Building a bridge to financial wellness for your employees

Illustration titled "Thought Leadership" with five light bulbs, one lit among four unlit. "dailypay" logo at the bottom.

The relationship between employer and employee has changed dramatically over the years, becoming less transactional and more of a partnership. A recent Bank of America survey shows a staggering 97% of employers feel responsible for the financial wellness of their employees. To address the changing dynamic, companies are taking strategic steps to deploy benefitsthat can make a truly tangible difference in their employees' financial lives.

The American worker is currently facing unprecedented economic challenges with high inflation. In fact, after adjusting for inflation, hourly pay actually fell last year, meaning that workers, on average, saw their standard of living decline. The American Psychological Association found that 65% of Americans reported feeling stressed about money in February 2023. Individuals with high financial stress are twice as likely to report poor health overall and are four times more likely to complain of ailments, according to Forbes.

Read more: Student loan payments restart in October. Are employees ready?

Even if inflation has peaked, it remains historically high in many countries and may take some time to return to more comfortable levels. No wonder, then, that salary remains the number one priority, with just over six in 10 (61%) people saying it's the most important factor in a job, according to a study by ADP.

But if employers are not in a position to award salary increases or bonuses, what other kind of compensation might satisfy workers? The ADP data shows almost four in 10 workers would be happy with additional paid leave (39%), while shorter working weeks (32%), grocery or shopping vouchers (28%) or a one-off payment to help with the cost of living (26%) are next on the list. Companies that take an innovative approach to finding new (and potentially more cost-effective) ways of rewarding staff in difficult financial circumstances could find that there are benefits on both sides.

Life happens between paydays. One benefit that is quickly gaining popularity is earned wage access, which provides employees the ability to have choice and control over the timing of the pay that they already worked for. The rationale is quite simple — it's your money, and you've already earned it. Empowering employeeswith the ability to dictate the timing of their pay provides them with a valuable tool to stay out of the debt trap associated with payday loans and high overdraft fees. It humanizes pay and provides a sense of dignity and control.

The reality is that 32% of Americans said, faced with a hypothetical expense of $400, they would have paid by borrowing or selling something, or said they would not have been able to cover the expense. A financial setback can have an outsized impact that could take a long time to recover from. Earned wage access can help avoid that downward spiral.

The path to financial wellness can be an arduous one. There needs to be a bridge to the desired endgame of a healthy savings and robust retirement account. Employers can play a critical role in helping to build that bridge, brick by brick, with financial wellness products that really make a difference in people's lives. For example, something so simple as visibility into one's real-time earnings through an earned wage access platform can have a profound effect on their overall financial well-being. Knowledge is a powerful thing, and when an employee has knowledge of exactly how much money is available to them, they can make better and more informed decisions for themselves and their family. And best of all, this financial empowerment can help lower one's financial stress.

Prioritizing your employee's financial well-beingis not just a good thing for employees, it's a good thing to do for the business. Eighty-four percent of employers now say offering financial wellness tools helps increase employee retention, according to Bank of America. And 91% are seeing higher employee satisfaction when offering resources to manage overall well-being.

Loyalty is a two-way street. Employers have an opportunity to demonstrate their loyalty and commitment to their employees by leveraging technological innovation to make a real difference in the lives of their employees. And a great place to start can be found in an unlikely place — the timing of their pay.

For more details on the article,  see the source

See Why Top Companies Choose DailyPay

Empowering for Employees

Greater financial control with access up to 100% of their DailyPay balance to meet the challenges of unexpected financial disruptions.

Improved planning with visibility to spending and earned pay in one easy-to-use app.

No need for a pre-existing checking or savings account.

Simple and Secure for Employers

Minimal change to payroll processes — DailyPay handles it all.

Seamless integration with HCM, payroll, banking and benefit applications.

Enterprise-grade platform that keeps data private and the service running so it's always there when your employees need it.

DailyPay is Trusted by Leading Companies

Six Flags
Dollar Tree
HCA Healthcare