How To Alleviate Employee Financial Distress Post COVID-19

Have you ever wondered how much reduced productivity costs businesses? 

BrightPlan’s 2021 Barometer Wellness Survey found that employers collectively lose $4.7B a week due to reduced productivity. The foundation of this statistic is based on financially stressed employees reporting they work (individually) 15.3 hours a week at a reduced level of engagement and productivity. Paired with PwC’s recent findings of 60% of employees stating they feel more stressed financially since the beginning of COVID, the impact of financial burden could be costing your company more than you know. From a socially conscious point of view, 30% of employees have indicated a deterioration in their mental health since the beginning of COVID due to financial stress. 

Traditional methods of amplifying employee wellbeing are outdated post the global pandemic, so much so that Fintech leaders globally are making drastic changes to their company infrastructure to incorporate a modern approach that has a higher efficacy in the current social climate. 

There are a few methods you may adopt to tackle the rising concern of negatively impacted mental health and financial stress that impacts the quality of life of your employee, as well as (arguably less importantly) their ability to be focused at work. You may have seen on the news recently that Paypal decided to deep dive into the financial situation of stakeholders and shareholders in hopes of creating a plan that alleviates financial stress by providing employees exactly what they need.

What they found was that a large portion of their employees had trouble paying their bills each month. To analyse further, they dived into discovering the net disposable income of their employees, which was calculated by minusing tax and bills of their income. The average NDI they found was alarming – 4-6%! As the safety net of disposable money was so small, it made sense that many employees were stressed on a day to day basis and couldn’t afford the daily unexpected expenses that seemed to pop up. 

Paypal decided to tackle this by working towards increasing the NDI % of their employees, and offering grants and pay rises. Although this is a sound solution, this solution may not be accessible to many smaller businesses operating with a tight budget. However, just because you’re a smaller business, doesn’t mean you can’t make employee wellbeing and financial freedom a core offering and value at your company!

A viable alternative to increase the cash flow safety net for your employees is to allow them early access to their earned wages. This HR payroll integration permits employees to access the money they have already earned through hours they have worked. The result? The ability to save better, budget smarter, and afford unexpectedly incurred expenses… without falling into the cycle of having to make a cash advancement or repayable loan

This simple solution alleviates your employees from some financial stress, promotes productivity and engagement, and enhances their quality of life by eliminating factors that were negatively impacting their mental health. 

To learn how you could adopt this modern HR solution and make employee wellbeing your employer value proposition, visit Paytime.