The relationship between employer and employee has changed dramatically over the years, becoming less transactional and more of a partnership. A recent Bank of America survey shows a staggering 97% of employers feel responsible for the financial wellness of their employees. To address the changing dynamic, companies are taking strategic steps to
The American worker is currently facing unprecedented economic challenges with high inflation. In fact, after adjusting for inflation, hourly pay actually fell last year, meaning that workers, on average, saw their standard of living decline. The American Psychological Association found that
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Even if inflation has peaked, it remains historically high in many countries and may take some time to return to more comfortable levels. No wonder, then, that salary remains the number one priority, with just over six in 10 (61%) people saying it's the most important factor in a job, according to a study by ADP.
But if employers are not in a position to award salary increases or bonuses, what other kind of compensation might satisfy workers? The ADP data shows almost four in 10 workers would be happy with additional paid leave (39%), while shorter working weeks (32%), grocery or shopping vouchers (28%) or a one-off payment to help with the cost of living (26%) are next on the list. Companies that take an innovative approach to finding new (and potentially more cost-effective) ways of rewarding staff in difficult financial circumstances could find that there are benefits on both sides.
Life happens between paydays. One benefit that is quickly gaining popularity is earned wage access, which provides employees the ability to have choice and control over the timing of the pay that they already worked for. The rationale is quite simple — it's your money, and you've already earned it.
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The reality is that 32% of Americans said, faced with a hypothetical expense of $400, they would have paid by borrowing or selling something, or said they would not have been able to cover the expense. A financial setback can have an outsized impact that could take a long time to recover from. Earned wage access can help avoid that downward spiral.
The path to financial wellness can be an arduous one. There needs to be a bridge to the desired endgame of a healthy savings and robust retirement account. Employers can play a critical role in helping to build that bridge, brick by brick, with financial wellness products that really make a difference in people's lives. For example, something so simple as visibility into one's real-time earnings through an earned wage access platform can have a profound effect on their overall financial well-being. Knowledge is a powerful thing, and when an employee has knowledge of exactly how much money is available to them, they can make better and more informed decisions for themselves and their family. And best of all, this financial empowerment can help lower one's financial stress.
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Loyalty is a two-way street. Employers have an opportunity to demonstrate their loyalty and commitment to their employees by leveraging technological innovation to make a real difference in the lives of their employees. And a great place to start can be found in an unlikely place — the timing of their pay.
