Imagine you’re dropped into a hostile wilderness with nothing. You have no phone, no maps, no supplies, no companions, and no help. What are the first things you need?
 
You need to set up shelter, get food and water, and try to stay warm. All other needs in life are meaningless unless these basic physiological needs are satisfied and one’s body is actually functioning.
 
What do you need next? Security. Security means not losing what you’ve scavenged and protecting yourself against threats.

Now imagine your everyday life. How is that any different from being in the wilderness in terms of the first two things you need each and every day? The answer: it isn’t.

Welcome to the real-life game of television’s “Survivor.”

Security is so fundamental to human existence that it’s a cornerstone of Payactiv’s mission statement: “Security, Dignity, and Savings for All.”

Understanding Foundational Security

We know that security is necessary for survival, but like basic physiological needs, it’s also foundational. All human beings have what psychologist Abraham Maslow called a “hierarchy of needs,” which he illustrated as a pyramid showing what motivates all humans.

A person cannot grow into the best version of oneself unless one has the foundation to build from.

How Finances Impact the Security Equation

Because security is so fundamental, it’s regrettably taken for granted. We tend to believe most people are secure, and those who aren’t only include the indigent or mentally ill.

However, in modern society, “security” is largely tied to money. Without income, usually obtained through a job, people don’t have security. Even with a job and the associated income, many workers’ security hangs by a thread. If they lose that job or get laid off, their security evaporates.

When an unfortunate incident occurs, such as an unexpected medical procedure or a car breakdown, that expense must be covered. The traditional route is to borrow funds to pay the expense and maintain security. Unfortunately, most forms of short-term small-dollar debt are expensive, which results in kicking the can down the road. It may temporarily provide security, but in reality, it’s akin to handing an anchor to a drowning person.

The Significance of Financial Insecurity on Employee Well-being

According to a 2018 financial capability report, 53% of Americans said that thinking about their finances made them anxious. However, given the lingering economic effects of the pandemic, including supply chain issues and rising inflation, the number is likely even higher today.

Financial insecurity is prevalent among people from all walks of life:

• More than eighty million hourly workers lack any real security.
• More than a third of high-earning American workers feel strapped for cash – a figure that’s risen dramatically in recent years.
• Food prices are up 10.8% year-over-year, representing the largest 12-month increase since 1980.

Financial stress is impacting Americans both at home and in the workplace. Money worries are linked to significant health conditions, including heart disease, diabetes, sleep problems, and depression. Treating these often-life-threatening conditions can lead to expensive medical treatments, which only creates more financial stress.

Financial difficulties are now the second leading cause of divorce, and 97% of employees say they spend time working on or worrying about finances during the workday. Stress-related illnesses cost employers nearly $300 billion annually in lost productivity.

Compounding the problem is a lack of financial literacy among the American public, something that ultimately puts the American Dream at risk for millions:

• Today, only about one-third of Americans have a working understanding of interest rates, mortgage rates, and financial risk. This measure of financial literacy has fallen 19% over the past decade.
• This gap was estimated to have cost Americans more than $415 billion just in 2020 alone.

Employers’ Role in Building this Foundation

Financial security doesn’t simply appear – it’s built block-by-block. Employers have an opportunity and a responsibility to help address this financial insecurity crisis by providing employees with increased access to financial education.

If you don’t already offer employees access to financial education, budgeting, and savings tools, there’s no better time to start. Build out a balanced approach that includes a suite of complementary tools that are easy for people to access, understand, and use.

Offering payment flexibility is a related initiative that’s growing in popularity among employers and employees alike. EWA allows employees to access pay they’ve accrued but not yet received.

EWA services can help alleviate sudden, unplanned demands for cash. Employees value the financial well-being these flexible pay models provide, as they offer a means to avoid unnecessary debt.

In Closing

A business and its employees exist in a symbiotic relationship. While employers and employees are individuals, together, they create a new organism that relies on each other and, in turn, produces something that others need to fulfill their own lives.

Employers who value their employees’ financial security not only ensure their own success but create a virtuous cycle by improving the lives of their employees. In turn, retention, engagement, productivity, and loyalty improve. Job hunters will hear that the business is a good place to work, which enhances recruitment efforts.

Payactiv strives to provide employers with a means to help their people work towards long-term financial stability and security. As a Certified B-Corporation and Public Benefit Corporation, we aim to make the world a better place and help individuals and society become the best that they can be.

As a leading EWA provider, Payactiv does more than just allow you to give employees access to pay they’ve already earned immediately; our service is low-cost to employees and zero-cost to employers. Our unique operating model means that our service doesn’t involve lending money to employees – we simply provide them with access to the cash they’ve already earned. There are no credit checks and no adverse impact on credit histories.

In addition to EWA, Payactiv provides companies with a means to put their employees on a path to financial stability and, ultimately, security. With our budgeting, savings, and debt support tools – all in the Payactiv app – your people are empowered to control their financial futures.

Sustainable financial security for all is Payactiv’s mission, and by working with us, it becomes your mission as well.

Learn more about Payactiv’s Service, or book your demo now.