Faster Payments

Westgate On How Flexible Worker Payments Are Helping Reopen Resorts

Hotels and resorts need their workers more than ever to safely reopen, but these workers must also meet their own needs – and early access to pay can play a vital role in helping them do so. In the inaugural edition of the Next-Gen Payroll Tracker, Karen Sims, senior director of financial services for Westgate Resorts, discusses how offering flexible payments has been key to reopening the firm’s 27 properties.

Few sectors of the economy have been harder hit during the pandemic than the hospitality industry.

Consumers have been sheltering in place, and resorts and hotels have been subject to closure orders.

Things are steadily changing, however. The volume of passengers going through U.S. airports increased fourfold in early June compared to mid-April, and hotels and resorts are reporting an uptick in summer bookings. It is possible that consumers are ready for a collective vacation after the strain of the past few months.

Karen Sims has a firsthand perspective on these improving fortunes as the senior director of financial services for U.S.-based Westgate Resorts, which operates 27 timeshare resorts across the country. Most of the company’s facilities have reopened, which is good news for property owners and the thousands of Westgate workers who were furloughed during the shutdown.

The current circumstances are also dramatically demonstrating the value of offering workers flexible and digital payment options — something Westgate embraced a few years ago. The company has made it possible for workers to receive earned wages the same day they request them. The service has proven popular with Westgate’s workforce, which includes housekeepers, maintenance workers and food servers.

“[The] daily pay [option] has been a huge hit,” Sims said. “We’ve had over 45 percent of our eligible population use the service.”

Several key factors drive employee interest in faster payment options.

The Challenges of Making Ends Meet

According to PYMNTS research, 59.2 percent of U.S. consumers live paycheck to paycheck, lacking any financial cushion in case of emergencies or other unanticipated expenses.

These realities help explain why the conventional paycheck cycle does not accommodate many workers. Sims explained that Westgate managers became aware of their workers’ sometimes-high level of strain.

“We knew we had a lot of team members that were struggling to pay their bills,” Sims said. “We would occasionally hear these stories about people who couldn’t afford to put gas in their car to drive to work or to buy their next meal. We did not want to see our team members wasting money on expensive payday loans or credit card debt. So, allowing them to have this access to their earned pay before their payday, for just a very low transfer fee, seemed like a great way to help them.”

There are several early payment services available on the market today, and some do not charge fees for the service. These options may be especially helpful for new hires who may have been searching for work for extended periods of time, and flexible payment options’ benefits go both ways. Employers appreciate that staff members may be less stressed and more reliable and motivated.

“It gives [workers] the motivation to even increase their hours worked because they can see the benefit immediately after they end their shift,” Sims said. “Having the option helps us, too, to bring in people and get them to sign up for shifts and be more available because [employees] get that instant gratification of having the money there for whatever their personal need or desire is.”

Such incentives may also help in getting new employees in the door — ADP’s Evolution of Pay study found that 29 percent of prospective employees would consider whether they would have early access to earned pay in deciding whether to accept job offers.

Going Digital With Pay Cards

Allowing employees to control when they are paid is just one innovation transforming longstanding payroll processes. Another is the use of prepaid debit cards to disburse wages instead of paper or direct deposit checks. The solution, pay cards, may also offer cardholders the abilities to set up automatic bill payment, transfer funds and set aside money for special purposes. In this sense, the method may function like a bank account for employees who lack them — a situation that may apply to 6 percent of U.S. consumers.

Westgate has offered pay cards for several years now, and Sims said they can help workers keep a handle on their finances for not only themselves but their entire households.

“In a number of cases, workers will use [the method] to give their kids a card, and then put money on the card to give their kids the responsibility of managing money,” Sims said. “We see some using it as a special savings-type account, [so they can put] money aside for a vacation or … make sure they have gas to get to work.”

Pay cards confer benefits to employers, as well. Distributing paper checks is time consuming, costly and prone to human error. A firm with 100 employees could save nearly $30,000 per year by employing pay cards in place of paper checks, according to an online calculator offered by ADP’s payments suite, Wisely by ADP. Pay cards can also ease some of the frictions associated with employee onboarding.

“If they are not entering all that [information] and we do not know how to pay them, [we used to] just issue a check,” Sims said. “And that check then has to be picked up, it has to be cashed. Sometimes [workers] do not cash them, and then we’re chasing them down. So, it is a much more convenient process if they have a card issued to them right when they start.”

Reopening to a New Reality

Most businesses are aware that reopening over the coming weeks and months means they will not be returning to business as usual. A host of new rules and regulations will govern everything from occupancy limits to sanitation — and conscientious companies will go beyond government mandates. These considerations are especially important in the leisure and hospitality industry, which must ensure that patrons feel safe and at ease if they expect them to stay or return.

Westgate has established strict reopening protocols for its resorts and has made them public to offer guidance to the wider industry. These steps include increasing the cleaning and sanitizing frequency of all public spaces, emphasizing frequent-contact surfaces, and updating procedures for interactions between guests and host staff. Guests will also be greeted with drive-thru check-in at all locations where possible, and ultra-low violet disinfectant fogging will be used in common areas. Staff will be required to wear masks, and they will use gloves when transferring items to and receiving items from guests.

All of this means that essential workers at hotels and resorts will be more important than ever. Offering fast and flexible payment options may ensure that they are better able to meet their own essential needs.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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