How can a company help an employee in a financial emergency? One of the advantages of being a #bpo consultant of a portfolio of global #contactcenters is that I’m exposed to a variety of interesting ideas and innovative practices.
A few months ago, I was speaking with a CFO who explained to me how they implemented a financial benefit that was very much appreciated by their workforce. It is known as Earned Wage Access (EWA) or “on-demand pay” offered by a #fintech company called #payactiv. It provides a financial emergency option for employees. While it is always best for people to have an emergency savings fund, sometimes that does not happen and having a plan B can come in very handy.
How does Earned Wage Access work for the employee?
Financial emergencies can occur at any time -- a large, unexpected bill for car repairs, a medical bill, or a utility bill -- and the money is simply not there. Payday loans are expensive and risky as they can ensnare people in never ending debt with high interest rates. Sometimes asking friends or family members for money is just not a viable option for some people. So, enter plan B.
EWA works like this:
The employee can receive a portion of their earned pay in advance of #payroll day in different ways, some with no cost and others that have a nominal fee. For the no cost option, the money is deposited to a Payactiv Payroll #visa card. Payactiv collects the merchant transaction fees which is why it does not cost the employee any money. If, however, the employee wants the money transferred to their own debit card there is a $1 fee per day, capped at $5 for bi-weekly pay periods.
API Requirement
The CFO explained to me that this does not cost their contact center anything and normal payroll is not disrupted or changed. The key is to make sure whatever provider you use has an API feed with your payroll company.
So why should the employer care? Because it is the” right thing to do” is not a sufficient business reason for many CEOs to adopt a new employee benefit. However, there is good business justification. Employees that are stressed over money worries are not going to perform their jobs well. If stressed out workers interact with clients or customers, then there will be an impact to the company and not a beneficial one! In addition, this financial benefit can help HR with #recruiting and retention of employees as testified by other employers who have also implemented EWA. So, sometimes doing the right thing is good for business too. For Companies - Payactiv
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