Let’s be honest—pay cuts stink. They may be necessary, but there’s no way to sugarcoat it: losing income is a hardship for most employees, especially hourly workers.
What makes a pay cut so brutal is not merely reduced income but the fact that workers have no choice, no autonomy, and no control over the process. Either they accept the pay cut, or they lose the job. That’s not a real choice for the majority of hourly workers because their livelihood—paying their bills on time, buying groceries, supporting their families—depends on it.
However, there are times when you have to make pay cuts, though you know they’ll be painful. Maybe there is no way to truly “ease the blow” for an employee’s pay cut, much less three ways to do it, but there are ways to help. What you can do is provide employees with benefits that give them choices that are inclusive to the workers’ wants and needs, and the freedom to be in control of their financial wellness, even in tough times.
If an hourly worker could have more flexible hours or work from home, that might be one solution.
Employers can also offer financial wellness tools that provide their hourly workers with the choice and freedom to access their pay as needed, which restores some financial autonomy. That autonomy is key to maintaining a sense of control, security, and, ultimately, success. It’s not everything, but it is something.
Here’s where PayActiv comes in.
As the leading provider in Earned Wage Access (EWA), PayActiv partners with employers across the nation to provide over one million workers with instant access to their wages. Through the PayActiv platform, workers are able to track their wages day by day and access a portion of their paycheck as needed from wages they’ve already earned, before payday finally rolls around.
As an award-winning holistic benefits platform, PayActiv does more than provide EWA. They provide a full range of financial wellness benefits that promote stability and resilience for hourly workers. These benefits include budgeting and savings tools, access to Uber and Amazon shopping, prescription discounts, and access to financial planning and counseling services. Plus, workers have an option to pick up their wages in cash at participating Walmart locations.
Employers and employees alike have seen how powerful this kind of financial autonomy can be. With access to their wages through PayActiv, users have saved over $240 million in fees and interest from banking overdrafts and payday loans. Employers who partner with PayActiv have experienced over 30 percent reduced turnover and a 100 percent increase in employee engagement, motivation, and productivity at work.
Let’s be clear: partnering with PayActiv won’t heal the employee’s wounds over a pay cut. Like we’ve said before, pay cuts stink.
However, when employers provide additional benefits that give employees choices for navigating the resulting financial stress a little bit better, they also restore a sense of flexibility, control, and security, which bring a renewed sense of hope that things will get better.
And, with PayActiv, they just might.
When you own or manage a business, your financial focus is likely on the bottom...