South Africans are stressed and financially pressed. Research found that 54% of South Africans are unable to make their money stretch to month-end, and 57% say financial stress has significantly impacted their mental wellbeing. Financial stress is a known cause of depression and other health problems, such as the increased risk of heart attacks, hypertension, and panic attacks. The immediate risks to businesses include absenteeism, decreased productivity, and a lack of engagement – because stressed employees don’t leave their baggage at the office door.
According to the World Economic Forum, poor mental health costs $1 trillion in lost productivity every year, and Alexander Forbes’ Benefits Barometer notes that businesses lose an estimated R40 billion in earnings - or 2.2% of GDP - due to the impact of depression on the workforce.
On-demand access to pay as a solution to financial stress
Floatpays is an on-demand access to pay platform that lets your employees access a portion of their accrued earnings any time during a pay cycle. That’s right—no more sweating through the mid-month slump for employees. No more manually fielding requests for salary advances or employee loans.
Using Floatpays, your employees can draw down on a portion of their accrued pay whenever they need to – with no extra effort or cost on the business’s part. In fact, Floatpays reduces payroll admin by essentially turning employee pay into a self-service function. Employees are charged a low fee for withdrawals – or you can choose to sponsor this cost.
The 4 dimensions of financial wellness
Employees suffering extreme financial stress need support to build financial wellness. Here are four ways that you can empower your people with Floatpays:
Help employees achieve a manageable level of debt – or none at all
More than half of middle-income earners in South Africa spend their salary within five days of receiving it – and between 41% and 100% of their money goes towards paying off monthly debt. When unexpected expenses hit, employees often turn to payday lenders or loan sharks to get through the month. Floatpays is designed to give people an alternative to debt while encouraging them to save for emergencies. Instead of taking out a loan, your employees get on-demand access to a portion of their accrued pay to cover unplanned expenses. They can also use their accrued income to buy fee-free vouchers for essentials such as prepaid electricity, data and airtime, and medical care.
The percentage of accrued pay available to employees is capped, as determined by the employer, to prevent overspending and over-reliance on earned wage access.
Help employees financially prepare for an emergency
Geysers burst. Kids lose their school shoes. Medical emergencies happen. Life doesn’t always go to plan. Floatpays helps your employees prepare for unexpected expenses, reducing the need to use costly credit between pay cycles.
What’s more, Floatpays is the only on-demand access to pay provider that offers an interest-bearing savings account, powered by Standard Bank. Employees earn 4% interest* per annum on their investment, which helps them build a financial safety net that prevents them from falling into a debt trap. (*Interest rate correct at time of publication and subject to change)
Teach effective money management
Floatpays provides employees with financial tools and education designed by learning and development specialists to help them better manage their money and make lasting changes to their financial habits. Knowing how to create and stick to a budget, for example, is a critical life skill that sheds light on spending habits and ensures employees don’t spend money they don’t have.
The budgeting tool from Floatpays puts powerful financial insights into your employees’ hands. From within the app, they can track income and expenses, create a budget, allocate funds for upcoming expenses, and save for rainy days. The more they use it, the more entrenched the behavior becomes - when you know better, you do better.
Help employees achieve a manageable level of finance-related stress
Fostering financial wellbeing in the workplace can lead to a host of advantages, including increased employee productivity and performance, improved employee physical and mental health, recruitment and retention of the best people, and overall workforce morale and loyalty.
In being able to access their pay on demand, 96% of Wellness Warehouse employees said their quality of life improved and 77% reported little to no financial stress after using Floatpays. What’s more, 36% did not need to resort to loans, 23% relied less on credit, and 32% did not need to use overdraft facilities. Almost all felt more in control of their finances and found it easier to plan.
On-demand access to pay represents a significant shift in how employees are paid. Having instant, 24/7 access to their money is becoming a fundamental employee value proposition, but traditional payroll practices must evolve to meet this demand.
Employers have a crucial role to play in the financial wellness of their employees. By offering them on-demand access to pay, paycheque linked savings and financial education, you can create a healthy, happy, and productive workforce that drives business success.