Guest blog for Reflexis
After years of experimentation, the jury is in on financial wellness for employees. Employers offer financial wellbeing programs primarily to enhance the employee experience. Those that prioritize and deliver financial wellness benefits for their employees see improved productivity and retention. Employees, whether they actively use those benefits or not, appreciate that the company cares about their engagement and well-being. This benign cycle has the potential to unlock the individual potential of every member of your team.
Early wage access is a key financial wellness tool to help employees better manage their expenses from paycheck-to-paycheck and avoid expensive short-term (i.e., payday loans) and long-term (i.e., “raiding” retirement plans) borrowing for an immediate cash need. It gives employees more control over access to their earned wages and it’s an increasingly important competitive benefit for retention.
Creating an Early Wage Access Program
When implementing early wage access, most retailers are looking to align the solution closely with their corporate strategy and culture, all the while ensuring a fully-compliant and comprehensive early wage access solution.
Using actual payroll and time/labor data from the systems of record to calculate net wage accruals is fundamental. Retailers can use this data to create a program with confidence that store associates are accessing their wages accurately and not creating any kind of liability between the employee and the employer.
Alternatively, if wage access is based on an estimation of time or payroll data and then funded by a third party, it creates a liability which then must be collected by such third party at a later date (on payday or after payday). This can result in additional costs and stress for the employee if the advance or loan cannot be repaid on time. It also puts the employer and employee at arm’s length on payday. Accuracy of employee pay statements, accurate paystub reconciliation, and maintaining the direct link between the employer and employee around pay are all important factors in the right early wage access program design.
Focusing on Benefit to Employees
Tailoring policies for the frequency, percentage of net wage accruals available to employees, and minimum/maximum amounts that can be drawn also help retailers fit the program to their culture and objectives, and insures responsible access. Employers should avoid program design components such as short decision windows, which create impulsive action by employees and are, as such, counterproductive to financial wellness goals.
Best-in-breed, AI-focused labor management, mobility, and analytics solutions, like those offered by Reflexis, help unleash the power of store associates to enhance customer engagement, which allow financial wellness solutions like early wage access to enhance their own engagement and productivity, through growing financial confidence and security for themselves.
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Carla Dearing is Head of Product at FlexWage Solutions, the leading provider of employer-sponsored early pay and financially responsible short-term liquidity solutions for employees.
To learn more about FlexWage, join them at Reflexions 2019, Booth 8. Chris Suppa, SVP, Business Development, for FlexWage will be available at Reflexions to discuss OnDemand Pay, FlexWage’s early wage access solution, and engage and explore retailers’ strategies and objective in financial wellness of store associates.