How Financial Wellness Helps Amidst Small-Business Closures

In the dead heat of summer, the coronavirus resurges, and small businesses are having to make a tough choice about their livelihood amidst financial stress. Nearly 66,000 small businesses in the US have shut down permanently since March 1, according to data from Yelp, while Harvard research predicts that number to be even higher, at 110,000 small businesses across the country.[1]

As small businesses close, unemployment rises. Workers across America are looking for new jobs, less financial stress, and better security for the future, which means that companies have an opportunity to meet their new workers’ needs and transition into a stronger workforce.

It’s unclear just how much of a toll this virus will continue to take on small businesses—which include restaurants, retailers, and other independent stores of five hundred or fewer employees—but many owners admitted to the New York Times that they couldn’t afford to take that chance. Businesses were counting on the summer to replenish and reopen—to rise back up from the ashes, so to speak—and yet the summer is almost gone and the pandemic is still here.

As more businesses shut down, former employees are looking to get back to work as quickly and kindly as possible. Companies that are not in danger of closure can meet their employees’ needs during this difficult transition with benefits that help alleviate financial stress and help attract new hires. One such benefit is PayActiv, the lead provider in Earned Wage Access (EWA), which enables workers to instantly access an already earned portion of their paycheck.

Backed by an award-winning financial wellness platform, PayActiv partners with employers across the nation to provide EWA to over one million workers. PayActiv is not a loan, and it’s not an advance—it’s simply access to the worker’s already earned wages that are stuck between pay periods. With PayActiv, users cut down their reliance on using alternative financial methods, like having to take out a payday loan or incurring overdraft fees and high interest, thereby lessening their financial stress.

Because small businesses make up over 44 percent of America’s economic activity, the aftermath of this many closures is going to have devastating effects, not only on the economy but also on the community.[2] New hires will be eager to get back to work but perhaps unable to wait two to three weeks for their first paycheck. Companies that provide PayActiv are better positioned to attract new employees because of its financial wellness benefits, which lessen the financial hardship of those living paycheck to paycheck.

Besides EWA, PayActiv offers other services that employees love, such as access to Uber and Amazon shopping, access to budgeting and savings tools, and prescription discounts with the RxDiscount program. For restaurants—the second hardest-hit small business, according to Yelp data[3]—PayActiv also offers TimelyTips, a program that accurately and instantly calculates workers’ tips.

The PayActiv platform doesn’t just benefit the employee. Companies that partner with PayActiv see over 30 percent reduced turnover and 100 percent increased engagement, motivation, and productivity from workers. Because when employees feel appreciated and respected in the workplace, they will likely stay with the company. Feeling valued and appreciated means, in part, honoring a worker’s time and effort for their wages.

While it’s difficult to put into words how much financial stress the US economy may endure because of the coronavirus, it’s far more difficult to acknowledge that our communities—our people—are suffering more. What matters most for employees right now is the acknowledgment of resilience, financial security, and company-wide support.

As the pandemic continues its plight, companies do not have to voyage these rough waters alone. PayActiv is here to help. To be a partner, to provide financial security to workers, and to support its employers.

[1] Emily Flitter, “‘I Can’t Keep Doing This’: Small-Business Owners Are Giving Up,” New York Times, July 13, 2020, https://www.nytimes.com/2020/07/13/business/small-businesses-coronavirus.html?referringSource=articleShare&login=email&auth=login-email.

[2] Flitter, “‘I Can’t Keep Doing This:’ Small-Business Owners Are Giving Up.”

[3] Ibid.