With a recession, salary cuts, and job instability, many employees have reported experiencing financial insecurity amidst the pandemic. A global study by Gallup found that about half of workers received less money than usual from their employers during the crisis. Another half (49%) of workers have clocked in fewer hours at their jobs, which can drastically impact their monthly paychecks.
What’s worse, 53% of workers said they were forced to temporarily stop working altogether. Unsurprisingly, this has led to raised anxieties and daily feelings of worry. Gallup found that it was common for about two in five employees to feel worried during their workday. Meanwhile, 43% of employees experienced daily stressors. With their livelihoods up in the air, employees want greater command over their finances. Research from Visa indicates that 95% of employees want some form of early access to their salary to gain greater financial flexibility and control.
How can HR help?
As the pandemic wears on, can HR leaders help alleviate some of that daily financial worry or stress? Scott Thomson, group managing director at Links International is seeing leading HR teams make an impact by implementing new flexible pay tech solutions to support employees’ financial wellness. From experience and discussions with HR leaders, many have found that providing support to employees in this critical area of financial well-being strengthens their strategies around employee engagement and retention.
“With employees under more financial pressure due to a recession, HR has new opportunities in providing financial wellness as a new form of employee benefit, extending their role into helping employees manage their financial well-being and also having a unique offering in their company’s employee value proposition,” said Thomson.
Links International specializes in delivering HR outsourcing services across Asia and has over 20 years of experience in the region. From their research, they’ve found that offering financial wellness as a benefit helps improve morale as well as overall health and well-being and therefore leads to better job satisfaction and performance.
Ways to offer financial wellness in your EVP
The recession poses both a unique challenge and opportunity for HR leaders. More HR teams are leveraging tools like ‘on-demand pay’ and ‘early wage access’, which are easy and cost-effective to implement, to make financial wellness a part of their employee value proposition.
On-demand pay allows employees to access their earned salary at any time of the month, so they don’t have to wait until the end of the month to be paid. This gives employees greater flexibility to manage their finances better when unexpected costs and events arise and avoid high-interest, short-term loans. Such benefits have made waves in markets like the US, with research showing that a whopping 79% of employees would change jobs just to get access to it.
Companies that have large amounts of frontline workers in Asia are seeing the strongest business case and uptake for on-demand pay, said Thomson. The crisis has hit companies unevenly and employees working in industries such as retail, manufacturing, and logistics have been especially struggling. “With the pandemic introducing new strain to the already challenging work environment, many frontline workers are leaving to join companies that have a ‘frontline first’ culture and offer greater flexibility and better benefits to their frontline staff,” said Thomson. “We’re seeing a growing awareness of the need in Asia for financial support to help workers avoid predatory lenders and high-interest loans as they struggle to make ends meet”.