0:00:05 Welcome to the HR Tech Spotlight Podcast. I'm Deanna Shimota, CEO of GrowthMode Marketing. The HR technology market is crowded and we know it can be hard to find the best software solutions for your business in the Sea of Sameness on this podcast, we shine a spotlight on some of the best up and coming technology options out there. Check it out if you are interested in learning about new, innovative solutions available in the market, and if you are with an HR tech company and interested in being considered for a guest bot, stay tuned for details at the end of the show.
0:00:45 Hello everyone. On this episode, I'm excited to feature DailyPay. My guest is Gino Pelosi, Chief Marketing Officer at the company. DailyPay is a company on a mission to build a new financial system by delivering an on demand pay solution with insight driven pay strategies that help employers to activate their workforce and build stronger relationships with their employees so they feel more engaged, work harder, and stay longer.
0:01:11 Gino, it is great to have you on the show.
0:01:14 Thank you for having me. I'm excited to be here.
0:01:17 So I know when we were talking before we hit record, you mentioned you didn't come from the HR tech space, but tell us about your background.
0:01:25 Sure, I came on board about a year ago, but prior to that, I spent most of my career in it, both as a consultant and leading various marketing teams, always typically surrounding data and analytics in the solutions that we offered and the solutions that I helped to market. So that background in particular kind of shaped who I am as a marketer, but it also shaped on what I think we as a company, and myself included, can bring to the HR space in terms of continuing to evolve where HR is going and how they're leveraging both the solutions, the technologies and the data to really make a difference in the employees that they support.
0:02:06 So I think that background in particular is super helpful for me to kind of say, how do we actually change the game for companies and the HR teams that support their pEople?
0:02:19 What is the story behind Daily Pay? I know you've only been there less than a year, but give us some insights.
0:02:28 Yeah, I mean, the company started back in 2015, right, in New York, and it was on a mission at the time to really fundamentally change the financial system and really look at the way that money moved.
0:02:42 Right.
0:02:43 We recognized at the time that there was a lot of historic ways that people were being paid two week pay cycles, and that's somewhat archaic.
0:02:51 Right.
0:02:52 And it was really putting challenges and stress on the people that needed the money for various reasons. And there was no reason to not fundamentally change and expedite the way that people got paid. And it was really this mission on saying, how do you change those kind of invisible or archaic rules of money and say, how do we actually start thinking about allowing people to get paid the moment they start working?
0:03:17 There's no reason that the technology and the data isn't there to enable that. And it's really made a fundamental difference in how companies and people are approaching not just their finances, but the way they think about the companies they work for.
0:03:34 Let's talk a little bit more about daily pay and the services that your organization offers.
0:03:41 Sure. Daily pay, at its essence, is an employer sponsored benefit. This benefit is something that is put up there, right, against the 401, the health care, and the various tuition reimbursements. And the benefit is essentially something that is enabling people to get access to the funds the minute they complete a shift. And the way that it is enabled is essentially we connect into all the various timing attendance systems in the payroll system, so we have an accurate view of real time insights into the shifts people worked and also the estimated what else called the net pay that they have after their typical withholdings that then allows the people to have that control and visibility.
0:04:29 Right. On an app. Right. Or any type of system. 24 7365. So you have the ability now to see your work, and you see the payoff for the work, and you access that money not just to necessarily pay bills on time, but also to enable them to save, auto save, and to do the things that they need to be able to do. And that isn't necessarily in a two week pay cycle schedule. Right. Bills come at us. Life comes at you hard, and you have to be able to flex, and this gives them that flexibility.
0:05:01 The actual application is super easy to use. It's intuitive. It's meant for people to go in. A lot of people just go in, look at it, and have that peace of mind, and then they have the ability and the control over how to use it and when to use it. So it's really a API integration that with all those hundreds of systems that we actually connect into some of the bigger players, too. Right? The ADPs, the workdays, the Oracles, the SAP.
0:05:27 So we make it really easy for the HR teams to basically have this connection and offer that benefit through those relationships that we have. And we make it super easy for the employees to take advantage of it.
0:05:38 Right.
0:05:38 So there's really no change in how you do things other than how people's access to it has fundamentally changed.
0:05:45 So you mentioned the pay structure or the way companies pay employees in the past has been pretty archaic. How are you seeing organizations that are using daily pay change the way that they are supporting employees and how employees are actually using the platform?
0:06:03 Sure. I think today we often talk to our clients and we don't want to necessarily disrupt the way that they do things, and we don't. So fundamentally, by having access into their systems and their time and attendance, they don't have to fundamentally change their processes. But the access to the information then becomes an ability to kind of show that prior to their kind of processes, that kind of do process that on a two week basis.
0:06:28 So fundamentally, it allows you as an employee to get ahead of where they are in the process and get access to that money. In essence, it's allowing people and the employers themselves to do something that would be very hard if they try to do on their own. Right. And they don't want to necessarily fundamentally change things that they're comfortable doing. And that's okay. But it allows us to say in many ways, float that payday on behalf of the employer so that we can get the people the money they deserve and they've worked for.
0:07:04 And then it ends up trueing up at the end of the day. So it ends up trueing up so that when they actually get paid, it floats through and we actually take out the money that's been paid out already on the employer's behalf. So it's kind of a changing that flow of money on behalf of the employer and the systems that I talked about, the integrations enable that visibility and the data to enable that to happen.
0:07:33 I have definitely seen a rise in competitors or vendors out there who are offering services around earned wage access. What would you say is DailyPay's unique point of view in the market compared to the other options?
0:07:48 Yeah, I think some of it, what I've hit on already, which is this kind of tight integration and partnerships that we have with the leading HR vendors within the ecosystem, the ADPs, the SAPs, the Oracles, those integrations don't come along with every type of earned wage access vendor. Right. So it's really important that we bring that to the table. And then not only that, we also believe in our heart that we are an employee centric, employee first company.
0:08:18 So we're always in their corner. We're always there to help make sure that the needs of the employees are served first. And if we do that on behalf of our employers that we support, then they actually gain a benefit as well, and they're seeing those benefits, right? They're seeing people stay longer. They're seeing people more applications because they offer this really amazing benefit. They're seeing the people take on more shifts. So there's benefits on both sides of the house, but we start with thinking about the employee, and how do we help them, and how do we help understand their needs, their wants and support, their financial requirements.
0:08:54 And then as a result of that, all those ancillary benefits become really important and drivers for some of the bigger clients that we support have come out and know. I think Hilton, recently at an event, said that they've actually seen an increase in their applications two to three times since offering and promoting daily pay as part of their package. And you hear many stories of that, too. I think another stat that's really powerful of what the real benefit is, is I think when we looked at how much we surveyed about recently with employee Benefit News, 10,000 of our users and hundreds of our actual customers, and they're seeing people stay, on average, 30% longer.
0:09:41 Right.
0:09:41 People have actually been able to retain, which is a big problem, as you know, and many people on this podcast understand, is probably one of the biggest challenges and costly expenses that you can have as a company. So to get people to stay, on average 30% longer is a payoff that people are excited about and also really kind of talking about as a game changer for their company. So those are some of the employer benefits that are really tangible and meaningful.
0:10:09 What would you say? Are the employee benefits, like, what is keeping them there 30% longer?
0:10:16 Well, I think people appreciate that flexibility, control, and peace of mind that it offers. And they also have the visibility in seeing their hard work play out. Right. So when you actually work a shift and you come out of the worksplace and you're seeing that money hit your app, I think they're motivated by that. And I think the benefits are actually what I get most excited about on the employee side.
0:10:40 We just did that same study that I referenced that you can find on our website. Right. It's from employee Benefit News. Of 10,000 people we surveyed, I believe that 69% of them actually have actually reduced the amount of their late fees. Right. So that's significant. Right. We don't want to face those with late fees. They're unnecessary. 62% have actually seen A reduction in their credit card expenses and interest that they're incurring because they're able to pay it off in a more timely fashion.
0:11:11 So those two alone are big challenges that we all have had at different points in our lives. So if that just means the one little thing that we do, it's a big thing, right? And it makes a big difference, and people appreciate it and value it. And they value it that their employers brought it to the table, right? So it kind of rubs off on them in terms of their impression and their optics of not only is daily pay in my corner, my employer is in my corner, and that makes a difference in keeping people around.
0:11:40 What type of companies would you say are the perfect fit for daily pay?
0:11:44 I mean, we work with all industries, big and small, but I think some of the more obvious ones are retail, right? They have a tough time acquiring the talent, keeping the talent. Healthcare is another one. Those people have been under siege for years, right? And they're our heroes, right? But they also work very long hours. And especially during all those times that we had with COVID we saw a huge influx of people who were really interested in retaining and rewarding those people. So one of our customers in telecare, a healthcare visiting nursing organization, they actually have seen a huge amount of adoption of it. And what we've seen when we've done focus groups with that group in particular, is they've come right out and said, hey, I like and I appreciate and value the ability to go take my family out to dinner or to even pay my bills on time or do the things that I've been unable to do because I've been working so hard and I have to wait for this. Now they have that freedom and flexibility to do the things that they want to do, and they recognize that it's intellicare who's offering that change for them. So they want to stay at Intellicare and they want to actually go and work more. In many cases, which is saying a lot in healthcare, other industries are obvious.
0:13:01 Manufacturing is another one where you have a lot of these, in many cases, hourly workforce. Although what we offer is not exclusive to hourly. We offer this to the salaried workers as well. But anybody that has high turnover, anybody that has a competitive place to go higher, those are the industries that tend to do really well and really lean into this type of benefit. The targets, the McDonald's, they're all customers that are valuing this Hilton.
0:13:29 So hospitality is another. So it's across the board. But certain industries in particular have a bigger affinity for this type of benefit.
0:13:37 And I'm sure that this varies depending on the type of business in the industry. But what type of utilization rate are you typically seeing within organizations?
0:13:48 Once daily pay gets rolled, you know, without giving specific numbers. We believe we're the leading adopted EWa vendor in the market, clearly, and we've talked to analysts about that, and that's pretty clear. What's more interesting, put it in perspective. When you offer all these benefits that I talk about, the 401, health care, tuition reimbursement, earn wage access is the second highest adopted benefit, right behind your health care.
0:14:21 And that's a really staggering stat. That means that this is something right beyond your health that people value more than any other benefit, and they're all valuable. Right. So we're very proud of that, and it's significant, and it continues to see increases over time as we continue to do a better job communicating the value, how it works. But we're seeing very high adoption compared to other benefits.
0:14:46 And what do you attribute that to?
0:14:49 I think I attribute it to what people need and value in these organizations. First and foremost, they're going to choose and have options at their benefits. So some of it is just based on need and demand.
0:14:59 Right.
0:14:59 So that's certainly a big part of it. I think the other piece that I think we've been successful at, maybe other than what others are doing, is we really see it as a partnership with our clients, and we want to make sure that we work with them to communicate this, educate them, and kind of position the value of this ongoing on their behalf. So it's really a tight partnership with the clients themselves to make sure that their people know about the benefit, how it works, and then providing that support that people value.
0:15:29 Right.
0:15:30 So we're not just in their corner with the concept of this. We're in their corner. If they need us, if they need help and they have challenges, we're there and we're making sure that we deliver on our promise. So it's a combination of the demand and our ability to strong a partnership with the people we support.
0:15:48 What would you say is the biggest hesitation that your team sees with companies as they're looking at potentially implementing a solution like daily pay?
0:15:59 It's a great question. Some of the resistance and some of it is just misunderstanding. I think some of it initially was more about this is a misconception. It's a loan, it's not a loan.
0:16:13 Right.
0:16:13 It's something that is obviously fundamentally the same as what you're doing today, but just accelerating the payment cycle and getting it ahead of it. So we're not loaning money, and people also are not going to be abusive of how they use it. So some of the resistance we've heard is, well, people aren't typically used to having a daily pay cycle. And I think the reality is we know that they're not using it irresponsibly, like they're using it to buy gas to pay their bills.
0:16:44 So we understand that there's some concern that as you give people money sooner than you normally do, that there's concerns with how it's spent. The reality is it's being spent in the right ways.
0:16:56 Right.
0:16:56 So that's something we often have to talk to clients and demonstrate with data that that is not the case. It's not a loan. That's the other one. And I think generally the third one I would mention is that it's not hard to set up. This does not fundamentally change how you do things today. It's not a disruption to your current processes, which a lot of people in payroll or in the HR worry that iT's going to make a bigger strain for them to support. It doesn't. We actually do all the lift for them and make it really easy and then nothing fundamentally changes. You just need to put the systems in place to instrument it, and then everything is back to business as usual. So those are the three biggest concerns that we often talk to clients about, and most of them understand it and see that it actually is their false constraints.
0:17:43 For those listeners who aren't as familiar with earned wage access, can you explain how from a cash flow management perspective, it would work with an employer? Because I know for a lot of organizations, one of the things they look at and why they would have pay cycles on a predictable schedule is because they're managing the cash that's coming in and out of the business and making sure that they're not getting over their skis.
0:18:12 Yeah. From a cash flow. And I sort of mentioned it already, but I think what ends up happening is as that pay is earned, we actually float, that we provide the float on that cash flow until the pay cycle. And when that pay cycle does hit, and maybe somebody never took anything out, obviously that money that is ready in their normal process to flow into their payroll floats the Ross. And we'll take out any money that has already been utilized or leveraged and then pay the delta on it. So there's really no difference to their cash flows. Right. We actually cover that float. It's one of the values that we provide and we assume the risk of that too.
0:18:54 There's no penalties and other things that you often hear and people worry about. So it's really no true impact to their cash flows, because we are floating the cash flow until day of payday.
0:19:05 Right.
0:19:05 And then at that point, normal payment is made. We take out anything that's been provided in it when the person pulled it out, and the delta is then delivered. So to the employer, there's no difference.
0:19:19 What is the future vision for daily pay?
0:19:23 That's a great question as well. I think we recognize the value of this benefit and the difference we're making in people's lives, and we want to continue to expand the value that we offer. And while earned wage access was the initial foray into this, we recognize that people see us more than just access to their wages, that they see us as a financial companion. And we started to offer things like saving and auto saving and even access to free financial consulting.
0:19:52 So as we continue to evolve our relationship with these users, and we have millions of them, right. It's something that we recognize that what else can we do to make their life easier? What else can we do to help improve their life and their financial acumen or their financial standing? So we're going to continue to provide the ability to kind of go beyond just getting access to your wages, to certainly have an ability to kind of continue to improve how their work life balance and the financial needs are being met and supported. So we want to expand the value we offer to those end users. And from the employer side, we want to continue to solve hard problems for them. Right. We want to understand where they are and to address their very difficult, whether they are retention, whether they are hiring, whether they are kind of performance related.
0:20:41 Those are great, and we can affect those. But what else can we do with the data and the insights that we can actually deliver to make those HR organizations truly kind of cutting edge and to shift and move the needle to really do some different things? And there's a lot coming, right. There's a lot more opportunities to look at machine learning and AI, which I know are buzzwords and acronyms, but I think that the possibilities of what you can do with that data to understand your workforce and to understand what they need to better serve them as an employer is something that we want to continue to support them on. So both sides of the fence, the employers can do more with the data and understanding and needs and expanding our relationship and how we really serve and help be, what, I'll saY, financial companion with these millions of people who trust us and use us and love us.
0:21:34 What final thoughts do you want to leave our audience with?
0:21:36 Gino, the one thing I often talk to people about is why are you not doing this?
0:21:44 Right.
0:21:44 So I know that that's a bold statement, but there's no reason.
0:21:48 Right.
0:21:48 So what I always want to understand is there's a lot of reasons that we do things from muscle memory or experience and just comfort. But when there's opportunities like this that I truly think are win win for the employer and the employee, and we're willing to actually be that bridge to actually help bring it to life, what is stopping you? And many times when you have that conversation, the reasons that are stopping them probably need to be thought through, and you got to reimagine this and reinvent yourself as an HR team. So I just want people to take a step back sometime and say, why aren't we doing this?
0:22:23 And honestly, the one thing that I think is the most important thing is when you take a step back of, why are you not doing it? At the end of the day, Dana, this is free. There is no cost. There is no cost to the employer. And the employee has free opportunities to go out there and get access to the money with no cost. Now, there's other challenges that you may need where you have to need it instantly, and that's fine. But at the end of the day, free for the employer, free for the employee, why are we not doing this? The question of should we do this? Is over the time of why are we not doing this? Is kind of on us. So that's kind of where I would leave the audience. As you're starting to think about where you're going to go in 2024, I.
0:23:03 Think that is great food for thought. So tell us, where can our listeners go to learn more about daily pay?
0:23:09 Well, certainly go to our website, Dailypay.com. Some of the studies that I mentioned are on our press pages. So I would encourage you not just to go look at the stories of other clients and what they're doing, and there's some great stories out there. But to go look at the data and make your decisions as you start investing next year, to say, what kind of impact would that have for me as an HR organization?
0:23:30 And what can I do to actually be a driver for change in my organization and not just kind of incrementally make improvements, be a leader, right. And go to that page and look at the data and say, how do I bring this to bear for my company? So that's what I would encourage people to do.
0:23:47 Excellent.
0:23:47 Thank you, Gino, for being a guest.
0:23:49 On the HR Tech spotlight. For those listening, be sure to check out daily pay to learn more.
0:24:01 Thanks for listening to this episode of the HR Tech Spotlight Podcast, where we showcase some of the best up and coming HR technology options in the market. If you are an HR tech company leader who would like to be considered for a guest spot on this program, please contact me via Growthmodemarketing.com or reach out to me Deanna Shimota on LinkedIn and if you found this show informative, subscribe, connect with us on social media and leave a review.
0:24:31 This is Deanna with GrowthMode Marketing signing off. Thanks for listening. We hope you'll tune in next time. Our.