Creating Competitive Advantage with Financial Wellness Benefits

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Image: Financial wellness benefits like Earned Wage Access create a competitive advantage in a hyper-competitive labor market

Financial wellness benefits like Earned Wage Access (EWA) create a competitive advantage in a hyper-competitive labor market.

Labor shortages are impacting business in industries as diverse as food services, retail, fulfillment, transportation, healthcare, and hospitality. Additionally, post-pandemic inflationary pressures are increasing workers’ money stress. In this turbulent economic environment, financial wellness benefits such as earned wage access and personalized budgeting tools create a win for employees and employers. These benefits help employees with short-term cash emergencies and long-term financial planning. At the same time, they give employers a competitive advantage by improving talent acquisition. Additionally, financial wellness benefits reduce employee stress and increase employee engagement and productivity.

FlexWage Solutions provides Earned Wage Access and Budgeting, Planning, and Financial Education benefit solutions. FlexWage was founded in 2009 by Frank Dombroski, who pioneered and patented OnDemand Pay and Earned Wage Access.

Our mission is to give employers a competitive advantage by offering every employee the financial tools and resources necessary to improve their financial lifestyle and achieve their financial goals.

Frank Dombroski, President and CEO, FlexWage Solutions LLC

Hypercompetitive Labor Markets

According to research, labor shortages are impacting businesses in industries as diverse as food services, retail, fulfillment, transportation, healthcare, and hospitality. 

The Great Resignation, also characterized as the Great Re-Shuffle, has created a hypercompetitive recruiting environment. Moreover, academic analysis reveals that the massive resignations that started in 2021 are a “continuation of a long-term trend” that shows no signs of abating.

Companies must navigate this new labor market and apply innovative recruitment, engagement, and retention strategies to establish a competitive advantage.

Financial Pressures Are Increasing Employee Stress Levels

As the world recovers from Covid-19, post-pandemic inflationary pressures are increasing workers’ financial stress. According to the 2022 American Psychological Association Survey, 87% of respondents said increases in the cost of items such as gas, groceries, and energy were causing major stress.

The Purchasing Power Second Annual Report on the State of Employee Finances says, “Employees at all income levels were either unable to cover monthly living expenses like housing and food or lived paycheck to paycheck, barely able to cover monthly living expenses. They also had problems paying their bills on time.”

In the Brightplan 2022 Wellness Barometer Survey, “workers report that worsening financial health affects their engagement (47%) and productivity (45%).” Additionally, 92% of HR professionals stated that financial stress is impacting employee engagement and productivity.

Financial stress increases employer costs in health care coverage and decreases productivity and retention rates.

Financial Wellness Employee Benefits

According to the Purchasing Power Survey, 72% of full-time employees believe “that employers have a responsibility to help employees with their financial well-being.” The Brightplan survey result is even higher, with 88% of employees expecting support with financial wellness.

Employers seeking financial well-being benefits can get started with Earned Wage Access (EWA). EWA is a voluntary benefit that helps employees manage the ups and downs of cash flow by accessing their earned wages between paydays. Once employees can address their cash flow shortfalls, they can focus on learning to manage their money and budget and plan for their financial future.

Earned Wage Access with FlexWage OnDemand Pay

OnDemand Pay is the software behind the FlexWage EWA solution. It is an employer-based and employer-funded earned wage access solution. It integrates with the employer’s HR, payroll, and time and attendance data to provide employees with accurate, accrual-based wage calculations.

Employees use a free mobile app to get real-time access to EWA funds. Then, funds are deposited directly into the employee’s preferred account via their debit card. Fund transfers incur a small fee, and fees are capped per pay cycle.

The FlexWage solution gives the employer administrative visibility into the EWA platform. It also provides policy controls for earned wage access transfer amounts and frequency.

The employer’s payroll processes are not disrupted. The funds an employee transfers are deducted from the employer’s payroll deposits and accounted for on the pay statement.

FlexWage offers a streamlined implementation plan guided by client management. In addition, customer support teams are available 24/7 to assist employees with questions.

Budgeting, Planning, and Financial Education with Sum180

FlexWage OnDemand Pay gives employees access to earned wages to overcome short-term financial challenges. Once out of crisis mode, employees can gain financial wellness with Sum180, the FlexWage financial education, budgeting, and planning solution.

Sum180 provides step-by-step support and insights to employees on their journey to improved financial wellness.

An engaging, personalized mobile experience, Sum180 gives users an immediate budget, educational how-to’s, the ability to link and view all their accounts, and access to a live coach for questions and planning support.

Industry Pioneer and Patent Holder

FlexWage Solutions, located in Scottsdale, AZ, was founded after another historic economic crisis. Before the Covid-19 pandemic, the Great Recession of 2008, prompted by the housing subprime mortgage crisis, was the most significant global economic challenge since the Great Depression in the 1930s.

The financial collapse of 2008 created increased economic challenges and stress for workers throughout the U.S. At that time, most 40 million unbanked households in the U.S. did not have access to short-term credit other than payday loans.

Many workers turned to payday loans to access the money they’d earned before payday. Unfortunately, the high cost of payday loans creates a tough-to-break cycle. With APRs reaching just under 400% for an average loan and roll-over conditions requiring multiple payday loans to pay off the first loan, the impact magnified employees’ financial hardships.

Frank Dombroski
Image: Frank Dombroski, President and CEO, FlexWage Solutions LLC

Frank Dombroski founded FlexWage Solutions in 2009 to address the financial crisis and give workers an alternative to predatory payday loans. Mr. Dombroski, an expert in digital payment solutions with deep experience in the financial services industry, pioneered and patented OnDemand Pay and Earned Wage Access.

In 2010 FlexWage was granted a conditional patent (with the final patent issued in 2014 U.S. patent US8751338B2) for: “Systems, methods and computer program product of integrated payroll solutions enabling low cost on-demand intra-cycle payment of accrued employee wages, to meet critical cash flow needs.”

The FlexWage OnDemand Pay solution is the industry’s most in-depth, data-driven, accurate, transparent, and regulatory-compliant Earned Wage Access process. It has stood for more than a decade as the market standard.

Regulatory Scrutiny and Compliance

As the innovator of OnDemand Pay and Earned Wage Access, FlexWage has watched the market grow to include many vendors offering diverse solutions. Over the years, Federal and State regulatory agencies have scrutinized the many EWA solutions. Four main areas of regulatory risk for EWA include:

>>>Wage and labor regulations

>>>Lending regulations

>>>Money transmitter or transfer service licensing

>>>Consumer protection laws

Since its founding, FlexWage Solutions has been in ongoing communication with numerous federal and state regulatory agencies and consumer advocates. These agencies include the U.S. Consumer Financial Protection Bureau (CFPB), the Department of the Treasury, the Office of the Comptroller of the Currency (OCC), the U.S. Treasury, the National Economic Council (NEC), the California Department of Financial Protection and Innovation (DFPI) and numerous other states.

Today, FlexWage is recognized by the California DFPI as the only non-loan Earned Wage Access offering permitted to operate in the state without lender licensing. In addition, FlexWage is also the only EWA vendor recognized by the Kansas Office of the State Bank Commissioner (OSBC) as free from supervised loan licensing in Kansas.

FlexWage delivers “EWA Done Right” because it offers the most compliant, responsible, and transparent EWA solution in the market today.

Success for Employers and Employees

Bread Financial (Formerly Alliance Data Systems) enabled the FlexWage Earned Wage Access for their employees at the beginning of the second quarter of 2019. 

Since then, Bread Financial has found that OnDemand Pay from FlexWage has been a great benefit.  It helps employees that need some of their accrued wages before their next scheduled payday.  In addition, employees love the ease of activating their OnDemand Pay account, the easy and immediate transfer capabilities, and the quick responsiveness from the FlexWage support team.  In working with FlexWage, Bread Financial has shared that they are pleased with the service they receive, happy that their employees have the benefit, and love working with the FlexWage team.

A Way for Employers to Show They Care While Establishing A Competitive Advantage

A hypercompetitive labor market is creating pressure in many industries to find and retain employees, and inflationary pressures are increasingly creating employee stress about money and how to afford their household bills.

Employers offering financial wellness benefits show they care about their employees’ financial and mental well-being. At the same time, employers benefit from the competitive advantage financial wellness benefits create.

FlexWage financial wellness benefits like OnDemand Pay Earned Wage Access, and Sum180 personalized budgeting and financial education tools are win-win solutions for employees and employers. These benefits help employees with short-term liquidity issues and long-term financial wellness. At the same time, they give employers a competitive advantage by improving talent acquisition, reducing employee stress, and increasing employee engagement and productivity. Since its founding, FlexWage has focused on delivering the best possible financial wellness solutions for employees, employers, and society. As a result, employers can confidently implement FlexWage Solutions, knowing they have selected the originator of the industry. In addition, FlexWage’s patented process has been reviewed and approved by regulators, consumer advocates, employers, employees, and licensed partners for over a decade.

Ready to learn more?

Ready to learn more about Earned Wage Access and creating a competitive advantage for your business? Schedule an introduction call today!

Originally published on Global Business Leaders Mag. View the original article here.

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