- Sbarro has Partnership with DailyPay give its employees access to wages on demand.
- The Company, citing my own commissioned research, more than 90% of users claim that DailyPay helps them pay their bills. Four out of five users no longer have to take out payday loans or pay overdraft fees with On-Demand Payment, according to DailyPay.
- According to the press release, Sbarro hopes DailyPay will step up its recruitment and retention efforts. The restaurant industry has been under significant work pressure since the pandemic began. Last year about 40% of restaurants reported being understaffed Cancellation rate in gastronomy about twice as high as the economy as a whole.
On-demand payment is nothing new in the restaurant industry. Several companies, including Checkers, Bloomin’ Brands, Church’s Chicken and Pizza Hut, began exploring the option to retain employees as an incentive in 2019, as turnover rates were costly for operators even when the job market was relatively stable Center for Hospitality Research at Cornell University.
As the pandemic has pushed hospitality layoffs to all-time highs, some Wendy’s have done so started offering same-day paymentwhile Jimmy John’s, Torchy’s Tacos, Manna Inc. and Piada Italian Street Food also recently added DailyPay.
DailyPay is not the only company offering this service to brands. Some branches of Taco Bell, McDonald’s and Applebee’s adopted branch, while others have added Instant Financial. Toast added a new product, PayOut, to give restaurant workers instant access to a portion of their earnings after each shift.
A recent study by Ceridian The survey, conducted by The Harris Poll, found that 80% of workers would prefer their wages to be automatically deposited into their bank account as soon as they earn them, while 78% said free access to on-demand wages demonstrates their loyalty to an employer would increase.
Free access is a key factor in this benefit and relieves employees of the need to turn to costly payday loan companies to cover their bills. In Texas, for example, the typical APR for a payday loan is over 600%. according to CNBC. Also, the average overdraft fee is now over $33.50 – a record high.
In a statement, Rohan Shearer, Sbarro’s chief administrative officer, said the partnership “supports the financial health of our teams by rewarding them with earlier access to their earned on-demand wages.”
Operators have presented anecdotal evidence that same-day payment improves customer retention. A McDonald’s franchisee in Florida found out Turnover rate down by almost 10% Year after year after the launch of Instant Financial, for example.
Pay-on-demand is just one of several benefits operators offer to navigate the job market. Chains have raised wages, offered bonuses, added childcare allowances, given away iPhones and granted training and holiday allowances, among other benefits.