Most employers agree on one thing: getting paid faster makes employees more engaged.So why, as we begin 2026, are only about half of them actually doing anything about it?

That disconnect is one of the clearest takeaways from a new Rain survey of U.S. employers and hourly workers, and it highlights a growing gap between what leaders believe about pay timing and what their payroll systems can actually deliver.

What we studied

To better understand how pay timing affects today’s workforce, Rain surveyed:

• 1,000 U.S.-based hourly workers
• 1,000 employed leaders across HR, payroll and finance functions
  

The survey explored attitudes toward pay timing, employee engagement, retention, payroll modernization and the real-world behaviors people adopt when pay cycles don’t align with their everyday financial needs.

The result? Strong philosophical alignment, paired with hesitation to actually do anything.

Everyone agrees faster pay works

Let’s start with the good news.

An overwhelming 92.2% of employers surveyed say faster pay cycles improve employee engagement. Nearly 72% believe flexible pay could reduce turnover, and more than half of employees say they’d stay longer with an employer that offered quicker access to earned wages.

In other words, pay timing isn’t controversial anymore. Organization leaders understand it affects focus, productivity and retention.

But belief doesn’t necessarily translate into action.

Only half of employers plan to modernize payroll in 2026

Despite near-universal agreement that faster pay is beneficial, just 53% of employers say they plan to modernize payroll systems in 2026.

Why the hesitancy to take action?

The survey points to a familiar bottleneck — leadership and systems readiness.

Only 56.4% of employers say their leadership team views pay flexibility as a strategic priority. That means nearly half of organizations still see payroll primarily as a back-office function, not as workforce infrastructure that shapes day-to-day employee experience.

Employees already feel the cost of rigid pay cycles

While many organizations are still “evaluating,” employees are already adapting, often in costly ways.

According to the survey:

• 49.6% of employees say having to wait for pay negatively impacts their focus or attendance
• 39.2% report paying overdraft, payday or late fees in recent months
• 37.3% say they’ve taken a second job, like Uber driving, simply to access pay faster
  

That last stat is especially telling. This isn’t about luxury spending or poor budgeting — it’s about cash flow timing. When payroll systems lag behind real-life expenses, employees bear the financial and mental burden.

On-demand pay is becoming the expectation, not the exception

Both sides of the workforce are arriving at the same conclusion:

• 51.6% of employees say on-demand pay will be an expected part of work in 2026
• 52.8% of employers agree it will become standard
  

The difference?

Employees have already begun to change their behavior to get the money they need through gig work, often at the expense of showing up for their employer. But many employers are still deciding when, or even if, to act.

Payroll has become a signal, not just a system

One of the most interesting shifts revealed by the survey is how employers now view payroll itself.

Among employer respondents:

• 83% say faster pay demonstrates trust
• 82.4% say modern payroll signals innovation and employee well-being
• 77.9% say flexible pay strengthens the employer brand
  

Payroll is no longer invisible. It sends a message about how a company designs work, supports employees and invests in modern operations.

Closing the gap between belief and action

The takeaway from the data is clear. The conversation has moved on. Employees expect flexibility. Employers understand the value. What’s missing is execution.

Companies that modernize payroll in 2026 won’t just be adding a feature, they’ll be aligning their systems with the realities of today’s workforce. And in a tight labor market, that alignment can mean the difference between retention and churn.

Rain co-founder and CEO Alex Bradford sums up the value of flexible pay

“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.”

To view additional insights from this survey, download the e-Book, Closing the Pay Timing Gap — How Employees and Employers View Earned Wage Access — and Why Payroll Modernization Can’t Wait