Helping Employees With Income Liquidity May Be The Employee Benefit You Didn't Know You Needed

Many employees face income liquidity challenges that lead to increased debt usage. Income liquidity refers to the availability of cash on hand to meet financial obligations, especially financial emergencies. When employees have limited access to liquid funds, they may be forced to rely on credit cards, loans, or other forms of debt to make ends meet. This can lead to a cycle of debt that is difficult to break, making it challenging for employees to achieve financial stability.

Earned wage access (EWA) is a solution that can help employees overcome income liquidity challenges and reduce their reliance on debt. EWA allows employees to access a portion of their earned wages before payday, providing them with the flexibility and liquidity they need to manage their finances more effectively.

Here are some ways that EWA can help employees.

Avoiding late fees and penalties

When employees don't have access to liquid funds, they may struggle to pay bills on time. This can result in late fees and penalties that can add up quickly. With EWA, employees can access the cash they need to cover expenses and avoid these fees.

Avoiding high-interest debt

When employees rely on credit cards or loans to make ends meet, they may find themselves facing high-interest rates and fees. EWA can help employees avoid this debt trap by providing them with a more affordable alternative.

Reducing financial stress

When employees have access to the funds they need, they can reduce their financial stress and focus better on work.

Building savings

When employees use EWA to cover unexpected expenses, they can avoid dipping into their savings or emergency funds. This can help them build a financial cushion that can protect them from future financial shocks.

Many employees face income liquidity challenges that can lead to increased debt usage. Increased debt usage can lead to increased financial stress, which can lead to decreased productivity at work. Earned wage access can help employees overcome these challenges by providing them with the flexibility and liquidity they need to manage their finances more effectively. By reducing their reliance on debt, EWA can help employees achieve financial stability and improve their overall wellbeing. Employers can play a crucial role in providing EWA as a financial wellness benefit to their employees, helping them achieve financial security, reduce their financial stress and boost their productivity.

Boosting Employee Financial Wellbeing: HR's Guide to Gaining Buy-in

Ensuring the financial wellbeing of employees is essential for companies that want to achieve a high level of employee engagement, retention, and productivity. HR professionals can play a critical role in developing and implementing financial wellbeing interventions within their organisations. However, getting buy-in for these interventions can be challenging. In this blog, we will discuss several strategies that HR can use to get buy-in for employee financial wellbeing interventions in their organisations.

Align interventions with business objectives
To gain buy-in for employee financial wellbeing interventions, HR professionals must first show how these interventions align with the company's overall objectives. By linking financial wellbeing to business outcomes, HR can make a stronger case for the interventions. For example, HR can show how improving financial wellbeing can increase productivity, reduce absenteeism and turnover rates, and improve overall employee satisfaction.

Educate leaders and managers
HR professionals must educate leaders and managers about the importance of employee financial wellbeing, the potential impacts on business outcomes, and the interventions available. They must show how financial wellbeing interventions can benefit employees and the company. Leaders and managers must understand that financial wellbeing interventions are not only good for employees but also for the company's bottom line. HR professionals should also equip leaders and managers with the resources they need to support their teams and encourage their participation in financial wellbeing interventions.

Utilize data and metrics
HR professionals should use data and metrics to demonstrate the impact of financial wellbeing interventions on business outcomes. They can track changes in absenteeism rates, turnover rates, and employee engagement scores. By collecting and sharing data that shows the positive impact of these interventions, HR professionals can make a stronger case for their implementation.

Involve employees in the process
Employee buy-in is essential to the success of financial wellbeing interventions. HR professionals should involve employees in the development and implementation of these interventions. HR can use surveys, focus groups, or employee feedback mechanisms to gather insights on employee needs, preferences, and suggestions. Involving employees in the process increases engagement and ensures that the interventions meet the needs of the workforce.

Leverage technology
HR professionals can use technology to make financial wellbeing interventions more accessible and engaging for employees. For example, they can offer online financial education resources, financial planning tools, or access to financial counseling services. HR professionals can also use digital platforms to connect employees with financial experts and resources.

Communicate regularly
HR professionals must communicate regularly with employees about financial wellbeing interventions and their benefits. This can include regular updates, progress reports, and success stories. HR can also use communication channels like company newsletters, intranets, and social media to share information about the interventions and their progress.

In conclusion, HR professionals play a critical role in getting buy-in for financial wellbeing interventions in their organisations. They can use strategies like aligning interventions with business objectives, educating leaders and managers, utilising data and metrics, involving employees in the process, leveraging technology, and communicating regularly to achieve this objective. By prioritising financial wellbeing, companies can achieve a high level of employee engagement, retention, and productivity, leading to a stronger and more successful organisation.

‍Creating an employee experience (EX) that empowers women 

Attracting and retaining top talent is already challenging. But it requires extra effort and consideration if you want to create a diverse, equitable, and inclusive workplace where women feel safe, valued, and respected.

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That’s because many women still experience workplace challenges, including role and pay discrimination, limited mentoring and learning opportunities, harassment and bias, and unaccommodating, ‘one-size-fits-all’ HR policies and employee assistance programmes.

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What’s more, women find it more challenging to balance work and life demands, given that they carry more of the domestic responsibility than men, and they're not getting what they need from their employers regarding mental health support and fair treatment.

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There’s an opportunity for organisations to close the gaps and create a female-empowering employee experience. This article explores some ways to do that.

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How to attract, retain, and empower female talent

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To close the gap between what female employees want and what employers provide involves understanding their needs and integrating them into your employee experience framework.

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Floatpays’ ‘State of Employee Wellbeing Barometer’ provides insight into how to do this.

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Learning and development opportunities are highly valued

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In our research, more women than men (44% vs 39%) felt that having learning and development opportunities would improve their experience and wellbeing at work. 

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Mentorship and sponsorship are effective ways to help women learn and develop. Leaders who act as mentors to women in an organisation share knowledge and provide guidance, which is important for professional development.

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However, professional growth for women also requires sponsorship – where leaders advocate for them. Advocacy can take the form of expanding a woman’s visibility within the organisation or directly involving them in experiences/projects that will provide opportunities for career advancement.

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Close the gender pay gap and build financial wellness

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Pay equity is arguably the most crucial factor in empowering women.

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But South Africa still has a median gender pay gap of between 23% and 35%. Women also have to contend with bearing most of the domestic load – women head 42.1% of all South African households. So not only are women earning less, they carry a great personal financial burden.

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Our research revealed that 57% of female respondents (vs 49% of men) rated household expenses as a significant source of financial stress, and 52% rated the cost of food as a financial stress factor (vs 42% for men).

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Furthermore, 85% of female respondents said that having employer support in financial wellbeing would change their attitude at work, 84% said it would shift their views on management and leadership, and 86% said it would improve productivity and contribute positively to their physical and mental health. Herein lies the business case to close the gender pay gap – a financially well female workforce can positively impact a business’s bottom line.

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Aside from committing to pay equity, here are other ways you can help your female employees to improve their financial wellbeing:

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Create a discrimination-free environment

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People spend most of their lives at work, and if they can’t be themselves due to fear of being discriminated against, they’ll never be able to perform at their best. Females especially value the freedom to be themselves without fear for their safety and wellbeing.

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Here’s how you can create a workplace that encourages a sense of happiness, belonging, safety, and inspiration:

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The female employee experience should not start and stop with maternity benefits 

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Not all women want or can become mothers, while others may already have children of varying ages.

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This is why employers should avoid just focusing the employee experience on maternity benefits and childcare. Instead, it should cater for needs at different life stages and lifestyle preferences.

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Gender equity has come a long way, but it’s still not where it needs to be. Employers can do a lot more to make the workplace more appealing and comfortable for their female talent and in so doing, reap the benefits of gender diversity, equity and inclusion in their organisations!

Time to get future-fit: How to make your EVP attractive to the youth

The youth of today are your workforce of tomorrow. Attracting, engaging, and retaining this workforce will require an understanding of what it is that they value in terms of their working life, and how you can stimulate a positive sentiment about their work environment.

Businesses put a lot of focus on catering for Generation Z, the ‘digital natives’ born at the turn of the century who are entering the workforce in greater numbers. The eldest of this generation are approaching age 25, with many having graduated from college or university, getting married, and starting families.

Yet, just as businesses get to grips with the needs of Gen Z, researchers are starting to talk about Generation Alpha. Born between 2010 and 2025, Generation Alpha are not only digitally-savvy – they’re immersed in technology. And although they’re still young, they will eventually become the largest and wealthiest generation in history, the most educated, and they will be highly social and mobile. They’ll also have shorter attention spans, get bored quickly, and live with their parents for longer than generations that preceded them.

A future-fit employee value proposition (EVP) should create a remarkably human-centric experience that understands what matters most to the current and next generation of employees.

The youth of today expect more than money from their employers. In fact, they’ve been dubbed the generation that values purpose over profit. So, what do they want? 

Understanding young people’s attitudes towards work

There’s plenty of evidence supporting the benefits of hiring youth, yet Floatpays research found that only 38% of young people rate their work environment positively.

For them, a happy workplace:

The fact that nearly two-thirds of young people rate their working environment as mediocre – at best – highlights a business risk when it comes to attracting, retaining, and engaging young people at work.

That said, the research also revealed a major gap (and therefore opportunity) in how employers can support improving their young employees’ wellbeing - a gap that if closed, can enable employers to attract, retain, and engage young people at work. And that gap is mental health support.

Supporting employee mental wellbeing by reducing financial stress

Mental health is amongst the top 5 concerns for Gen Z, which is no surprise given that one global study found 46% of Gen Zs say they are stressed or anxious all or most of the time. Negative working environments can create and/or worsen mental health problems and when one considers how much of people’s lives are spent working, the workplace becomes a crucial space in which to positively support peoples’  mental health.

Floatpays research found that financial stress in particular is a major driver of poor mental health.  Building financial wellness reduces financial stress. The Floatpays State of Employee Wellbeing Barometer revealed that for young people alleviating financial stress means:

Employers would do well to focus employee wellbeing Initiatives that support their young workforce in the above mentioned areas as the overwhelming majority of young respondents stated that having their employer’s support in building their financial wellbeing would:

Young people entering the workforce today will drive the future success or failure of the businesses they work for. Employers need to focus on building financial wellbeing as part of a broader focus on mental health if they are to effectively future-proof their employee value proposition and ensure success. 

Money on their minds - why your employees can’t focus and how you can help

The majority of the South African workforce operates in a permanent state of fight or flight. With 75% of their salaries going to debt repayments, South Africans have little money left to cover monthly living expenses – and very often, none left for emergencies.

Dealing with this level of stress puts the brain in emergency mode – all the time – and it’s not good. The constant release of adrenaline and cortisol (the stress hormone) severely impacts peoples’ well-being: their brains and bodies literally behave as if their survival is at risk.

Money on the mind

When they’re worried about how they’re going to pay school fees, the electricity being cut off, or having an asset repossessed, employees find it difficult to concentrate, remember things, pay attention, or solve problems. And to think, many of them operate heavy machinery, perform complicated tasks, and handle sensitive company information.

In dealing with financial crisis after financial crisis, their “bandwidth taxes” increase, and their mental resources are sapped. They develop debt stress syndrome, which could manifest in obvious ways, such as lack of sleep, loss of appetite, depression, and mood swings.

Or it could have more severe consequences on the brain and body, including:

Being unable to manage their debt also impairs employees’ psychological functioning and decision-making. It consumes their thoughts and undermines their ability to think clearly.

To counteract the adrenaline, they might seek hits of dopamine (the feel-good hormone) in unhealthy places, like alcohol, drugs, or food. Or they could indulge in other ways, like payday spending sprees that result in impulse purchases, buyer’s remorse, and another long stretch to payday. To make ends meet, they might take out payday loans or other lines of ‘easy credit', which traps them in the debt cycle through high interest rates, late fees, and the need to take out new loans to cover existing ones. Once they’re in the debt trap, it’s nearly impossible to get out.

Yet, although most people suffer from debt stress syndrome, no one speaks about the emotional and psychological toll of debt – or the powerful mental and physical health benefits of getting out of debt. One way to solve some of the problems is by giving your employees early access to their earned pay – with no cost and minimal effort on your part.

If an employee can access a portion of their earned income – money they’ve technically already worked for – to pay for necessities instead of turning to credit, they reduce the amount of money they spend on servicing debt and can use it for living expenses instead. 

The powerful effects of debt relief on the brain

Research shows that when employees are paid more frequently – biweekly as opposed to monthly, for example – they can cover expenses faster and get ahead in paying off loans. They reported feeling less stressed and anxious, and the employer benefited from increased productivity, fewer mistakes, and higher work quality.

Paying off debt not only feels good; it can also lead to physical healing. With a weight off their minds and shoulders, employees have more time to think. They can focus on the task at hand, they learn faster, and their cognitive functioning improves. Lower debt means less stress, restored self-esteem, financial empowerment, and improved personal relationships.

In a word, they’re happier.

Paying off debt can also help your employees stay financially solvent. Over time, they can develop the discipline to keep their finances in check, and it becomes easier to make wise decisions about saving, spending, and tackling debt.

Move your employees from debt to a savings snowball

Floatpays helps your employees take those all-important first steps in moving from debt to savings. Instead of turning to credit, your employees get on-demand access to a portion of their earned pay whenever they need it to cover unplanned expenses and to manage their cash flow better. In not forcing employees to wait until payday to access what’s due to them, you free up mental bandwidth for them to do their best work. And that should be the goal of any employee wellbeing programme.

The Wellness Warehouse Success Story

With a shared philosophy of holistic health, it was a natural fit for Floatpays to partner with Wellness Warehouse and support their team to become financially well.

We've seen great impact across all four dimensions of financial wellness amongst Wellness Warehouse staff:

Have a manageable level of debt - or no debt at all
Financially prepared for an emergency
Improved financial acumen
Have a manageable level of financial stress

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"We partnered with Floatpays because they share our philosophy of holistic health. They understand the financial challenges that many of our team members face, and they have a cost effective, convenient solution that empowers our team members financially. What really resonated for us is that they teach financial responsibility and are on a mission to change habits. This is therefore a sustainable solution with lasting benefits, and not surprisingly, the response from our team members has been overwhelmingly positive", says Simon Alston, CEO of Wellness Warehouse.

Why financial wellness should be an integral part of employee wellbeing programmes

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.