The idea of an employer being involved with an employee’s health and wellbeing would have once been frowned upon. That was a ‘private’ matter, best kept separate from work. At best, there might have been some token initiatives around physical health (gym memberships, information sessions on healthy eating and nutrition, etc.). But mental health and financial health? Not likely. COVID-19 has fundamentally changed this. The boundaries between work and life have become more blurred than ever before. Today, employees welcome initiatives that help them to more effectively manage all aspects of their health and wellbeing.
While a holistic approach to health is desirable, the most cut-through is being seen with financial wellbeing benefits. This is not surprising given the current cost of living pressures and stagnant wage growth. A 2022 survey of employees by PwC revealed that the impact of financial stress can be far-reaching. Respondents said it had a severe or major impact on mental health (34%), sleep (33%), self-esteem (30%), as well as productivity at work (18%) and attendance at work (15%).
Research from Mercer shows that in 2022, financial concerns such as ‘covering monthly expenses’, ‘being able to retire’ and ‘personal debt’ dominate the top 10 list of life priorities for employees.
For those employees stressed about finances, the PwC research indicates that 76% of surveyed workers would be attracted to another company that cares about their financial wellbeing. Even for employees who said they were not stressed, 57% said they would be attracted to another company that cares about their financial wellbeing. Note the key words here are “financial wellbeing”; it’s not necessarily about more remuneration.
A holistic financial wellness program combines tools, education, and resources to help employees progress towards their goals and create lasting behavioural change. An effective foundation might include offering professional coaching and education to help employees regardless of where they are on their life journey. Such a program would aim to give them:
Control over day-to-day finances (budgeting, debt management, etc.)
The ability to prepare for the unexpected (short-term savings, emergency savings, insurance, etc.)
A higher likelihood of meeting financial goals (retirement, home ownership, education, etc.)
Freedom to make choices in life (travel, etc.)
As part of a holistic suite of benefits, employers of deskless workers might consider offering the following benefits:
Providing access to a professional financial or tax advisor, or partnering with a local specialist to offer these services at a discounted rate to employees
Helping employees to save on tax with salary sacrifice schemes. This is where they pay for a benefit through their gross salary, which reduces their tax liability
Subsidising travel costs to and from the workplace – this is a valuable perk for deskless workers who cannot work from home due to the nature of their jobs
Using benefits to stretch salaries. An employee discount scheme is one way to do this. Such a scheme can help people save money on a range of items, from the weekly supermarket shop to health and travel insurance
With remuneration budgets being stretched to breaking point, employers might also want to consider how pay is administered.
The Mercer research suggests that many hourly workers see pay as a survival or lifestyle issue; it’s eaten away by commute costs, student loan debt, credit card debt, and other financial drains. The traditional model of being paid in an inflexible pay cycle with little or no early access to pay is starting to be challenged.
Providing access to earned wages before pay day – sometimes referred to as on-demand pay – is gaining traction as one way to offer greater pay flexibility. This flexibility helps align income and expenses by giving employees access to a portion of their accrued wages in advance of pay day, with the remaining portion paid at the end of the pay period. Unlike salary-based lending or payday loans, on-demand pay does not involve borrowing on the part of the employee, and usually carries little to no cost.
Humanforce has partnered with Wagestream so that employers can offer earned wage access to their deskless employees*. The combination of Humanforce’s workforce management software and the Wagestream platform is a perfect fit.
To cite an example, an employee may need to urgently get their refrigerator repaired. The cost of repairs may be $350, but the employee only has $250 in their bank account. This worker can now log onto the Humanforce app and pick up a shift to earn extra money. At the end of the shift, they can transfer the wages they earned instantly, rather than waiting another two weeks to be paid. This means they can cover the cost of the repair without having to borrow and pay interest, and of course it also helps the business fill more shifts.
Employees are also empowered to track their income on a day-by-day basis, providing a better insight into how much they are earning versus how much they are spending. A savings automation feature encourages people to work towards their long-term financial goals, as a percentage of each pay can be allocated into a dedicated savings account. For example, a shift-based worker on earning $28 per hour can arrange to receive $20, while $8 goes towards growing their savings.
There is clearly a strong demand for more benefits like this, where the impact is for employees is felt well beyond the workplace. As far back as 2020, when EY conducted in-depth research into the budding on-demand pay market, a groundswell of interest could be seen. That study revealed that 80% of surveyed individuals would use a form of on-demand pay. When prospective employees were asked if their view of a potential employer would change if it offered flexible income access, 59% said it would either “very positively” or “positively” make a difference. Just 2% said it would have a negative impact and 38% were neutral.
Given the (for now) hyper-competitive talent market, the tail end of 2022 and start of 2023 might be the perfect time to recalibrate what’s working and what’s not in your organisation, and to benchmark your benefits against the competition. Offering a personalised suite of financial wellbeing benefits might help set your organisation apart; but more critically, it may also have a lasting, meaningful impact on workers who are struggling.
For deeper insights about how to navigate the talent crunch, download our latest eBook.
*Early access to earned wages is currently only available to Australian Humanforce customers.
Humanforce is a leading provider of shift-based workforce management solutions that simplify onboarding, scheduling, time and attendance, pay, employee engagement, and communication. Customers in more than 23 countries use Humanforce to optimise costs, realise compliance confidence, empower their team, and drive growth. Humanforce was founded in Sydney in 2002, and today has offices across Australia, New Zealand, Singapore, and the UK.
For more information on how Humanforce can help your organisation to offer early access to earned wages, or to discover how our software can automate and simplify your workforce management processes, contact us or schedule a demo.