Business owners in minimum wage industries face unique challenges that can be difficult to remedy – even when the struggles involve payday.
The balance between employee financial wellness and an employer’s ability to lend a helping hand is often disproportionate. Walmart, however, aims to even the score.
Walmart just became an industry leader in redistributing financial weight. How did they do it?
Walmart signed up for a daily pay application to help alleviate financial burdens that plague their minimum wage employees.
Walmart is dabbling in daily payments
This week, Walmart will begin offering an instapay feature that allows their 1.4 million workers to access earned but unpaid income, a concept DailyPay has been studying – and perfecting – for more than two years.
Because the wages have already been earned, this method of daily payment is not a payday advance or a loan. This means it will not affect your current payroll process, or internal processes.
The app Walmart is using echoes DailyPay’s core message. We believe that providing sound financial advice, in addition to access to earned income, can help lessen financial burdens in the future.
This concept follows suit with one of the most common HR trends in 2018: financial wellness.
Financial wellness is in right now
Financial wellness programs have recently been highlighted as an employee benefit trend of 2018. The concept stems from previous studies on the impact of employee financial hardships and a company’s bottom line.
An Employee Financial Wellness Survey, conducted by PricewaterhouseCooper’s (PwC’s) in 2016, responses from 1,600 full-time employees, provides meaningful insights:
- 52 percent of workers worry about their finances.
- The younger the worker, the more likely he or she experiences worry.
- 64 percent of millennials said they feel stress about their finances.
- 45 percent said their finance-related stress had increased over the last 12 months.
Employees with financial stress aren’t leaving it at home. They are bringing it into the workplace, which limits focus and weakens engagement. Financial wellness programs have become a natural solution to the issue.
When your employees are able to take a break from financial woes, they can spend more time focusing at work. A recent Bank of America survey shows that employees who use financial wellness programs become more satisfied (78%), loyal (70%), engaged (68%) and productive (57%) in the workplace.
Walmart’s idea to offer a daily pay solution as a financial wellness program is both affordable and meaningful for employers and employees alike. Walmart even has opted to subsidize the daily payments.
How Walmart’s latest partnership translates for your business
Regardless of the size of your industry, a daily pay solution can provide answers to the problems you haven’t found a solution for.
Consider the business owner that pays minimum wage to the majority of their employees. This business owner also operates in an expensive city. Workers are constantly talking about financial burdens due to their low wages and high cost-of-living expenses.
How about the business owner who isn’t able to keep up with minimum wage increases? As a last-ditch effort to afford new wage rates, he or she must create unpredictable schedules that make it difficult for their employees to handle financial responsibilities.
The scenarios are endless, but they all portray the same thing; a catch-22.
Many retail and service industry workers are not earning enough to cover their financial obligations. But employers can only budget a certain amount of money for entry-level or minimum wage workers.
The inability to create a financial solution can lead to high turnover rates. DailyPay recently wrote about four industries that have the highest turnover rates. Each industry is also largely made up of minimum wage workers.
Offering employees access to their earned but unpaid income through an app like DailyPay can mean avoiding payday loans, late fees, or other costs that trap someone in the cycle of debt.
Walmart’s announcement is just the top of the iceberg. Many companies are focused on improving financial wellness for their employees. To keep up with the competition, it’s important for you to learn about what options your business has.
Get onboard with daily pay applications
Now that Walmart has made pay an active consideration for financial wellness, the idea of daily pay is at the forefront. You might be curious about how you can apply this strategy to your own business because not all of us can be Walmart.
Walmart spent two years building their customized program. However, there are similar programs that provide the same quality results.
DailyPay enables your employees to control when they get paid, pay before payday and empowers them to meet their financial goals. DailyPay connects to any payroll system that offers direct deposit.
Tending to your employees’ financial wellness will pay off in the long run. Employees that find financial security at your company stay longer, reducing your turnover and improving bottom line profits.