The restaurant industry is growing to a historical height, with industry-wide sales expected to surpass $1 trillion this year for the first time ever. Beyond revenue, we can expect to see this growth continue through employment. Restaurants are projected to add 200,000 new jobs in 2024, which would bring total industry employment to 15.7 million.
Despite this growth, hiring and retaining strong talent remains a top concern for restaurant leaders, and remaining competitive in the job market is more crucial than ever. Of these new 2024 hires, many of them will likely be Gen Z, a generation that is already making up 49% of all food service workers. But, in order to remain competitive and attract and retain Gen Z workers, businesses must understand their unique needs and expectations.
Gen Z workers prioritize flexibility and work-life balance, with nearly half of respondents in a recent report saying that work is still central to their identity, yet not something they are willing to take precedence over their well-being. As a result, they have high expectations for financial benefits and wellness, which may be due to a lack of financial security across the generation. Gen Z struggles financially more than other generations by 70%, with only 31% feeling financially secure and 52% being worried about not having enough money.
Gen Z workers are looking for employers who are aware of their financial insecurity and can help them address it and build their financial wellness. How can restaurants meet these expectations? The solution lies in pay optionality.
What is pay optionality?
Pay optionality is a multifaceted approach to financial benefits that offers employees flexibility and control over the way they receive and access their earnings. While many companies claim they offer pay optionality, it often comes with the caveat of paying exorbitant fees to access wages or predatory lending practices like payday loans. By embracing pay optionality, restaurants empower employees to choose how they want to receive their compensation according to their unique needs and preferences with fee-free options. This can enhance job marketing competitiveness, employee satisfaction, and retention across all age groups within the workforce.
Gen Z has already expressed significant interest in more flexible payment options. For example, in our previous Wages & Wellbeing report, 87% of Gen Z reported they would be more interested in applying for a job that offers earned wage access, a financial benefit that enables employees to be paid their wages after completing their shift.
The highlight of a solution like earned wage access is an example of pay optionality. By freeing employees from the limitations of traditional payroll cycles, the benefit gives workers the ability to access their wages on their terms. Effectively, getting paid how they want, when they want and where they want.
Selecting a vendor
All earned wage access vendors offer their solutions via different models, some of which can negatively impact employees through hidden fees and limitations. Before implementing an earned wage access or tips solution, take into account the following considerations:
Eligibility for all workers: As of 2024, Gen Z includes individuals aged 12-27. While the minimum working age varies state by state, a significant number of individuals under 18 are currently eligible to work. Therefore, when selecting an earned wage access vendor, it’s important to partner with a solution that caters to all ages. The majority of EWA providers are unable to extend immediate access to pay for workers under 18 due to Customer Identification Programs (CIP) that are part of onboarding processes. At Instant, pride ourselves in extending EWA and electronic tips benefits to all employees, regardless of age.
Ease of use and accessibility: Businesses should also prioritize ease of use and accessibility when choosing an earned wage access vendor. For example, the majority of Gen Z grew up as digital natives, favoring innovative technologies over traditional ones. Choosing a vendor with the option to access pay options through a mobile app, for example, would likely be a better fit, with 75% of Gen Z saying mobile phones are their communication device of choice.
Various payment options: While offering earned wage access itself is a form of pay optionality, it is also important to choose a vendor that provides various payment options. For example, at Instant Financial, our solution offers multiple main payment options: (1) Payroll Cards – a card through which employees can access their wages instantly, fee-free, and without requiring a connection to a traditional bank account. (2) Earned Wage Access – a solution that allows employees to receive a portion of the wages they have already earned, prior to their next scheduled payday. (3) Electronic Tips – a solution that provides employees with instant electronic access to their tips after every shift.
If you’re interested in learning more about earned wage access, electronic employee tips or a pay card solution, and which model is right for your business and workers, schedule a meeting with an Instant Financial representative by visiting instant.co/hello.
