Pay them biweekly.
Yes, there are many things you could do, but one item that has a quick turnaround on happiness is just this. If you would like to change pay frequencies, simply reach out to Journey, and ask us how we can help your situation! Before you officially decide a change is best, please read on!
Is it really that simple?
First, let’s take a step back and look at different pay frequencies and how they impact both your business and your employees. The four most commonly used payroll schedules are weekly, biweekly (which means every two weeks), semi-monthly (which means twice a month), and monthly. Keep in mind that most states have set payday frequency requirements. You can always choose to pay more frequently, but not less. In Colorado and Delaware, for instance, employers can opt for any one of the four schedules, but at a minimum, must pay their employees on a monthly basis. In Arizona, employers cannot pay their employees monthly and must stick with semi-monthly, bi-weekly, or weekly. Compare that to Connecticut, where employees must be paid weekly.
A weekly payroll is a popular option for trade industries like construction, manufacturing, and plumbing. There is a certain amount of security for the employer when projects can be held up by weather, permitting issues, and client funding. Employees prefer the regular cashflow, which allows them to better manage their personal finances, and the ability to easily track overtime hours.
Weekly payroll can be cost prohibitive, which is why other industries shy away. Journey payroll services, like other payroll companies, charge per payroll run. Even though the cost per payroll is less, you have double the payrolls to run versus a bi-weekly payroll and therefore your annual costs will increase. Does that matter if your employees love you for paying them weekly? That’s up to each employer individually as they weight the cost vs rewards.
Biweekly vs. Semi-Monthly
Biweekly (every two weeks) and semi-weekly (twice a month) are the most common payroll frequencies. While the differences seem minor, choosing one way or the other can make a big difference for your company.
Tom Campbell, a partner and the CFO of Toolbox Creative in Fort Collins, pays his staff on a semi-monthly basis. From his perspective, it makes managing expenses and cash flow less of a headache.
“We budget our expenses monthly and salary is always our biggest expense. Semi-monthly creates 24 clean, predictable payments. Bi-weekly creates 26 payments, so we’d have two months that have three pay periods.”
As a Journey Employer Solutions client, Tom looks to us for advice and recommendations. “We know we can trust Journey to make sure we’re doing everything right and getting the most out of a payroll service,” he says.
Bi-Weekly payroll frequency has other benefits as Sue Shirley, Executive V.P. of Journey Employer Solution points out. “Most employers lean slightly towards bi-weekly payroll schedule. First, from an overtime standpoint, you have two 40-hour weeks which makes your overtime calculations much more straightforward. Second, employees don’t need to wonder what day of the week they’ll be paid on and therefore employees could prefer this method. At the end of the day, each business has their own culture and there’s no wrong frequency to choose, as long as it’s within the state guidelines.”