A new study from Rain shows a growing gap between what employers feel and what they do about payroll modernization. While 92.2% of employers agree that faster pay cycles boost employee engagement, only 53% plan to upgrade their payroll systems in 2026.
The survey included 1,000 U.S. hourly workers and 1,000 HR, payroll, and finance leaders. It reveals that employees want more pay flexibility. Over half of the workers say they would stay longer if they had quicker access to earned wages. At the same time, 71.6% of employers believe flexible pay options could reduce turnover. However, only 56.4% of organizations view pay flexibility as a top priority. This shows that internal inertia is slowing progress.
Employees are already experiencing the pressure of tight pay cycles. Almost half (49.6%) of employees claim that delayed pay impacts their concentration and presence at work, while 39.2% admit to incurring overdraft or late fees in the past six months. What is more alarming is that 37.3% of employees resort to second jobs to get quicker access to funds, which shows that the current pay cycles are no longer working.
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“Pay timing is no longer a benefits discussion; it’s a workforce infrastructure issue,” said Alex Bradford, co-founder and CEO of Rain. “When employees take second jobs or miss shifts just to manage cash flow, that’s not a personal finance problem. It’s a systems problem. The companies that make improvements to their pay processes now won’t just offer faster access to pay, they’ll close the gap between what leaders believe and what their payroll systems can actually deliver.”
The data also points to a cultural shift in how payroll is perceived. More than 80% of employers believe faster pay signals trust and innovation, while 77.9% say it strengthens employer brand. As on-demand pay edges closer to becoming an industry standard, payroll is evolving from a back-office function into a defining element of workforce strategy.
