Walmart’s ticket to employees’ financial security: Advance payday, budgeting help

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When Walmart sat down with employees late last year to learn about their financial struggles, the company was surprised at what it found. The retailer discovered that while employees actually were planning quite well when it came to retirement — thanks to the company’s 401(k) participation efforts — workers did have serious concerns about meeting more immediate financial needs.

“There was this timing issue that kept cropping up that was very important to them,” David Hoke, senior director, associate health and wellbeing at Walmart, said this week during the Integrated Benefits Institute’s annual forum in San Francisco. “They would have to pay their rent or other bills, but couldn’t because they hadn’t gotten paid yet.”

In an attempt to ease workers’ financial strain, the retailer added a new benefit, allowing 1.4 million of its employees to receive wages before their next payday. Instead of waiting two weeks between paychecks, Walmart employees now can use a financial app, called Even, to access a portion of wages for hours they have already worked. Financial tech company PayActiv is also collaborating with Walmart on the service, which will help workers avoid expensive payday loans, Hoke said.

Perhaps more significant are the financial-management benefits of the app, Hoke said. Even, which connects to workers’ bank accounts, also allows employees to make savings goals and manage their finances by pinpointing exactly how much they can safely spend before their next paycheck. “Now they can see exactly what they have left in their accounts that they are able to spend on,” he said. “We’re trying to make it easy for them.”

The benefit was quietly announced in December, and has already become a popular offering among employees. It has 80,000 participants, and more than $30 million have been moved since the offering began, Hoke said. He expects those numbers to rise significantly over the next six months to a year, during which time the firm plans to push the offering.

“Financial stability is a key issue for most of America, and if we make it easier to achieve financial stability, then people can focus on other opportunities available to them so they aren’t stressing about their problems,” Hoke said.

Walmart covers the entire cost of Even’s automated financial management tool for both hourly and salaried associates, and allows employees to use access wages early, via a feature called Instapay, up to eight times per year for free. After that, employees can pay $3 per pay period for access to Even Plus, a premium version of the app that offers additional financial services; the $3 also covers transaction fees.

“With Even and PayActiv, the thinking is, let’s lower [employees] stress by telling them what they can spend and give them access to wages ahead of time to fix timing issues when life gets in the way,” Hoke said.

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Financial wellness Financial stress Financial planning Retirement planning Retirement benefits Retirement readiness