From fortnightly to flexible: Employees want faster pay cycles

How can employers address changing expectations?

From fortnightly to flexible: Employees want faster pay cycles

Employers have been warned they risk being left behind if they fail to adapt to employees' evolving attitudes towards pay.

A recent YouGov survey commissioned by Deel, a payroll compliance platform, shows employees want greater customisation and flexibility in how they are paid.

"They want flexibility, immediate access to their money, financial transparency, and the ability to customise their compensation to suit their lifestyle," Shannon Karaka, Deel ANZ country lead, told HRD in a statement.

"The days of fortnightly and monthly payroll runs are coming to an end."

In Australia, when employees are paid is a complex issue and rules vary between sectors. The Fair Work Ombudsman advises that most awards or agreements set out requirements for when employees must be paid - either weekly, fortnightly or monthly. If it doesn't specify a time, employees must be paid at least monthly.

According to Deel's findings, 40% of employees want to be paid sooner than their fortnightly or monthly cycles, with Gen Z and Millennials expecting employers to provide immediate access to their earned wages.

"In simple terms, that means 'pay me now, for work I've done, rather than waiting for the next payday,'" Karaka said.

Another report on the issue by Dayforce based on US workers found few employees wanted to be paid monthly and more than half felt reducing waiting periods between pay cycles would be very or extremely helpful to their mental and financial health.

Karaka warned that if the gap between what employees expect and what businesses deliver continues to widen, there will be consequences in Australian workplaces.

"Retention will drop, engagement will suffer, and top talent – especially among younger generations – will walk away in favour of more progressive, flexible employers."

Addressing evolving pay demands

The changing attitudes towards pay also pose a threat to employee value propositions, with frustration over payroll errors and lack of transparency.

A third of employees (34%) have experienced pay issues in the past two years, while another 50% feel their salaries are not transparently determined.

"The best thing employers can do right now is listen, and then act. The data is clear: Australians want more flexibility, transparency, and control over how and when they're paid," Karaka said.

Employers should also rebuild trust by ensuring there's always a human available to resolve pay issues and by being transparent about how salaries and bonuses are calculated, Karaka told HRD.

"By ensuring there's always a human available to resolve issues and by being transparent about how salaries and bonuses are calculated," he added.

"This is about meeting employees where they are. Gen Z and Millennials, in particular, expect their workplace experience to match the speed and personalisation of the apps they use every day. Employers who embrace this shift won't just keep up, they'll lead."