Emergency Cash and a Fresh Look at Financial Wellness

For 52% of your workforce, an unexpected emergency costing $400 would throw off their whole financial month. They’d be unable to pay all their bills. They might turn to risky options like payday loans. And they’d feel stressed – really stressed.

In fact, personal finances are the #1 stressor in most employees’ lives. Constantly nagging at their minds, the stress bleeds over into their job performance. Half of them say it affects their work and reduces their productivity.

Good Intentions, Poor Results

Unfortunately, most mass-market programs intended to help people manage their finances ultimately fail. These programs often boil down to “spend less and save more,” which simply doesn’t work. They already feel too far behind.

Other advanced financial management programs focus on wealth management, which zones in on things like retirement, investments, and charitable donations. But for 57% of Americans, wealth management seems like an absurd idea. They have less than $1,000 in savings. There’s no wealth to manage.

The Walmart Model

Hearing woes like these from their employees, Walmart decided to try something new. As one of the nation’s largest employers, Walmart has a massive impact on both the U.S. economy and employment trends. The company also faces intense scrutiny from the public and regulators.

What Walmart saw among their workers was desperation, depression, and high-risk behavior in financial management. When money emergencies arose, employees were resorting to last-ditch efforts like high-risk cash advances, high-interest loans, and borrowing money from other cash-strapped relatives.

In response, Walmart partnered with PayActiv, an innovative early-distribution pay program. Eight times a year, with no financial penalty, Walmart employees can now take a portion of their paychecks early. When unforeseen expenses arise, they have an option that doesn’t drive them deeper into debt.

The results have been encouraging. Walmart employees are enthusiastic about the program, and management is seeing positive outcomes. As the company’s chief people officer, Jacqui Canney, explained:

“We’re investing to give our people financial tools that help provide more stability in their lives, which we believe will empower them to be all they can be when they are at work serving our customers.”

How Does a Program Like PayActiv Work?

PayActiv isn’t just for employers the size of Walmart, and it’s not just about getting money early. It’s a holistic financial wellness program that frames money issues as a total wellness issue. It supports employees on multiple levels, including personally and emotionally.

In includes helpful tools like bill payment, prescription discounts, and ongoing financial counseling. Employees can do self-assessments that help them understand their total financial picture and set realistic goals. PayActiv even has an allocation and savings tool that can help people crawl out of a debt hole and move toward a more secure future.

Best of all, PayActiv is mobile-first, meaning it works right from an employee’s cell phone. Its interface is easy-to-use and intuitive, designed like the world’s most highly-rated apps.

In day-to-day employee life, PayActiv offers real results. So far, the program has an 80% adoption rate, 98% employee satisfaction level, and saves the average employee $1,200 a year. Those are huge numbers for an issue that once felt hopeless for most workers.

Employer Social Responsibility

Programs like PayActiv usher in a new era where employers are held accountable for their workers’ financial situations and overall health. Instead of shying away from this role, employers should embrace it.

A whopping 76% of millennials say they choose among employers based on levels of social responsibility, and 75% would take a pay cut to work for a more ethical company. Nearly two-thirds would reject a job offer from a company purely because it didn’t have a strong policy for corporate social responsibility.

Younger workers are paying close attention to this issue, and employers that fail to address it will likely regret it in the future. At stake is the long-term loyalty of their workforce.

High turnover could become the next big crisis for companies without a commitment to holistic employee wellness. After all, 83% of millennials say they will only stay loyal to companies that address social issues – and millennials will soon make up fully 50% of the workforce.

If you are ready to invest in the best financial wellness programs for your employees, please take a moment to learn more about PayActiv or request a live demo. We’re here to help!