Learn from potential users as they explore what financial freedom, on-demand pay, and Clair mean to them!
When you think of “financial freedom,” what comes to mind? Maybe moving to a beach community? Traveling the world? Buying your dream home?
Or, maybe financial freedom means no longer worrying about your bills, sending your kids to college, or having a savings cushion for life’s unexpected moments.
Whatever your definition, most people agree that financial freedom gives you flexibility and control over your finances. Recently, Clair asked some potential users what financial freedom and on-demand pay meant for them. Here are their answers:
According to Forbes, financial freedom means that you are “in control of your finances and your life choices,” which definitely has a nice ring to it. However, as we’ve seen from the examples above, financial freedom means different things to different people, depending on their stage of life and goals.
If you’re a young family, financial freedom may mean paying off your home and starting a college-savings account. If you’re in the sunset of your career, financial freedom may entail traveling and enjoying retirement without the worry that money will run out.
However, having both control and flexibility over your finances is seemingly out of reach for many hourly workers. A recent study showed that in 2019, 27% of hourly workers reported food insecurity (compared to 9% of salaried workers). Hourly workers were also more than twice as likely as salaried workers to struggle with paying their rent, mortgage, or utilities. And this was all before the pandemic, which caused millions of families to suffer economic hardships.
Between emergencies, insufficient savings, and “mismatches between income and expenses,” it’s not surprising that financial stress is so high, especially among hourly and lower-paid workers. In a 2020 global survey, EY found that 70% of workers in the U.S. and U.K. experienced financial stress regularly, and 50% of those stressed workers “have faced financial shortfalls between pay periods and encounter this issue approximately every four months.”
On the other hand, 80% of workers would like to access their pay as they earn it. Seems like there’s a disconnect, no? For the potential users we talked to, financial freedom meant accessing their pay as soon as they’ve earned it while being able to buy what they want – from experiences to paying a mortgage to buying food for their family.
So, where we may define financial freedom as having control and flexibility over your finances, the real question is, how do we get money into the hands of workers so financial independence can be achieved?
Many tools are available to help achieve financial freedom, such as increasing financial literacy, sticking to a budget, paying down debt, and creating an automatic savings plan. But what about on-demand pay?
What is on-demand pay? On-demand pay enables workers to receive their wages – as they’re earned – before the next scheduled payday. Depending on the on-demand pay service, employees can take home part of their wages, such as those earned during a shift, or they can access all of their earned pay – or even something in-between.
On-demand pay services are typically accessed and executed through the employer’s HCM or HRIS platforms. With cloud-based technology, on-demand pay providers can instantaneously calculate an employee’s earned wages (after taxes and other deductions), offering part or all of that amount to the employee. With Clair, those funds are then transferred to the employee’s Clair bank account and can be accessed with a debit card or transferred to another banking service.
The ease of on-demand pay can help bridge the financial gaps between paydays for millions of employees, reducing stress while giving employees more control over their monthly budget.
For many workers, like the ones we talked to, on-demand pay means getting paid instantly – or whenever they need it most.
When employees are stressed over money at work, they are often distracted and anxious, causing them to lose focus and productivity. For example, a 2021 study found that “65% of employees are stressed about their finances due to the pandemic, costing employers across the country a total of $4.7 billion per week in lost productivity (assuming 94,257,000 knowledge workers in the U.S. with an hourly wage of $35.53).” These staggering statistics make a good business case for on-demand pay.
There’s no question that on-demand pay solves numerous obstacles. By providing access to wages on-demand, workers can enjoy the flexibility to spend and save their money as they see fit and on their own schedule.
Additionally, by accessing earned money in real-time, workers can more quickly recover from life’s surprises – from a broken pipe to an unexpected emergency room trip. Our conversations with potential users highlighted how accessing on-demand pay can help them get ahead – without feeling bogged down.
But, there’s also an even bigger impact.
When workers have access to financial resources, it doesn’t just benefit them. It also benefits society as a whole. With access comes accelerated financial and economic growth as well as intensified labor demand and competition. Access to resources also decreases financial inequities, especially among hourly and lower-paid workers.
When we asked potential users to describe Clair, their responses were unanimous – it allows you to get paid immediately!
But Clair does more than that. Unlike other on-demand pay providers, Clair offers a full suite of banking services while providing free instant access to pay with Clair On-Demand Pay. And with 20% of Americans underbanked, having access to Clair’s banking services can prevent them from having to take out a payday loan to cover unexpected expenses.
Providing on-demand pay solutions is an employee-focused, future-focused approach, helping reduce employees' financial worries while providing a path to financial wellness and independence. If you want to learn more about how best to choose your on-demand payroll solution, contact Clair today for additional insights.