Everyone is craving a return to some semblance of “normal.” Unfortunately, as the economy has reopened, maintaining adequate staffing has been a challenge for many businesses as they pursue that goal. With the competition for employees intensifying, business owners and managers across sectors are responding by thinking outside the box, turning to new incentives to attract and retain workers.
A recent article in The New York Times described a number of such strategies it uncovered, such as providing college scholarships, college subsidies for the children and spouses of employees, one-time bonuses, free appetizers for restaurant job interviewees, and a set of knives for aspiring culinary workers.
Another benefit that’s gaining traction — one that goes beyond traditional monetary rewards and which research has shown to be attractive to employees and loyalty-inducing — is called earned wage access (EWA).
Attract Employees with On-Demand Pay
EWA allows employees to access a portion of their pay as soon as they earn it, rather than having to wait until payday. According to the Visa Insights 2019 report on EWA, almost half of employees have less than $500 saved for unexpected expenses. When such expenses arise, workers with limited cash reserves appreciate having an alternative to borrowing from friends or family or paying exorbitant fees to payday lenders.
EWA provides that alternative, and enthusiasm for this kind of fast access to cash is growing. According to market research firm Aite Group, between 2018 and 2020 the number of EWA transactions rose by more than 200% to 56 million. In the competitive war for workers, a perk like EWA could be a valuable weapon. Nearly 8 out of 10 employees in the Visa study said they would be willing to switch to an employer that offers on-demand pay.
The Payactiv Solution
Hancock Whitney enables business clients to offer EWA through a referral arrangement with Payactiv. The Payactiv financial wellness solution can be effective for companies of all types with at least 100 employees. Workers who sign up can access half of their earned wages, typically up to $500, at any time. They use an app on their smartphone, view how much pay they’ve earned but have yet to collect, select an amount, and transfer it to their bank account or a debit or prepaid card.
Membership costs no more than a few dollars per pay period for employees. The membership relationship is between Payactiv and our clients’ employees, and Payactiv provides customer support.
Meet a Range of Financial Wellness Needs
The Visa report notes that 84% of employees spend time at work thinking about or dealing with finances each week, and about two-thirds feel personal financial issues are impacting their health. In addition to offering employees faster access to their pay, the Payactiv solution offers membership services that address these on-the job engagement issues. Among the services offered are financial consulting, budgeting and savings tools, bill pay and prescription discounts.
By providing on-demand pay and a broad range of financial wellness services that meet employee needs, the Payactiv solution could help return your company to normal from a staffing and productivity perspective, and allow you to continue meeting your business goals. To learn more, contact your Treasury Management or Merchant Services representative.