The hidden productivity killer (Ceridian) Microsoft Azure technology: taking payroll to new heights (Moorepay) The hidden productivity killer: why companies should support employee financial wellness
company balance sheets in wages that workers have earned, but not yet been paid. As interest rates rise, the opportunity cost of that balance gets even higher. Whether it is putting money away into a high-yielding savings account or using funds to pay down credit card debt with rates that have floated up, freeing up this capital provides meaningful options and flexibility to workers as they manage their pocketbooks. We also know that millions of Brits — across all income levels — live pay cheque to pay cheque. This means that if workers are faced with an unexpected expense like a car accident or a vet bill, they risk a negative debt spiral that can happen if they turn to pay day lenders or credit cards. On-demand pay goes by many names — early wage access, earned wage access, daily pay benefit, instant pay — but essentially refers to the ability for an employee to access the money they have already earned prior to their scheduled payday. It’s not a loan, but rather an advance payment on funds that are forthcoming in their pay cheque. With on-demand pay, workers have a safety net to protect themselves from these high-interest options by having instant access to their pay cheque. Instead of waiting for pay day, workers can get paid with just a tap on their mobile devices. Financial wellness tools like budgeting, banking and investing apps are easier to access than ever, thanks to mobile technology. Now, companies can add early wage access to the toolkit, and empower workers to have holistic financial wellness in the palms of their hands. Simply put, providing these tools to employees is the right thing to do for workers and their employers. For a long time, standard benefits like paid time off could safely offer a certain level of employee satisfaction, but times have changed. Leading companies acknowledge that engaged and motivated employees are key to their success. As we plan ahead, look for more companies to expand their offerings as they seek to maintain and improve employee productivity and well-being.
By Brian Sparling ChMCIPPdip Director managed operations (EMEA), Ceridian Europe Ltd
An overwhelming number of UK employees are feeling the weight of the cost-of-living crisis. A new national study conducted by The Harris Poll, on behalf of Ceridian, revealed more than half of UK employees (53%) say managing their personal finances has become more difficult over the past 12 months. The issue is bleaker for those between the ages of 18-34 (61%), who say that an unexpected expense of less than £500 would prevent them from being able to pay their other financial obligations, such as housing, insurance, childcare or utilities. This burden of making ends meet has a well-documented negative effect on mental and emotional well-being; one which both directly and indirectly impacts employees’ working lives and employers’ bottom lines. Stress and poor mental health can affect work performance and employee engagement, lead to periods of absence, sick leave and eventually reduce employee retention. In today’s challenging times, offering ‘just the basics’ in employee benefits programs, like health insurance and retirement accounts will no longer cut it for many workers in the job market. If that’s the case, what can employers do to attract and retain the highest calibre workers? The answer is to really understand what people want and to prioritise helping them achieve their goals. Companies that embrace a holistic approach to financial wellness will come out on top. Many Brits are struggling financially, and this stress is negatively impacting their well- being and work productivity. According to the 2021 UK Working Lives Survey conducted by the Chartered Institute of Personnel and Development (CIPD), a human resource association based in London, 47% of UK workers experienced financial difficulties to some extent, and 16% were constantly struggling or falling behind with bills. This should raise a major concern for any employer. Stressed and distracted employees are
often less productive at work. CIPD referenced a correlation between financial stress and productivity, in their recent Financial well-being: an evidence review summary report. The study found over 33% of UK employees with dwindling productivity were also experiencing financial stress. As we navigate out of the pandemic, employers are faced with an opportunity to rethink their employee benefits packages and make sure they address workers’ pain points. Financial wellness fosters employee loyalty While recession fears rise and layoffs occur across industries, the job market remains tight as it recovers from the Great Resignation. More than ever, adequate compensation and benefits matter deeply, and workers are calling out for more personalised benefits. According to Ceridian’s recent survey, 75% of UK employees, ages of 18-44, would consider working for an employer that provides free early access to their earned wages on demand over an employer that does not. Employers failing to demonstrate a commitment to their employees’ financial wellness are missing a critical opportunity to drive engagement, retention and bolster their brand as an employer. The signs are clear. Employees want to see more modern benefits geared towards their financial wellness goals, and employers who provide those benefits will better attract and retain talent. Empower employees with increased flexibility and choice Financial wellness isn’t just about providing education and budgeting advice. It’s about providing practical tools that empower people to take control of their financial lives. Future-focussed companies have adopted on-demand pay, which allows workers to claim their earned wages on any given day. Recent research shows that there is over £1 trillion on
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