industry median is 145%.
Offering a digital and convenience-related perk may help draw some employees and retain existing ones. The service will likely be appealing to workers, with 78% of workers living paycheck to paycheck, according to Forbes. Nearly three-quarters of the workforce admits to worrying about their personal finances while at work and 40% of Americans would struggle to come up with $400 to pay an unexpected expense, according to the Federal Reserve.
The ability to access funds in a more flexible fashion may alleviate some of the stress that comes with waiting for the next pay period while giving users more control over their financial future. As a result, employers across multiple industries are embracing technology that increases productivity and reduces employee turnover rates like instant pay services to address employees' financial woes. A few chains that have adopted instant pay systems include McDonald's, Outback Steakhouse, Church's Chicken, Pizza Hut and Checkers, for example. DailyPay also works with Sprinkles Cupcakes and franchise operators of Burger King, Taco Bell and Boston Market.
Despite the warm welcome for the technology, some have noted that security challenges remain as well as the risk of fraud, according to PYMNTS. Modern Restaurant Management also suggests that restaurants should proceed with caution when adopting the service by first ensuring that employees are classified correctly under the law and to ensure that any deduction requirements are followed.
