When you own or manage a business, your financial focus is likely on the bottom line. It’s easy to get lost in strategizing over profit margins and cost reductions. Something business owners often lose sight of is that happy employees drive the success of a business. If your workers are stressed, your business will suffer on all levels, from a lack of engagement and productivity to a lack of good customer service and innovation. It’s imperative that employers invest in their employees’ financial health and wellness in order to see that same health reflected in their business.
Of course, financial health means different things to different people. For the hourly worker, it often means having enough for daily expenses and being able to get out of debt. Unfortunately, employers are often disconnected from the realities their employees face. An employee may be struggling to pay for their child’s doctor appointment or put food on the table for their family. They may be drowning in debt or have no savings to fall back on if an emergency arises. As an employer, you can support your employees’ financial health and wellbeing by learning about what their financial needs actually are. Opening up channels of communication by listening, observing, and being flexible to offer the kinds of benefits your employees want, is key to launching a successful financial wellness program.
Financial health and wellness are terms that reference someone’s overall financial situation. Good financial wellness means living in a comfortable situation where all basic needs are covered and other savings for emergencies and long-term financial health are being set aside. Those living with financial wellness feel that they have control over their day-to-day finances and don’t feel stressed about their future. They would not be put into hardship if an unexpected bill or expense comes their way.
According to the Federal Reserve, about 40% of Americans cannot afford to cover a $400 financial emergency from their savings. A survey from CareerBuilder found that 78% of Americans currently live paycheck to paycheck, including 9% of those who earn a six-figure income. Over the past year, 30% of Americans struggled to pay for monthly expenses when their income stagnated and 70% of Americans struggled to pay for them as income decreased. When we look at the reality of the last year, income stagnating or decreasing for the majority of people amid the COVID-19 pandemic has bred a disproportionate amount of stress-related symptoms in employees.
Financial wellness is directly related to physical wellness. Those with poor financial wellness often experience money stresses that can affect other parts of their life. Stress of any form is known to be bad for physical health. Symptoms and outcomes of living with stress include heart disease, digestive problems, lower immune responses, poor sleep, headaches, irritability, and other mental health conditions and disorders.
It’s no secret that living and education costs have increased at a far faster rate than the average income over recent decades. On top of living costs and education, household income, mortgage or rent payments, surprise medical bills, lack of emergency savings, and low financial knowledge are all stressors for employers to be aware of. Until recently, there has been a severe lack of access to reasonable banking services to quell some of these stressors. Overdraft fees, late fees, and payday loans all penalize people for accessing money. While we can’t change the institutions, we can change the way we approach our workforce. Transparency is paramount and deserved.
In a pre COVID-19 world, financial stressors were already creating an unhealthy workforce, but the issue has only been exacerbated since the start of the pandemic. In fact, 72% of Millennials and 68% of Gen Z are experiencing heightened financial stress due to the ongoing COVID-19 pandemic. In this day and age, it is nearly impossible for employees to get their heads above water. This leaves employees attempting to parse out bills and pay for their rent, medical bills, student loans, and more in bi-weekly or monthly periods in the hope that they can still afford food or medication for a loved one. No one should have to worry about paying for necessities like their next meal or a child’s doctor’s office visit and they certainly shouldn’t be penalized for doing so.
Minimum wage restaurant workers rely on more than half of their income to come from tips and often don’t have access to good banking services, leaving them to deal with carrying cash on hand or paying check-cashing fees. When the COVID-19 pandemic hit, these same workers now had to concern themselves with the threat of a cash-based economy. Tips in cash are unsafe and debilitating when contactless payments are sweeping the nation and safer payment methods are being introduced. Our workers deserve a better way to work, budget, save, and access what they’ve earned.
In a 2021 study from PwC (PDF), 45% of employees admitted that financial worries had impacted productivity at work and that their financial worries increased during the pandemic. The longer term impacts of the COVID-19 pandemic have only worsened financial worries and 26% of employees are concerned about how they will pay their bills without government assistance. Another 20% are teetering on the rope wondering how long it will be before the pandemic impacts their finances.
In fact, it has also affected workplace productivity. Of employees stressed about their finances, 48% said finances had been a distraction while at work, and 50% said they spend at least three hours a week at work thinking about or dealing with personal finance issues. If you can help alleviate financial stresses, it should come back to benefit the business through improved productivity and decreased absenteeism.
45% of employees productivity was impacted by financial worries during the pandemic
The Reality Of It…
The reality of financial health was already bleak in a pre COVID-19 world, but the impact of the pandemic cannot be overstated as it had a huge negative generational impact on many employees’ physical, mental, and financial health. This fragility is pervasive in the United States. Both employers and employees share in the cost of such hardship. Stress is clearly visible to the workers themselves but is often hidden from employers. Even if you can’t directly see the cost of employee financial stress in your company, studies show that stress drags down productivity at work.
Once you understand a problem, you can work on diagnosing it. There is often a disconnect between what financial wellness means to an hourly employee and the executives choosing the financial wellness benefits. While the data is very clear about employee financial health and workplace productivity, you don’t have to take our word for it. Every workforce is unique, so it’s often useful to engage with your workers to understand their financial needs and struggles as well. Ultimately, people need a way out of debt cycles and the ability to manage their money for daily needs first. After that, they can take steps to save toward their goals.
Payactiv offers these practical tools to help with everyday life like discounts, access to banking services without fees, smart savings and budgeting, free financial advice, and access to more earning opportunities through shifts. We align our offerings with the real needs of your employees and encourage you to continue to stay tuned in and responsive when they reach out for help. Of course, besides offering a financial health platform, you should regularly survey employees regarding workplace engagement and related topics. Annual or quarterly surveys are necessary as well. These offer valuable insights into your employees’ lives that may help you further custom-tailor a benefits package to improve employee financial health.
Align your offerings with the real needs of your employees
|Employee Needs||Payactiv Offerings|
|Daily Livelihood Needs||➔||Earned Wage Access|
|Can’t afford medicine||➔||Rx Discounts|
|Saving up for a goal||➔||Smart Savings|
|Planning for future expenses||➔||Budgeting|
|Looking for earning opportunities||➔||Shift coordination|
Custom-tailoring your benefits to younger and older employees will allow you to focus on what they’re focused on. Younger employees are concerned with daily expenses while older employees are concerned about market volatility, and how current and future trends will impact them before retirement. This hyper-focus on individual needs is one way to set yourself apart from other employers and create an engaging connection with your workforce. The United States now has the widest range of generational workers in its history and employees are seeking a wider array of options to aid them in their financial journeys. Whether an employee is working on paying off student loans or setting up retirement plans, you can be there to aid that employee through their life. Employers also need to go the extra mile and reconsider the way their incentives and packages reflect the needs of their employees in a brave new world.
When employers take on the role of helping employees improve their finances beyond the paycheck, it comes back in a way that benefits employee engagement. Employees prefer to work for an employer who cares about their financial wellbeing. They remember that their employer offered the EWA benefit and helped them keep the lights on or put food on the table. They will appreciate that their workplace gave them the tools to stay mobile when their car was in for repairs. They will appreciate the budgeting knowledge they learned to build an emergency fund and avoid getting behind on the bills. When you offer the Payactiv benefit to your employees, which comes at no cost to employers, they get this and much more. Employers that implemented a financial wellness solution saw a remarkable 88% of their employees engage with the service. Payactiv’s customers report increased retention rates and lowered turnover in businesses by 30% on average. In fact, in 2020, Payactiv helped businesses lower turnover by 36% in the first 30 days of deployment.
In 2020, Payactiv helped businesses lower turnover by 36% in the first 30 days of deployment.
As more employers adopt these solutions, it has become clear that if you put a financial wellness program into place, it will further help your business in multiple ways:
Improved employee wellbeing: It may not return dollars directly to the bottom line, but healthier workers may be happier and more productive, boosting overall output and leading to stronger company culture.
There are few platforms or services that offer a one-stop for employee financial wellness, but Payactiv’s vision is to make that a reality. Once your payroll is integrated with Payactiv, employees can sign up and start benefiting from the features that help them with their short-term and long-term financial needs. Benefits included in the Payactiv platform include:
Payactiv allows employers to give their employees on-demand access to their wages without disrupting their regular payroll periods or cash flow all at no cost to the business. Having access to earned wages offers a much needed alternative to high-interest credit cards, payday loans, and overdraft fees. It is that little extra breathing room that we all need at times to help us deal with whatever life throws at us at times. Our app also offers access to Uber and Amazon for users who don’t have access to a bank account or a credit card as well as prescription discounts and better rates for car insurance.
If you’re a seasonal hirer, you can rid your business of stacks of paper paychecks by recruiting large groups of employees with payroll cards. In a post COVID-19 world, smart savings and digital banking have become standard. If your company is looking to address your employees’ more immediate financial needs, like access to a first paycheck during the first week of employment, we have that in our offering. All year long, Payactiv allows saving and budgeting from the app, paying friends, and the ability to utilize the now imperative necessity of contactless payment.
For more comprehensive employee needs, our Livelihood platform closes financial wellness gaps and addresses both immediate and long-term financial needs and goals. Our users get free access to financial learning articles and one-on-one appointments with professional financial coaches to help improve credit scores, deal with debt, and learn how to budget. Users can start saving more successfully with our goal-based savings tool with real-time guidance about what is safe to spend and what is safe to save.
Like mentioned before, the Payactiv benefit isn’t just beneficial for current employees. If lowered turnover, healthcare costs, and absenteeism isn’t reason enough to consider offering a financial wellness platform, it is also a great tool for HR departments. In a competitive hiring environment, offering Earned Wage Access and the complementary set of financial tools as an included employee benefit, could help your business attract and retain the best talent. Creating a competitive advantage for hiring and recruitment has never been easier.
Workers can access their wages soon after they are hired instead of waiting 2 weeks. Many workers are in dire need of a paycheck right now. Employees are seeking companies that value them and care about their financial health. Offering access to financial wellness services like Payactiv is a perfect way to prove you care. When employees use Payactiv for EWA, they pay just $1 per day of use and with direct deposit to the Payactiv Visa Card, the service is free. This can help employees make a step in the right direction rather than suffer from late fees, overdraft charges, or taking on high-interest debt to cover short-term needs. By offering this, you simultaneously eliminate stressors for your employees and gain a competitive advantage in the marketplace.
After you’ve understood your employee’s financial needs and chose the best plan for your company, Payactiv’s EWA service is provided to your company free of cost. The only step left is meeting and connecting with our platform. Thankfully, large payroll providers like UKG, ADP, Paychex, and many others make this a simple and easy process.
You may see an improvement that helps your bottom line through lower absenteeism, higher participation in other benefits, fewer on-the-job accidents, and lower employee turnover.
Employers regularly see a 2x to 3x return when investing in employee financial wellness programs. When you use Payactiv for free, the ROI is immeasurably good.
Employers regularly see a 2x to 3x ROI
Now is the perfect time to join the movement of standardizing Earned Wage Access and empowering employees through financial wellness. In the simplest of terms, you can help your employees live the life they’ve earned. These offerings are not only about boosting profits. Access to EWA, digital banking, and on-demand pay, including wages and tips, is an invaluable and overdue human right. There is a humanitarian aspect to helping your workers. Managers and business owners can feel good about their workers succeeding both in and out of the workplace. Those happier workers may be more likely to stick around and work hard for the company’s long-term success. Programs that benefit employees often come back and offer a win-win opportunity for everyone involved.
Small to midsize businesses may think that employee financial wellness programs would be great, but the cost tag puts them out of reach. That doesn’t have to be the case. For example, Payactiv offers a long list of employee financial benefits at no cost to the employer. When your company joins Payactiv, your employees get access to an app that integrates with many payroll and HR systems, like the one you already use today, to facilitate Earned Wage Access and other valuable benefits.
Helping your employees better manage their finances is often a low-cost endeavor to support employees’ financial well-being that yields outsized results for both workers and their companies, with a clear ROI, improved employee loyalty, and better employee outcomes. While you may be busy with other parts of the company, ignoring employee financial health may cost your business thousands or millions of dollars per year. Luckily, Earned Wage Access (EWA) is an easy to implement, no-cost solution and a proven benefit to your bottom line.
With so much to gain and virtually no cost to your business, offering Payactiv as a benefit could be an easy decision. If your human resources budget is tapped out and you want to offer more, reach out to determine how you can implement Payactiv through an integration with your existing payroll solution. Giant employers like Walmart and small businesses alike find the Payactiv benefit to be a winner when it comes to recruitment and retention. Financial wellness platforms are a perfect way to create that edge your company needs to retain and attract employees. Learn more today or set up an appointment to find out how easy it is to get your business set up with Payactiv.
Today more than 15 million Americans work night shifts Employees working...
For many people, their first big purchase is their first car You need a vehicle...
Financial stress is taking its toll on US workers’ physical and mental...
© 2023 Payactiv, Inc. All Rights Reserved
* The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll-free at 877-747-5862, 24 hours a day, 7 days a week.
** Central Bank of Kansas City is the issuer of the Payactiv Visa Prepaid Card only and does not administer, endorse, nor is liable for the Payctiv App.
1 Standard rates for data and messaging may apply from your wireless provider.
Google Play and the Google Play logo are trademarks of Google LLC.
Apple and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc., registered in the U.S. and other countries.