How to Improve Employee Financial Wellness with EWA

According to a Federal Reserve report, the majority of workers without savings lack access to basic financial products and services. This can lead to costly, challenging situations where employees are forced to use expensive payday loans and check cashing services rather than free or much less expensive alternatives.

The flagship feature of PayActiv is early access to earned wages. Employees struggling to pay the bills can pay just $5 per 2-week pay period they take advantage of this benefit, which comes at no cost to employers. But getting employees away from predatory loans is just one step on a path to financial security. PayActiv includes a wide range of additional benefits providing access to financial planning, saving, transportation and goods and services.

Earned wage access helps avoid immediate financial strain

When the rent or mortgage is due, what can you do if your bank account balance falls short? Aside from risking eviction or foreclosure, options are limited. That’s why many people with bad credit or no credit turn to expensive, predatory payday lenders that charge an arm and a leg for a short-term loan.to

PayActiv gives employees access to earned wages before payday at a very low cost. A few taps on a smartphone screen will whisk income, even from hours worked today, to a linked bank account or payment card.

Call center, retail, manufacturing, hospital, aging care, and even non-profit companies offer PayActiv through an integration with their existing payroll provider. It doesn’t cost employers a thing. In fact, the average employer saves $50,000 per 100 enrolled employees when offering PayActiv.

Education and financial tools are key for long-term money success

Employers have a unique opportunity when it comes to improving their worker’s lives. The paycheck is certainly a big part of why people go to work, but other benefits add up to a major portion of the total compensation package. Those benefits can range from common insurance coverage to creative financial assistance programs. If you can do both, you’re doing great things for your valuable team.

When an employee downloads PayActiv on their iPhone or Android device, they get access to a suite of tools for managing bills, adding to savings, and tracking their money and income. If you are able to engage employees in financial training sessions and classes during their workdays, you could help them learn, develop, and solidify positive habits that will last a lifetime.

For example, you could host a quarterly speaker series with representatives from local banks, credit unions, nonprofits, and investment companies for employees to learn key banking, budgeting, and money management skills.

PayActiv includes access to credit counseling, though you could bring in local financial advisors or credit counselors to work with employees one-on-one on a budget and financial plan.

With the PayActiv app, workers have access to a wide range of free resources. When you are a true financial partner for your employees, and not just a job, your business can increase employee engagement, loyalty, and find mutual success across the board.

Core financial management skills everyone should understand

Most people don’t learn much about personal finance from their parents or in school. Learning as you go can be an expensive and precarious pursuit. Through the PayActiv app and resources at the workplace, consider offering lessons on these topics to employees:

• Budgeting – This basic financial skill doesn’t come naturally. Everyone should know how to plan for their monthly expenses.
• Debt management – Credit cards, student loans, and auto loans are common in households across the country. Learning how those loans work, how interest is charged, and how to pay them off is vital for financial wellbeing.
• Credit and credit scores – Bad credit or no credit could keep you outside of the financial system. A lesson on how it works could teach workers how to build an excellent credit score.
• Saving for emergencies – About 40% of households could not afford a $400 emergency from savings, yet $400 emergencies are common. Every household should have enough savings to handle a medical emergency, vehicle repair, or home repair.
• Avoiding predatory financial services – Payday lenders, check cashers, prepaid cards, and money transmitters charge big fees to do things that you get for free with a basic checking account. Yet a surprisingly large number of people don’t have a bank account at all.

Guide your team to financial wellness

Financial stress is very common in the United States, and stresses at home can be a big drag on employee productivity. While you can’t help employees overcome every obstacle, you can give them the tools to succeed with their personal finances.

Earned wage access is a valuable tool that can help workers avoid huge late fees and big interest rates. When workers can master their budget and break from the paycheck to paycheck cycle, their money worries will begin to fade away. Early wage access is the missing link to reach financial stability for good. As an owner or manager of a business of any size, you can help them make it happen.