Editor’s Note: How to Boost Financial Wellbeing in the Workplace is a guest article written by the GetPaid team.
Are your employees requesting advances from the company? Or are they refraining from asking because they know that it will be rejected?
Firstly, let me be clear to say that a company shouldn’t provide advances if possible. It places a strain on the company from a cash flow as well as an administrative point of view. Furthermore, it distracts you from your main job (debt collection wasn’t on the job description!)
However, that does not change the fact that employees have financial needs and them turning to employers for assistance is an engagement point that you could be using to the company’s advantage.
What if I told you that our flagship product called earned wage access (EWA) can help you reject requests for advances without hurting morale, while at the same time increasing retention and productivity? Read on!
What is earned wage access (EWA)?
EWA provides employees access to wages that they have earned but not yet received. As it is not a loan, there are no interest or late fees! GetPaid only charges a flat one-time transaction fee. Requested funds are processed instantly and sent directly to your staff.
EWA enables employees to better align income with expenses and repayments. Even if employees do not use it and serves as a safety net providing employees peace of mind in the face of any unforeseen expenses.
“My dad left us with a huge debt. I was unable to make repayments on time. My employer did not provide advances so I used GetPaid to align my pay with my repayments and escape hefty late fees and get out of debt faster.”
Anne, Admin executive
|What is the difference?
|Access to salaries that is already earned
|Providing salaries that is not yet earned
|A credit loan based on income levels
|3-4% per transaction
|Cost of cash flow and administration on the company. Risk of default and non-collection
|Admin fees, base interest rates and late fees will amount to 20-30% per month
|Employers need to sign up before employees can access the benefit..
|Affects company culture. High default rate. Adds strain on cash flow and admin
|Proof of income. A guarantor. Clear credit score. A minimum lending amount.
How it works
GetPaid will front the money to the employees on-demand and later, it would be reimbursed by employers at the end of the pay cycle. Employers provide their employees with immediate access to their wages through GetPaid who partners with Talenox. Employers are able to pick how much access they want their employees to receive.This percentage can be based on gross (pre-tax) or net (after-tax) pay, also customisable by the employer. Employees can track their pay daily with this integration, thus accessing their earned wages anytime.
What’s in it for the employer?
Reduce hiring costs & promote productivity
Reduce turnover costs by using EWA to address employees’ financial stress, maximizing retention and productivity.
Avoid requests for advances without hurting morale
Employees will be able to finance any unexpected expenses themselves and do not need to lose dignity or incur stigma by requesting an advance from his or her employer.
Reduce HR costs
Minimize the time spent on advance requests and other financial related issues such as financial disputes between colleagues.
Positive work culture
Employees’ stress will be relieved by knowing that they can access a part of their income if they need it. As a result, the work environment becomes more inclusive, joyful and optimistic.
Bolster employer’s brand
Be a progressive employer in your industry by offering what your competitors are not. EWA and on-demand payroll can be a low-cost way to attract and retain employees and generate goodwill among the existing workforce, bolstering the employer’s brand image.
EARNED WAGES ACCESS AMONGST MILLENNIALS IN SINGAPORE by GetPaid and SP Jain Global Management school.
At this point, you might be thinking: “Why can’t my employees just save more and manage their finances better?”
If this is you, please do read on!
What is financial wellness in the workplace?
Firstly, let’s get the definitions sorted out. Financial wellbeing refers to a person’s overall financial health and the absence of money-related stress.
But what is financial wellbeing in the workplace? It is the collective amount of financial stress of employees within an organisation.
Why does financial wellbeing matter to businesses?
The PwC 2022 Employee Financial Wellness survey indicates that the impact of financial stress can run deep and has a significant impact on the organization’s culture and ultimately, business success.
So what is the state of employee financial wellness in Singapore?
According to a Standard Chartered report, six out of ten Singapore millennials are finding it more difficult to manage their money since the start of the Covid-19 outbreak with 27% of Singapore millennials reporting that their borrowing had increased in the pandemic.
Singstat data is consistent with this survey, showing that household liabilities (inclusive of credit card bills and personal loans) have increased 5% and 6.2% since 2019.
GetPaid dove even deeper by surveying over 200 millennials in Singapore. 75% of respondents said that they were unable to pay for a bill or expense at least once in the last 12 months. Of which, 7.6% had to approach a money lender to finance the bill and 41.5% ignored the expense (resulting in late fees).
Why don’t they save?
1. Covid-19 decimated savings
DBS surveyed that the adverse effect of covid has left low wage professionals with fewer than 3 months’ worth of emergency funds saved, from which 22 percent had less than a month’s worth amount saved.
Similarly OCBC conducted a survey among 2000 employees in Singapore and found that 54%
of the employees surveyed feel stressed about their finances with 38% having less than $1,000 saved.
2. Inflation and higher standard of living is making it harder to save
A study conducted by the Lee Kuan Yew Foundation found that a family of four, with parents, a pre-teen and a teenager, needs at least $6,426 a month to afford a basic standard of living in Singapore. This means that a substantial and concerning proportion of working households in Singapore – about 30 per cent – do not earn enough to meet these needs.
A lack of viable financial solutions in Singapore
The credit scoring for a Singapore worker to qualify for a credit card makes it difficult with the employee needing to earn SGD 30,000 per annum.
So where can such an employee go if they need cash they do not have? Unfortunately, over a million such workers in Singapore will resort to borrowing from friends and family, borrowing from money lenders or seeking an advance from their employer. All of which have undesirable effects which will lead to further strain on their financial wellbeing.
As you can see, the financial wellbeing of employees is deteriorating across Singapore and their employers are best placed to address this.
However, this issue is not exclusive to Singapore employees. That is why, the earned wage access (EWA) movement is growing rapidly across the globe with over 15 million workers who now have access to their earned wages with the likes of McDonald’s, Taco Bell and Walmart offering EWA to their employees.
EWA is disrupting payday lending
EWA is tackling payday lending’s most serious problem: price, by providing a flexible pay system to employees. This allows employees to draw down their earned wages ahead of time to meet any expense without the risk of late fees and additional charges. Allowing this flexibility to employees would reduce the need to borrow elsewhere especially from lenders with high interest rates / late fees.
Talenox x GetPaid Integration
Talenox has recognised the importance of financial wellbeing in the workplace and has partnered with GetPaid to add value to its users in Singapore. This partnership integrates GetPaid’s offerings to Talenox’s payroll platform, which automatically feeds all transaction requests directly into your Talenox account, allowing for easy reconciliations. The Talenox-GetPaid integration essentially allows you to provide employees access to wages that they have earned but not yet received. This integration streamlines the payroll and EWA reconciliations while also managing and tracking transactions in one place.
The partnership is currently available for all of Talenox’s users in Singapore who will receive a 1-month trial. During this trial, your employees will be able to make EWA requests for free.
So, how do you gain Earned Waged Access (EWA) in GetPaid with your employees’ payroll information in Talenox? You can find out here.
- Log in to Talenox and click on the “Integrations” option under the “More” tab.
- Under Integrations, click on “GetPaid”.
- Click “Connect to GetPaid” and enter your credentials and select the correct entity to connect.
- Fill out the GetPaid application form. That’s it!
Start your workplace financial well-being today.
GetPaid is a workplace financial wellbeing platform operating in Singapore and Indonesia.
They partner with employers who see the need to improve financial wellbeing in their workplaces by giving their employees access to GetPaid’s flagship product called Earned Wage Access.
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