Making The Business Case For Employer-Sponsored Financial-Wellness Tools
For all the myriad challenges COVID-19 has created for the world of work, it’s also created some critical opportunities. Jeff Gies, ADP vice president, told PYMNTS in a recent Masterclass discussion that one such opportunity has been the financial wellness offerings that many employers are building out for workers who now receive electronic pay.
COVID-19 has employers everywhere reorienting their payroll strategies around electronic pay. Gies said that where employers in the past might have worried about worker reluctance around electronic pay, that’s evaporated amid the pandemic.
He said workers telecommuting from home and unenthusiastic about handling paper checks have opened the door for organizations “to really have the ability to encourage electronic pay even to those that don’t have a traditional bank account. And that’s kind of the start to this whole financial wellness spectrum, because what comes with electronic pay is the technology behind it. That tech gives organizations the platform to deliver more financial wellness initiatives and strategies, because that really builds the core foundation.”
In the post-COVID world, Gies said, things that might have been considered perks are likely “to become kind of ‘table stakes’ for organizations.” He said workers are going to increasingly expect employers to deliver financial tools like early access to pay and flexibility in how and where the money goes.
Organizations that understand that and build out payroll rails accordingly will be positioned to attract and retain the talent that’s coming back to the workforce post-pandemic, Gies said. But companies that don’t, won’t.
How To Add Financial Wellness Tools To Electronic Pay
Gies said the key for organizations looking to build financial wellness strategies is using a phased approach.
He said a company’s short-term goal should be determining what the firm can deliver quickly and easily to employees that’s likely to engage them. But longer term, the strategy is to tie all of an offering together in “a cohesive fashion,” Gies said.
“You help people to understand that once you get through the core foundation of putting together a financial plan, it gives them better insight into their disposable income to then apply to things like healthcare costs,” he said. “And [that] lets that employee see the data and determine how they want to reduce their costs to further increase disposable income.”
From there, it makes sense to help employees move on to things like 401(k) planning using the increased disposable income made possible by better financial habits, Gies said.
“The best way to create this cohesive strategy that starts at the beginning and takes you all the way through retirement planning at the end is rolling all of these pieces into the benefit package for incoming employees,” he said.
Start By Adding Quick Access To Pay
But Gies added that any financial wellness tools companies add to employees’ payroll dashboards are only useful if workers actually engage with them.
He said early pay access to earned wages plays an important role in that. After all, any worker who’s ever sweated out his or her next payday with an empty bank account knows that the ability to receive pay for work they’ve already done is “a strategy that really resonates with employees,” Gies said.
In fact, he said, that resonates with workers across the board — regardless of job type, demographic profile or age group. Gies said giving employees the choice of exactly when they can draw wages vs. waiting for the next payday is a hit with almost every worker.
He added that early pay access also drives engagement with financial wellness tools. “If you’re really looking to draw people in, things like the ability to get paid early or access their pay early may be critical,” Gies said.
So is giving employees the ability to send their pay wherever they want to, including platforms like Venmo, Apple Pay and Google Pay. “If you want to drive adoption and create excitement, it’s by building those types of pieces that really resonate with a broad swath of employees,” Gies said.
Financial Wellness Tools Help Attract Good Workers
That kind of resonance is going to be increasingly critical as firms look to staff up post-COVID-19.
Gies said ADP surveys have found employees increasingly want to work for companies that show they care about employees’ financial wellness.
He said companies must understand “that every employee, no matter what position they have with the organization, has a level of worry about their finances.”
Then, he said, firms must ask themselves: “How can I put in flexible strategies that can help any individual despite their income level [or] age … to alleviate the stress? How can I help them reduce their debt? How can I help them save more? How can I help them keep more of their paycheck on a week-to-week, month-to-month basis?”
“When the focus is on those things, it gets a lot simpler to start seeing what financial wellness components [companies] need to start building into their benefits package,” Gies said.