Why HR Leaders are Rushing to Invest in the Financial Health of their Employees

Financial worries can be completely overwhelming. 59% of employees confirm that finances cause most of their stress and if employees feel burdened by stress, it becomes an HR problem. If employees are worrying about their next paycheck or how they’ll pay their rent arrears, they can’t focus properly at work and the organization suffers.

The financial situation of many Americans is much more unstable than they would like to admit, and it makes day-to-day living, including succeeding at work, hugely difficult. A survey conducted by Capital One and The Decision Lab found 77% of Americans are anxious about their financial situation and this, in turn, will impact their work. Employers have a duty of care to their employees and their financial health is a driving force behind the mental wellbeing of all employees.

In industries where you employ high numbers of shift workers and deskless employees, financial insecurity becomes even more prominent. Young people, women and people of color are the three demographic groups with the highest level of debt increase in 2021 and statistically higher numbers of these groups work in deskless roles.

HR leaders are recognizing the importance of the financial health of their employees and are actively looking for effective solutions to their needs. Payactiv is proud to be the pioneer of Earned Wage Access (EWA), a leading tool for helping employees take better control of their finances, but before we delve into this, let’s look at the workplace impact of employees with poor financial health.

How poor employee financial health impacts your business

The Federal Reserve reports around 40% of Americans can’t cover a $400 emergency from their savings. Many are living paycheck to paycheck with no opportunity to improve or increase their position, meaning the pressure of every day can easily become overwhelming.

Financial wellness pervades your every waking moment when you’re worrying about money all of the time. It relates directly to physical wellness and poor financial wellness quickly leads to high stress and stress can lead to more serious health conditions. Stress is directly linked to heart disease, poor sleep quality, mental health conditions and lowering your immune system.

From a business perspective, employees suffering any of these symptoms are not going to be able to perform to the best of their ability. In 2018, Insurers Willis Towers Watson’s Global Benefits Attitude Survey found clear connections between financial stress and work performance deterioration including:

• 41% more work time lost to absence compared to peers without financial worries
• Lower productivity levels (32% vs. 5%) than peers without financial worries
• Lower engagement levels (51% vs. 29%) than employees without financial worries

Businesses need to act to combat their employees’ financial health worries and provide a supportive work environment.

Delivering an effective financial wellness program

HR leaders need to find ways to support their employees in terms of financial wellness and an integrated financial wellness program does just that. Financial wellness programs support the employee but also the business too. When used in the right way they can lead to reduced absenteeism, lower staff turnover, and cut the costs of healthcare for the organization. Improved employee wellbeing is also something a business should be proud of. It’s not a direct financial gain, but it creates a better work environment and has a positive impact on the reputation of your company.

Providing employees with fairer access to their earned money is a key way of providing them with more financial stability. Our research has found approximately $280bn is stuck in the system during any given pay period. This is money that could help employees deal with their immediate financial stressors and work to move forward. We don’t believe simply providing money is enough, we understand the need for improved salaries, wages and better working schedules for many employees. We also understand that financial education is sorely lacking in some areas. However, real-time access to earned wages is an effective and positive way of helping employees access the money they need when they need it.

Companies can quickly and efficiently integrate their payroll with Payactiv and then employees can register and reap the benefits. The app download means Payactiv is perfect for deskless employees who have previously been excluded from employee wellness schemes due to their reliance on web-based platforms or servers, we ensure there is a range of features designed to give your employees the tools they need to manage their financial position better, including:

• Earned Wage Access: timely access to earned income when it matters and is most needed.
• Free financial counseling and educational support
• Budgeting tools to drive better financial management
• Goal-based savings for short or long-term plans
• Digital banking access via the Payactiv Visa® Card*
• Integrated bill management
• Discount and incentive offers
• Improved shift management and scheduling

Employees deserve to have access to the tools they need to make the most of their income. With an effective employee wellness program in place, organizations reap the rewards with employees who can focus on their work and not be impacted by the pressure that financial stress brings. The 2021 PwC Employee Financial Wellness Survey found employees feeling stressed are four times more likely not to meet their monthly expenses on time and two times more likely to have needed to ask for a payday advance or payday loan in the last twelve months. No one wants their employees to be going through this kind of stress and so with the right tools, you can help them avoid it. Payactiv is proud to have helped over 2 million workers to save over $400,000,000 using our platform and its many features.

Supporting employees to financial stability

Your employees are vital for the organization’s success but working to the best of their ability is difficult if their focus is on their bank balance. The tools are out there for HR to take responsibility and provide employee financial wellness programs that work. For more information on employee financial help and why it matters, you can download the latest Payactiv White Paper: Why Employers Should Focus On Employee Financial Health.

*The PayActiv Visa® Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant  to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are  associated with the approval, maintenance, and use of the Card. You  should consult your Cardholder Agreement and the Fee Schedule at  Payactiv.com/card411. If you have questions regarding the Card or such  fees, terms, and conditions, you can contact us toll-free at 877-747-5862,  24 hours a day, 7 days a week.