#1 Thing Businesses Can Do for Employee Well-being in 2021

By Peter Mullen | May 26, 2021

Earned Wage Access Employee Financial Well-Being Hottest Topics

Why Earned Wage Access & Employee Financial Well-Being Are This Year’s Hottest Topics

Up to half of American workers live paycheck to paycheck. The biweekly pay cycle is an endless loop of emotional distress. How can your best employee be successful if they’re struggling to buy food? 

This is “Fork in the Road” year. Companies that do right by their low-paid employees will flourish over the next decade; those that don’t, will stumble. 

Learn from Payactiv SVP Marketing Peter Mullen why this year matters for your employees’ well-being programming than any memory. And what you can do to make a difference.

This webinar was originally recorded on May 1, 2021, for HRE’S Health & Benefits Leadership Conference.

Read the highlights.

Hey, everyone. I’m Peter Mullen. I’m the Senior Vice President of Marketing at Payactiv. 

We’re going to talk about Earned Wage Access. The title is, “If You Launch Just 1 Thing in 2021…” What is that thing? it’s the No. 1 program you can deploy into your business that will have the greatest impact for your employee’s wellbeing.

I’m going to make the argument it should be EWA. I want you to walk away from this conversation understanding how EWA can help you and how it’s just the start of what Payactiv offers. 

A game-changer for your business.

I’m going to talk about your business imperative to support your workers. 

I want to give you arguments, bullet points and statistics to help make a holistic case that you need to think differently in 2021. 

I of course hope it is Payactiv that will someday provide solutions for you. 

But the bigger picture is that I want to arm you with the right information to make the smart decisions for your business and your people.

a couch

Here is a story about the low-income worker in America today. 

It’s about a couch. 

Before I joined Payactiv, I worked for one of the world’s largest call centers. During Covid, we were poised to win our largest deal in years – a multimillion-dollar opportunity in the Midwest for +200 new workers. 

To win a call-center deal takes weeks of organization. You paint the interior of your building, you lay new carpet, you work with the customer-care agents so they say all the right things when the potential client comes in. 

Friday night comes and our big meeting is Monday morning. That’s when we realize we forgot to organize the lobby. My co-lead said it was no problem, that he would take care of it over the weekend. 

What I didn’t know is that he didn’t have a corporate card. It turns out he didn’t have a credit card either. His bank account didn’t have enough money to buy the furniture – which was less than $700. 

It’s Sunday afternoon when I learn all this. I had this really difficult conversation with him as he’s driving his kid to a soccer game. He was the assistant coach. He was embarrassed and uncomfortable. 

All I could think about as he stammered was this: how exposed and how vulnerable he must have felt with talking about basic personal money issues with his son in the passenger seat. It felt so incredibly “back against the wall.”

I’m telling you that story for a reason: It’s the story of the American worker in 2021. 

It’s a story of people struggling paycheck to paycheck, struggling to make sense of costs, struggling to get past the pandemic and move into the next stage.   

This story has a happy conclusion, by the way. We filled the lobby with furniture in time and we won that business.

44% of American workers are categorized as low paid, and that’s 53 million people overall

According to the Federal Reserve, today 37% of adult Americans do not have $400 to use for an emergency…or for couches that represent an incredible opportunity.

I’ve worked in high-tech for 20 years and some of the world’s best brands. But I started behind the counter at a family lumberyard in northern Indiana. Union guys taught me how to drive a forklift two years before I had a driver’s permit. They’d stand back and let me spill pallets of wood all over the yard. That’s what we did for fun in Indiana.

That 128-year business went bankrupt during the great recession. I share this because I understand the struggle of the American worker. On a single day, I received 32 debt collector calls. I’ve been on all sides of this conversation.

Enormous Differences, Immediate Impacts

I’m going to tell you about Earned Wage Access (EWA) and why Payactiv is the right partner. 

Low-wage workers are in peril. That has been the case for 40 years with flattened wages, rising inflation, globalization, and a bunch of other factors. 

The situation has never been more serious today. You need to adapt your business. 

The good news, and there’s a lot of it, is that services like ours can make an enormous difference and can have an immediate impact.

The Growth of EWA

2013
200%
6,375 per Hour

EWA is the simple concept of providing workers the ability to get their money on-demand as soon as they earn it. They get the money by pressing a button on their app. 

For 70% of American workers, payday is bi-weekly or longer, according to the US Bureau of Labor stats. 

The first transaction was in September 2013 in New Jersey. I know this because Payactiv created the category and that first transaction was ours.

Eight years later, where are we? 

There’s a group it’s called the Aite Group, a consulting firm in Boston that studies EWA. That right there tells you how much the marketplace has grown. 

Aite found between 2018 and 2020 total EWA dollar amount deployed to American workers increased from 3.2 billion to 9.5 billion, a 200% increase in three years. 

To put that in context, for multiple years Payactiv was the only game in town. Now you have more than 20 different service providers. 

In 2020, EWA was used by American corporations and American workers 56 million times. That’s 6,375 times per hour, every single day of the year.

EWA is an instrument whose time has come.

EWA is an instrument

Payactiv works with 2 million-plus American workers and 1,500 businesses, from the world’s largest business Walmart, all the way down to small businesses. 

We do it across verticals. We do it across categories. 

We have saved those businesses over $1 billion dollars total, and that is in helping them with recruitment, helping them with retention, reducing absenteeism, and attrition

We have saved over a half-billion dollars for our employees by reducing payday loans. Payday loans have a 400% average interest rate on average by the time they settle. They can be devastating. So can credit card debt. So can overdraft fees. 

We are a Certified Public Benefit Corporation. That’s incredibly important to know. 

We have a mandate to have a double-bottom line for both profit and for positive social good. 

If there’s one thing you need to know about Payactiv, it’s not about our pricing, or speed to implementation, which is literally hours.

 It’s not about the boost in NPS scores. We are awesome with all those things. 

But I want you to know about the Payactiv heart. Our DNA is to support the American worker.

We exist, and our services exist, to elevate the dignity of your workforce.

In 2021, doing more matters more than ever. 

Just this week, Payactiv was named the 2021 American Business Award Company of the Year for Financial Services

We also won the Corporate Social Responsibility Program of the Year for providing Earned Wage Access in the amount of $27 million to taxi cab drivers in New York, as they brought essential items back and forth across the city during the worst weeks of COVID.

Workforce

Now, I’m going to talk about the business imperative. My goal is to give you statistics that make the case your business needs to jump into EWA and other financial well-being solutions. 

Above, is a photo of Dallas during Thanksgiving week 2020. Cars wait in line to get food. These are suburban cars. They are downtown cars. They are country trucks. 

As you know, 44% of the US workforce is low wage.

It’s 53 million Americans, the equivalent of 10 South Carolinas. 

These big large abstract numbers. But I want you to understand how much of our U.S. workforce is standing over a cliff and they’re standing on glass. The glass is beginning to crack. 

When we look back at 2021, we’re going to see that it’s a “fork in the road” year.

Businesses have two choices. They can take the right fork and they can innovate. They can come up with new ideas to help their workforce and in the next 10 years they’re going to thrive. 

Or can take the left fork and go back to where they were pre-2020. We think these businesses will stumble.

For many of your workers, this is going to be a multi-year recovery. 

You will make an enormous difference if you are able to act. You will also out-hire your competitors. You will get those workers to stay longer. 

Here are some more statistics. They, too, directly influence your thinking as an HR or Benefits leader.  

82% of workers are more concerned about finances than their health. The Consumer Financial Protection Bureau (CFPB) just last month said 1 in 5 Americans have less than two weeks of cash.  

67% of workers have to borrow to meet their daily needs, according to our internal user surveys.

Of course, we must stress that across all businesses and if you are a person of color and in particular a woman person of color, you are disproportionately damaged more than everybody else.

Let me share how EWA is a positive contributor to a solution. 

With Payactiv users, EWA is not used sporadically and it’s not used continually. The myth of it being used in pushing forward debt is just that: a myth.

EWA is used for several consecutive pay periods and then halted. Rarely is it used for an entire year. 

Think about this in real life. A mom pays for tutoring for her kid for two months. A man is paying down his credit card debt for five months.  EWA is the bridge. We’re providing a bridge to get these folks off of the cracking glass.

My friend Andrea became a single mom at age 20 and she had two jobs. At home, she’d put her money in four envelopes in four corners of the house. Then she was too tired to get up and spend it. Her budgeting strategy worked and Andrea is doing great today. 

She was insanely lucky.  Most other people have to borrow to meet their daily needs.

One in two households had their income reduced

1 in 2 households lost or had income reduced during 2020.

Pew Research, 2020

Bloomberg reports the bottom quartile of Americans, those making less than $27,000 per year, are making 20% less than they did before COVID. People making less than $32,000 per year are currently (May 2021) better taking stimulus money than working, which is a major reason why you can’t hire the talent you need. 

Why all this big-picture thinking when you want a product demo? Because all of this matters as you consider ways to make your business successful. 

If you have a 20-person local bakery, if you have a 90,000-person international Telco, solutions like EWA are the fastest way to make a meaningful difference in the well-being of your workers.

The solution is EWA

top reasons for using EWA have to do with core needs

EWA is the most practical solution possible. Take the fork in the road and innovate your benefits package – It literally takes just hours.

More than 70% of all EWA transactions are used for core needs, according to the Financial Health Network. At Payactiv, our users access their app 16 times per month. They’re using it as a financial empowerment tool for managing their budget. 

Consider these statistics:

95% Interested in working for an employer who provides EWA
89% Would stay longer with an employer who offers EWA
79% Would switch to an employer who offers EWA
Visa Insights 2019, Earned Wage Access

Our studies in call centers where we work show we reduced turnover 36% in the first 30 days. The numbers around absenteeism are oftentimes even bigger.

For Your Employees

Dive into what Payactiv offers. As you’ll see, EWA is just the start: 

EWA is just the start of our livelihood platform

First thing you need to know is that this is a zero-cost benefit for the businesses. It is completely 100% free for you. 

Here’s what your employees get with the basic EWA offering (as I said, that’s just the start): 

  • Up to 2-day early Direct Deposit 1, 4-day early gov’t funds
  • Free instant EWA loads of their money on our platform, on our card
  • Tap-to-Pay and digital wallet (Apple, Google, Samsung)
  • Cash from ATMs, bank teller, and POS
  • No card minimum balance, no hidden fees
  • P2P payments, pay your friends
  • Card balance, transaction history, notifications
  • Lock/unlock card, replace lost/stolen cards from the app
  • Our card services are ready instantly (digitally in the app) when you sign up. The real card shows up five to seven days later. All this is FDIC insured.

All of this includes a holistic picture of a person’s finances.For a lot of you, these features are normal. You may have several apps or tools that do this. But for a lot of low wage earners, this is the first time they have an opportunity to get one “pane of glass” where all their financial life resides. 

Payactiv users can begin to save. They can understand how all the pieces fit together. 

It’s a remarkable empowerment tool.

For You - The Employer

I’ll say it again. For employers, Payactiv is free. We’re also the only program that has an Approval Order from the Consumer Financial Protection Bureau

There’s zero hassle about setting this up with your benefits team. The Payactiv system resides external to your systems and works through APIs. We can work with any platform that you have, whether it’s new or old. We also work with more than 130 different payroll systems and TA systems.

We can do all the things you expect: instant issue, batch processing, etc. 

We have a team of marketers that work with you on adoption and help your workforce stay up to date on all the ways we can support your employees. 

I want you to think about Payactiv as an extra marketing agency at your disposal. 

Because of our size and reach, we have the ability to constantly be building new tools, new features that your employees need the most.

Back Office Management
Here’s the dashboard you will see. You can track data and see patterns as they emerge. 

HR leaders tell us Payactiv is a valuable proxy tool for understanding changes that are happening in your workforce, often before you can see anything else happening. 

Are people taking out more money? Are they taking out less money? If they take out more money, do they stay longer or leave sooner? Are their spending habits and transaction habits beginning to change? All this helps you make strategic decisions. 

Put Financial Wellness in Reach

Put Financial Wellness in Reach
Here is the Payactiv signup page for users. It takes less than a minute to get started. The user dashboard shows income (see the blue bars?). A full 80% of hourly workers have sporadic or uneven pay. This helps them forecast what they need. The screen shows $412 accessible. In one tap, you can have that money ready to use, even if it is right between paydays.

As an employer, you can modify the carousels in the middle of the screen with your messaging and offers. Here, it highlights Walmart cash pickup, which is one of the many convenient services we offer.
Card Finacial Instruments
Your card page (left) empowers you to see your recent activity. It’s another way we provide financial empowerment. You can lock the card with one tap if you’ve misplaced it, and you can find ATMs. You can bundle multiple financial instruments into your Payactiv experience (right). This helps manage, track and transfer funds. Our financial lives are holistic, and our tools to manage them should be as well.

It’s so easy to set up direct deposit.Press the button and then the money is accessible to you. Our additional features are big hits. Hard cash disappeared during the pandemic, and so most things are now paid by credit cards and debit cards, and paid prepaid cards. If you’re a restaurant manager, Payactiv’s Timely Tips feature enables you to pay out your tips directly to your wait staff’s individual accounts. at the end of an evening. The staff awakes in the morning, and the money is on their card.

We also have a mileage payout. Great for salespeople to get reimbursed fast. We also have remarkable discounts that are growing every month. You can get a discount on prescriptions up to 85% off. You can get discounted $0.10 cents a gallon of gas at Murphy gas stations nationwide. That can save you hundreds of dollars annually. 

Integrated bill pay is a phenomenal service for seeing your bills all at once. It enables you to understand the big picture of your finances. I keep returning to the “holistic” perspective because it’s so important for your workforce to reach a place of sustained livelihood.
SmartSave Connect
This is your SmartSave feature (left). Slide that scale left or right to set aside money every paycheck. Because we know some of your spending habits, we can provide coaching on the right amount to set aside. 

I love this feature. This is Payactiv Connect (right). A lot of your businesses have internal communications tools, whether it’s Slack or a dedicated internal communications channel. We brought that functionality into the Payactiv app. 

As an HR leader, you can communicate with your entire workforce or communicate with groups, or individually. It has complete and total flexibility. This is great for messaging your employees. Several national businesses are rolling this out and finding it the best and simplest tool they’ve used for employee communications.

Summing It Up

Enhance Livelihood
Here’s Jessica living the livelihood dream. 

She’s getting her direct deposit early. 

She’s checking her earnings daily. Remember I said, your employees check their Payactiv app 16 times per month. 

She’s able to track her hours, and she can start seeing this holistic financial picture of her life. 

She’s getting her tips disbursed directly into the app. 

She’s able to get an Uber ride using EWA, and this is actually extra cool because the manager can send a car to go pick up one of his workers through our app as well. 

She can set aside money for a party that she’s co-hosting.

All of these features are getting her more positioned to take that next step toward financial wellness.
Nasa 2021 Mars Expedition
We’re at the end of the presentation. Here is an artist illustration of the Mars expedition occurring 202 million miles away. That’s the Ingenuity helicopter

moving back and forth across the surface of Mars and taking pictures.  If they can put a helicopter on Mars and make it fly, we can launch one great thing in 2021 to support our employees. Make it Payactiv EWA.
*The Payactiv Visa Payroll Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from/by Visa U.S.A., Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card.  Consult your Cardholder Agreement and the fee schedule. If you have any questions regarding the Card or such fees, terms, and conditions, you can contact us toll free 24/7/365 at 1 (877) 747-5862.

1 Many (but not all) employers, government benefits providers, and other originators send direct deposits early with an effective date of 1-4 days later. Beginning with your second direct deposit of at least $5 from the same source, Central Bank of Kansas City (CBKC) will post the funds to your Payactiv Visa Prepaid Card when we receive it, rather than on the effective date. This may result in your having access to the funds sooner. The date CBKC receives your direct deposit and the effective date are controlled by the originator.