Originally published on HR Tech Outlook.
Employees look to their employers for employment-related items beyond their jobs. These include health care and other benefits, as well as solutions for financial education and wellness. When an employer assists an employee in these matters, it creates a sense of security that not only increases employee satisfaction and loyalty but also drives productivity and retention.
This is especially true for employees who live paycheck to paycheck, face steep overdraft or short-term lending fees, or struggle to meet other obligations created before their paycheck arrives. Unhealthy financial status hampers the mental well-being of employees, which in turn has an effect on productivity at the workplace.
Adding to that is the ongoing pandemic, which has brought uncertainties in terms of employment and new sources of debt. At this crucial juncture, employers are looking to companies like FlexWage to help improve the financial well-being of their employees by providing access to earned wages before payday (Earned Wage Access).
FlexWage Solutions is the original innovator in the growing field of Earned Wage Access providers. “We started in 2010 with the mission to leverage employer’s existing wage data to help their employees develop a better financial footing and drive wellness,” said Frank Dombroski, Founder, and CEO, FlexWage Solutions. “We are the innovator in this space. Our solution is the most mature, secure, and scalable in the marketplace, with the strongest focus on compliance, risk, and regulation.” The core of the solution lies in the earnings data residing in the employer’s payroll and time/labor system, eliminating risk and enhancing efficiency.
First, FlexWage’s OnDemand Pay captures gross and net earnings rates at the employee level from the employer’s payroll system. Then, employees’ time and labor or POS system data are used to calculate how much they have worked within the pay cycle.
These two data streams are combined and based on the policies the employer has established. An employee can view an accurate calculation of the net pay due to them on any given day. Employees can instantly access portions of that net pay per the employers’ policies. The work doesn’t stop there. FlexWage has gone the extra mile with its solution and developed a system that helps in budgeting, planning, and cash flow forecasting, assisting employees to be more receptive to thinking long-term rather than just solving today’s problems.
Employer-provided liquidity and financial planning tools have been shown to materially improve hiring efforts, employee retention, productivity, and satisfaction. As an example, a leading financial services firm offered FlexWage OnDemand Pay to call center employees as part of their overall financial wellness initiative.
The call center was seeing a very high turnover rate, and given the considerable cost of hiring and training employees, solving this problem became a priority for the organization. Despite having an onsite HR team, who were regularly communicating with the employee base, the call center could not reduce the attrition rate. FlexWAge launched its financial wellness program and saw fast and strong adoption across the employee base. “Within a month, there was a 35 percent adoption rate, which for normal, voluntary benefits is exceedingly strong,” said Dombroski. “The employer told us that if they were to remove this benefit, they would have a mutiny.” As a result, the employees could avoid overdrafts, short-term lending, or late fees on their bills and manage their finances in a dignified fashion.
Through similar results delivered over the years to its clients, FlexWage has shaped the market. Employers are realizing that Earned Wage Access is an essential solution for their workforce and increasingly are relying on its ability to attract and retain employees. As demand for the benefit continues to accelerate, employers can take comfort in the fact that FlexWage’s solutions are compliant across all state and federal regulations, banking laws, and money transmitter laws.