The Biggest Financial Pain Points of Your Employees and How You Can Help

When your employees go home at the end of a long day, they’re excited to see their families, spend time with friends, and take care of the regular needs they must meet in their daily lives. But depending on their financial circumstances, how they take care of their basic livelihood needs might vary widely.

In June of 2021, of the population said they were either extremely concerned or somewhat concerned about the state of their finances.

Your employees’ satisfaction during their personal time ultimately impacts their performance on the job. People who are stressed or worried are more likely to be distracted or withdrawn, sometimes even irritable or disengaged. In these situations, it’s easy for conflict between employees and their co-workers or managers to arise.

Other unwelcome manifestations of personal issues in the workplace include absenteeism or, in extreme cases, resignation.

In the next section, we’ll explore the downsides of a lack of employee satisfaction and employee engagement in more detail, as well as the benefits of getting it right.

Why Is Employee Satisfaction Important?

1. Increased Output

Employees who are more satisfied with their job produce more and complete their tasks more efficiently. This holds true irrespective of people’s job titles and pay grades.

2. Improved Employee Retention

When employees feel satisfied with their job, they’re less likely to leave. Staff retention matters to every company because recruiting employees is a time-consuming and expensive overhead for any business. The costs of posting job ads, interviewing candidates, confirming employment eligibility, and training new hires are easy to underestimate. Avoiding staff turnover in the first place is a more cost-effective way to fix the issue of employee retention.

3. Increased Talent Pipelines

Having satisfied people gives you an edge when attracting the best talent. When employees feel recognized and appreciated and believe that the organization has their best interests at heart, they’ll be more inclined to sing your praises to their friends and families. As a result, you’ll find it relatively easy to attract the interest of like-minded candidates.

4. Increased Profitability

All business leaders and managers need to keep a keen eye on their bottom lines. More satisfied employees result in more sales, lower costs, and greater profitability.

Top Financial Pain Points to Understand

Payactiv financial wellness services help users with their most common financial pain points. Follow along to find out how you can partner with Payactiv to boost employee experience and employee engagement.

1. Struggles Paying the Bills

Some of your employees might have a tough time coming up with the cash to cover expenses such as rent. Particularly in high cost of living areas, you could have workers that have to juggle the timing of bill payments to pay for groceries and other living expenses.

If your employees head to a payday lender, which is legal in 36 states, they’ll pay an average of 391% interest. Avoiding that massive cost could be a huge financial gain.

How Payactiv helps your employees: With Payactiv, employees have instant access to 50% of their earned but unpaid wages (up to $500) for a nominal flat fee. For instance, if they’ve worked one week out of a two-week pay cycle, they can access a portion of their wages early to help pay outstanding bills on time. They can even send payments directly from our app at no additional cost.

• No more stress of waiting for payday to pay bills
• Free unlimited electronic bill payments

2. No Easy Access to Financial Services

Some 7% of households in the United States don’t have a bank account, and an additional 19.9% are underbanked, according to an FDIC survey. When added together, nearly 30% of American homes are without basic financial services. The odds are that at least a few of your employees struggle here, but it may be more than you realize.

Without a bank account, something as simple as depositing a paycheck isn’t possible. Instead, your unbanked and underbanked employees have to take their paychecks to expensive and slow check-cashing businesses. Instead of a simple online money transfer, they pay a small fortune in transfer fees for services like Western Union and MoneyGram.

How Payactiv helps your employees: Payactiv provides free bank transfers and free electronic bill pay to users with earned wage access. This means they no longer need to worry about costly check cashing, money transfers, or electronic bill payment fees.

3. Spending Too Much on Monthly Living Costs

When you picked your cell phone provider, did you shop around for the best deal or just go with the most convenient option? Convenience has big costs, and switching to an alternate carrier like Republic Wireless or Google’s Project Fi can save you big every month. This type of savings extends to other parts of our lives as well.

Groceries, TV service, clothing, gas, internet, and other regular expenses offer plenty of opportunities to blow through the budget and then some. But for people living paycheck to paycheck, even small changes in spending habits can lead to big results.

How PayActiv helps your employees: Payactiv members enjoy several financial wellness benefits at no cost. For example:

• Payactiv includes purchase discounts such as prescription drug discounts. Users simply login into the app, look for discounts near their location and use it at stores where they already shop to get rebates.
• Free self-help guides to learn about the costs and debt traps associated with expensive short-term loans, installment loans, and credit cards.
• Access to free 1-1 credit counseling with trained financial coaches

4. No Emergency Savings

When you struggle to pay the bills every month and don’t have a bank account, the closest thing you have to savings is maybe a few bucks in a coffee can or under the mattress. An often-quoted study found that 40% of Americans can’t afford a $400 expense in an emergency. As a typical car repair or home repair can easily exceed that cost, this serious problem leads to major financial fragility in your employee base. The pandemic only made this issue more severe, with some 14 percent of Americans – or 46 million people – saying they’d wiped out their emergency savings by August of 2020.

If your employees can save up $400 or more in a savings account, they may be able to avoid some of the other financial pain points on this list. Avoiding payday lenders is easy when you have cash in the bank!

How Payactiv helps your employees: With Payactiv as an employee benefit, financial planning and transfers to savings are quick and easy. We help employees save with an innovative savings system built right into the Payactiv smartphone app.

5. Poor Credit

Your credit score is a gateway to many common benefits you might take for granted. A high credit score helps with new credit cards, low loan interest rates, easy signups for utilities and cell phones, and even getting a new apartment. With bad credit, you may struggle to find a place to live!

Great credit scores don’t happen on their own. It takes years of on-time payments, maintaining low credit balances, and other good credit habits to build a credit score in the 800+ club. Your employees may struggle with bad credit, as bad credit plagues about 30% of Americans with a credit score.

How Payactiv helps your employees: Timely access to earned wages enables employees to match their payday with their expense due dates. They can build a good credit score by staying current on bills.

6. Ineffective Communication

People need to feel connected to their colleagues and management team to truly feel part of the organization they work for. But too often, company communication is a one-way street. Think of one-directional emails, notices, statements, and letters. These offer no opportunity for employees to share their thoughts and feedback or ask questions.

Fortunately, today, digital employee collaboration tools and software are available to ensure that internal communications are bi-directional, timely, and meaningful.

How Payactiv helps your employees: We help your people stay in touch and engaged. Non-deskbound employees can get company announcements, reminders, and alerts while they’re on the go via the Payactiv app on their smartphones.

7. Last-Minute Shift Adjustments

Hourly workers, particularly those working in the healthcare, leisure, hospitality, and retail industries often find themselves at the mercy of last-minute shift or schedule changes. While most employers will do everything they can to minimize such instances, there are times when unforeseen events or circumstances mean they just need “more hands on deck.”

Situations where this might occur include an employee suddenly calling in sick or a last-minute birthday reservation at a restaurant for 20 people. It could happen in a hospital environment where a serious traffic accident or fire results in a sudden influx of new patients requiring immediate treatment.

How Payactiv helps your employees: If you opt into Payactiv’s services, you can give your employees easy access to your corporate shift scheduling system via their smartphones. They’ll get alerts when new or additional shift openings appear, which they can pick up  – with just a click on the app. You can also set up shift incentives (for example, paying out up to 65% of earned wages for additional shift work rather than the standard rate, which is up to 50%).

8. Payroll Blunders

Poor record-keeping and an over-reliance on manual data entry can result in payroll blunders that result in people either being over or underpaid or their payments being delayed. An error that crops up all too frequently in industries that employ hourly workers is the miscalculation of overtime pay. This can be a potential serious faux pas, as there are government rules that set out precisely how overtime should be calculated and who is and isn’t entitled to it in terms of their role classification.

Of course, any payroll errors will result in extremely unhappy employees, so this isn’t a mistake you can afford to make.

How Payactiv helps your employees: Through our app that integrates directly with your corporate payroll system, Payactiv allows you to pay your employees via a direct deposit method. This delivers many benefits to them; for example, they don’t need to go somewhere to cash their checks, they don’t need to be in the office to get paid, they never need to ask for lost or stolen checks to be re-issued, and they’re able to control where their money goes.

9. Lack of Adaptability

Autonomy is critical to employees’ satisfaction. None of us likes to feel that we’re just a nameless, faceless number that clocks in and out and aren’t appreciated as a human being. Employees often become disengaged and resentful if they feel they have no say or control over what they’re doing or that any deviation from their set schedules will be met with displeasure or a reprimand.

Giving people flexibility over when and how they accomplish their tasks can go a long way towards boosting employee morale. This might involve setting up flexible shift schedules or allowing them to access pay they’ve earned but not yet collected should they have an unexpected requirement for instant cash.

How Payactiv helps your employees: Our app allows people to own their days, which will enhance their overall employee experience. They can swap shifts with one another and access what they’ve already earned immediately to pay bills or buy what they need. No loans – their money, in their hands. As the employer, you can customize payment limits.

How You Can Help: Partner with your Employees for Financial Success

Talking about money is a big taboo to many people, so struggles with money can feel lonely and isolating. Partner with your employees for financial wellness, and you should see an overall improvement in employee morale and productivity. After all, if someone is worried about paying the rent, they may not be focused on your customers.

Work with your employees to help them with their finances beyond the paycheck. Through a combination of tools, apps, classes, and resources, you can help your employees level up their finances and achieve a new level of financial security they only dream about today.

Payactiv makes it easy for you to boost your employee experience by helping people access, plan, spend, and save to live today with dignity while building financial security and savings for tomorrow.

As we’ve outlined above, we can also help you take this a step further by introducing a range of other attractive, flexible workforce rewards and benefits that cost nothing to your company but deliver immense value to your employees.

Learn more about how Payactiv can help your business, or book your demo now.