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5 Ways to Reduce Employee Financial Stress

By Insights Team on August 23, 2019

When your employees clock in to work, you want them focused on their job so they can put forth the best possible results. But if someone is stressed or struggling financially, they may be distracted by personal and family problems every shift. As a manager, you’re in the best position to help your team thrive, including with their money. Here are five great low-cost or no-cost methods to reduce employee financial stress.

Quick, low-cost access to earned wages

When it’s time to pay the rent or buy groceries, there is nothing more stressful than coming up short. When hourly employees need quick cash, they often turn to expensive, predatory payday lenders that charge hundreds of percentage points in APR for a short-term loan.

PayActiv offers a much more affordable alternative. With access to earned, unpaid wages for just $5 per month used, PayActiv can put money in the bank before payday, simply reducing their next paycheck by the amount they draw early. This service is available at no cost to employers.

Direct deposit to employee bank accounts

While many workers consider direct deposit a given at their job, it isn’t an option for everyone. But when more than four in five workers are paid by direct deposit nationwide, it’s important to bring direct deposit to the last 18% of workers living outside of electronic paycheck delivery.

Most payroll providers include direct deposit at no extra charge to employers. If you don’t offer it already, online, local, and national payroll companies are ready to help. PayActiv integrates with a large number of payroll providers for a seamless experience for both employees and employers.

Automated savings to escape the paycheck-to-paycheck cycle

A Federal Reserve report (PDF) released in May 2019 upheld a longtime, problematic statistic. About 40% of US households could not afford a $400 emergency from savings. Broken down cars, family illnesses and injuries, and emergency home repairs regularly exceed the $400 mark, so it’s imperative that individuals and families maintain an adequate emergency fund.

There are many ways for employees to automate savings. It could be through a split direct deposit from your payroll provider. They could turn on a recurring transfer from checking to savings on payday at their bank. If you offer PayActiv as a benefit, the app includes tools to help boost savings rates as well.

Employee coaching to pay off debt

Most public schools don’t teach anything about personal finance, and many families treat money as a taboo topic that is never discussed. Unless they were lucky enough to learn good money lessons from their parents or friends, most people don’t know a whole lot about how to handle things like debt, credit cards, and bank accounts.

Financial classes, coaching, and assistance programs go a long way to help employees overcome financial strains on their own. The PayActiv platform takes a holistic approach to personal finance including financial literacy resources and coaching programs.

Let employees choose their own payday

Most companies stick to a common payday schedule like the 15th and last day of the month, every other Friday, or sometimes weekly schedules. When you offer early access to earned wages with PayActiv, employees can effectively choose their own payday.

If they’ve earned the money, it’s only a matter of time before they get paid. For a very low cost, they can shift around their pay schedule to better align with bills and financial needs.

Empower employees to master their money

About 10% of people who earn six-figures live paycheck to paycheck, and that jumps to 78% when you look at all American households. With statistics like this, it’s no surprise to hear that some hourly workers face a serious cash crunch.

When you educate your employees, offer them the best tools and benefits, and treat them as partners for long-term success, you are setting yourselves up for a major win-win. At PayActiv, we are here to help you and your employees

Holistic Financial Wellness

Learn how PayActiv measurably reduces employee financial stress and employee turnover.

It's more than a paycheck.
It's peace of mind.

It's more than a paycheck. It's peace of mind.

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