No matter how well you plan and stick to your budget, a surprising medical bill or a higher-than-average electric bill can throw you off course. (Photo: Shutterstock)
As millennials begin to own the majority of the workforce and Gen Z gets their start, an employee benefits revolution is inevitable.
Think about it: Employee benefits haven't changed in years. Every benefits package may not look exactly the same, but they include the same general ideas: paid time off, health insurance, maternity leave, maybe even 401(k) matching. However, 20 years ago, that was all a company needed to offer to be interesting to applicants. That's not the case today.
Today, more companies are offering child care, unlimited vacation time, dog-friendly offices, remote capabilities, free food, student loan reimbursement, and more. Airbnb even gives their employees a $2,000 travel stipend to use on Airbnb properties.
So what's the number one most buzzworthy employee benefit of 2020? It's actually not free office snacks or unlimited PTO. According to CNBC, it's "getting paid at any time, not just on payday."
|Financial wellness for your employees
According to Career Builder, 78% of Americans live paycheck to paycheck. Unplanned expenses often result in debt traps. No matter how well you plan and stick to your budget, a surprising medical bill or a higher-than-average electric bill can throw you off course. That's why people often resort to high-interest payday loans or otherwise end up in debt.
A 2018 Harvard Kennedy study concluded that employer-sponsored financial products were "more efficient than market alternatives" due to reduced cost and inclusivity. There are no credit checks and no hidden fees. By providing financial wellness products for your employees, you can be a part of the solution to break the paycheck to paycheck debt cycle.
|How early wage access helps employers
If 78% of Americans really are living paycheck to paycheck, then it's probably safe to say that a good portion of your employees have financial stress. Financial stress can be a huge distraction and can lead to lost productivity and high turnover.
This study showed that nearly one in three employees are distracted at work due to personal finances. Many of them spend at least three hours per week during the workday thinking about their financial stress. The same study also proved that even people earning over $100,000 per year hold credit card balances and find it difficult to cover their household expenses on time. Early wage access is not just for your lowest-paid team members!
All things considered, financial wellness benefits can help the company just as much as the employees. Based on statistics generated by Rain, early wage access can result in 40% lower turnover, a 200% increase in job applications, and as much as an 86% improvement in employee productivity.
Reduced turnover
Employees who frequently take advantage of your early wage access benefit are much less likely to leave and seek alternative employment. They'll feel secure with their benefits package and have less financial stress, and they'll be able to see the fruits of their labor with you every single day.
Increased job applications
Having early wage access in your benefits package presents a strong case when candidates have a choice of employer. It stands out as a more unique, modern benefit that not many other employers are offering.
Improved productivity
With early wage access, your employees will be less stressed and more inclined to put their best foot forward at work. Plus, on-demand pay may encourage your employees to take on extra shifts because they'll know that when it's over, they can log in and withdraw enough money to go out to dinner.
|How to offer on-demand pay
You're probably thinking, "on-demand pay sounds nice, but what an administrative nightmare!"
As long as you have the right systems, on-demand pay does not have to change anything about your administrative practices. On-demand pay is becoming an industry of its own, meaning there are companies out there willing to manage this process for you at very little or no cost.
You have three options when it comes to on-demand pay:
- Set it up yourself (costing you potentially thousands of dollars and hundreds of administrative hours)
- Pick from one of the very few payroll providers that already offer on-demand pay (switching payroll providers can be a huge headache)
- Sign up with an on-demand pay vendor that can integrate with the systems you already have in place.
Most on-demand pay vendors are free for you to use but might charge your employees small transaction fees. These fees do not cost any more than an ATM charge, and much healthier than payday loans.
There's no harm in signing up with an on-demand pay vendor, especially since it would be a voluntary benefit for your employees. What better time to do that than now?
Anastasia Iliou is the marketing manager at Rain. The Rain Instant Pay app provides on-demand pay, checking accounts with overdraft protection, bill alerts, and more and is available to employers for free.
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