The coronavirus pandemic seems to have flipped the world upside down, and employee benefits strategies need to flip with it.
Every Starbucks worker gets Spotify Premium for free.
If you work at In-N-Out Burger you get a burger and order of fries, on the house, every single shift (along with industry-leading pay). Walmart offers its employees access to a college education for just $1 a day, subsidizing the cost of tuition, books, fees and all the other incidentals.
In a world where competition for talent is high, employee benefits can help to elevate your organization above its competitors as an employer of choice. But while free access to music is tempting, things have changed since the start of COVID-19. The pandemic seems to have flipped the world upside down, and employee benefits strategies need to flip with it.
Real time pay: the next employee benefit revolution
According to Career Builder, 78% of the American workforce lives paycheck to paycheck. A 2018 report by the Federal Reserve found that 40% of Americans would have to borrow or sell something to pay for a $400 emergency expense. The entire payday loans industry is built around the existence of this unfortunate (and unfortunately large) demographic.
Financially stressed workers also aren’t great for business. A study of 10,000 workers by Salary Finance found that employees who are worried about money are:
5.8x more likely to miss deadlines
2.2x more likely to seek employment elsewhere
3.4x more likely to experience anxiety
4x more likely to suffer from depression
4.9x more likely to produce lower quality work
But one innovative benefit can help to alleviate these issues, while also transforming businesses into employers of choice: real time pay.
Instead of waiting until the middle of next week to be paid for last week’s work, hourly employees are sent their days’ pay as soon as they clock out. This can make a huge difference to anyone stuck in the limbo of living paycheck to paycheck; instead of pushing back bills, dodging creditors, incurring late fees and living on ramen, you can pay for things when you need to.
Workers on sites like Fiverr and Upwork have had instant access to their earnings for years. Uber has been using real time pay since 2016—contractors can cash out up to five times a day, and the financial freedom that this system grants has helped Uber become an employer of choice. Today this technology is available to pretty much any business, and employers are finding they’re seeing just as many benefits as their employees.
Attract workers, help workers, retain workers
By providing your employees with an opportunity to instantly receive and spend their earnings, it shows that your company truly values its people. During and after Covid-19, real time pay allows hourly workers to avoid payday loan traps, as well as pay off overdue bills and debts quicker.
This isn’t a one way transaction; your organization gets quite a bit in return for its generosity. You can expect a 20% reduction in employee turnover, twice the number of job applicants, and a surge of motivation within 85% of your team members. Compelling numbers.
In a post coronavirus world, no amount of free burgers, music streaming or even college subsidies will match the benefits offered by real time pay. It’s time for companies to adjust and move ahead.
Erich Nussbaumer is Chief Product Officer of Clair.
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