New data from Rain shows that 92.2% of employers agree faster pay cycles improve employee engagement, yet only half of those surveyed plan to modernize their payroll systems in 2026. At the same time, more than half of employees say they would stay with an employer longer if they had faster access to earned pay, while 71.6% of employers say flexible pay could reduce turnover, underscoring a growing gap between employee demand and employer action.
The survey of 1,000 U.S.-based hourly workers and 1,000 employed leaders in human resources, payroll, and finance reveals that while employers conceptually agree that pay timing affects engagement, productivity, and retention, many organizations have yet to operationalize that belief. The survey confirms that just over half (56.4%) of employers say leadership views pay flexibility as a strategic priority, suggesting that hesitation at the executive and systems level is slowing progress.
“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.”
Employees are already adapting to rigid pay cycles in tangible ways. Nearly half of employees (49.6%) say waiting for pay negatively impacts their focus and attendance, and 39.2% report they’ve paid overdraft, payday, or late fees in recent months. More than one in three employees (37.3%) say they have taken a second job simply to access pay faster, highlighting how outdated payroll systems shift the financial and cognitive burdens onto workers.
Despite these gaps, the data shows alignment on how and when employees expect to be paid. More than half of employees (51.6%) say on-demand pay will be an expected part of work in 2026, closely mirroring the 52.8% of employers who believe it will become standard. Employees have already changed their behavior because pay flexibility matters, while many employers are still deciding how and when to act.
The findings also point to a broader shift in how payroll is perceived inside organizations, with 83% of employers saying faster pay demonstrates trust, 82.4% say modern payroll systems signal innovation and employee well-being, and 77.9% say flexible pay strengthens employer brand. Once viewed as a back-office function, payroll has become a visible workforce infrastructure, signaling how companies design work, value employees, and modernize operations.
“Payroll is a key component of the future of work,” Bradford said. “The organizations that modernize pay timing and give employees real-time access to their earned wages will be the ones employees choose to stay with instead of moving to a company with these benefits.”
For more information about the survey and Rain, visit the Payroll Gap e-book.
