Why On-Demand Pay is a gamechanger for the last-mile industry

Why On-Demand Pay is a gamechanger for the last-mile industry

Why On-Demand Pay is a gamechanger for the last-mile industry

Mar 20, 2024

Mar 20, 2024

Products

Products

In KornFerry’s insight survey of the last-mile industry, they reported there is a ‘staggering-shortage-of-last-mile-workers’. These ‘frontline workers’ - who can flex to the needs of a business on any given day - are essential for keeping businesses running and delivery costs competitive.

But as vital as frontline workers are, attracting and retaining them can be a challenge. Businesses face many hurdles in keeping workers engaged and loyal to their platform. They are in constant need of differentiating their offering to stand out, and On-demand Pay is becoming the answer for many. 

Lack of loyalty in the last-mile industry

One of the biggest issues in the last-mile industry is worker churn. Because frontline delivery workers are effectively self-employed and not bound by employment contracts, they do not have the same level of loyalty as employees. They may jump from one last-mile business to another - wherever they can get the best offer - and this can result in a rotating workforce.

This lack of commitment means last-mile businesses must devote a lot of time (and resources) to recruitment. Even if they are successful in continually attracting talent it can still be detrimental to service levels. That’s because new recruits lack the valuable brand knowledge and experience possessed by those who have left the business.

Demotivated workers in the last-mile industry 

Another issue that affects the last-mile industry is a lack of motivation among workers. Last-mile businesses frequently fail to incentivise workers to pick up shifts. This means businesses can struggle to allocate unpopular jobs. Demotivated workers will simply cherrypick those most convenient. 

In some cases, frontline workers might belong to more than one gig work platform and have numerous options for work available to them. That’s why last-mile businesses need to recognise they are in competition with each other and make their shifts more attractive to workers. 

How On-Demand Pay can incentivise workers and reduce churn

On-Demand Pay gives workers advanced access to their wages. Last-mile businesses can choose to give workers access after every shift they complete, or at specified intervals (at the end of each day or week, for example). Being able to get cash in their hands so quickly is a major motivator for last-mile workers - it means they can immediately boost their coffers by accepting shifts.

Providing both On-demand Pay and Instant Payments creates an element of gamification. When workers have to wait until the end of the month to get paid, it’s a form of delayed gratification, but these benefits offer instant gratification. Workers carry out an action and can receive an instant reward, and this incentivises them to do it repeatedly. Businesses can go one step further and tier the benefits, giving even better rewards as the workers move up the tiers.

The knock-on effect is that workers are more engaged, become more committed to the business, and are less likely to go elsewhere. Sentiment towards the business will be more positive, which trickles down into workers taking increased pride in their work, and, ultimately, providing better customer service. It really is a virtuous circle! 

On-Demand Pay also helps to promote financial wellbeing among your workforce. Last-mile workers who enjoy a steady flow of earnings instead of sporadic lump sums are better equipped to manage their day-to-day finances. And, of course, they are empowered to take on more work should an unexpected expense occur. 

How Onsi helps last-mile businesses switch to On-Demand Pay

Some of the biggest names in the last-mile industry use Onsi to provide On-Demand Pay to their workers. It’s easy to make the switch as there is little interference with your existing payroll process and cashflow.

What’s more, you don’t have to invest lots of resources into getting set up - you just upload your member data and hit the ground running. Onsi will automatically and accurately pay workers after every shift. Our clients love that there is so little admin with Onsi. With no significant changes to existing payroll, and no burden on internal management, freeing up time to focus on more important things, like driving business results.

Conclusion

The last-mile delivery industry faces challenges in retaining workers, putting pressure on people and operations teams, and negatively impacting service levels. 

But by simply taking the step of giving workers early access to their wages, last-mile businesses can significantly improve loyalty and motivation, and reduce churn. Speak to one of our team today to learn more about how we work with last-mile businesses like yours.  

See it in action

Onsi is a UK and EU insurance intermediary. Onsi is a trading name of Collective Society Ltd, Collective Denmark ApS (Onsi Denmark ApS) and Collective Netherlands B.V., who are authorised and regulated by the UK Financial Conduct Authority (No. 923788), the Danish Financial Services Authority (No. 42352985), and the Netherlands Authority for Financial Markets (No. 12049041), respectively. You can check this by visiting the UK Financial Services Register, the Danish Financial Services Register, and the Netherlands Financial Services Register.

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