Editor’s Note: How to Improve Your Team’s Productivity with Zero Effort is a guest article written by the Payd team.
The mental and physical health of employees has been the focus over the last year, but what about their financial well-being?
In a recent survey, 70% of employees reported that their jobs were adversely affected by COVID. Unfortunately, whilst this is not a one-off issue it has taken this dramatic event for employee financial health to come to the forefront of discussion.
How Financial Stress Affects Your Employees
Employers face a constant struggle to keep attrition rates low whilst maintaining or improving productivity. One of the reasons for poor performance and a high turnover rate among employees is financial stress.
In fact, 46% of Singaporeans say they do not have enough savings to last them 3 months. This means that when employees incur unexpected and impactful costs, they have few options. One such option which is becoming too popular is to borrow from a moneylender – whether legally or otherwise. Unfortunately, employees quickly become saddled with debt and their increased stress impacts their performance at work and your company’s bottom line.
Money Lending: A Danger for Employers Too
Employees struggling to keep up with bills and payments often feel there’s no one to turn to for help. Fear of exclusion and embarrassment of their situation leads them to desperate measures, making them the perfect victims for payday lenders. Employees attempting to get out of this debt cycle, begin pulling in not just friends and family, but colleagues too.
What began as a problem for a single employee, may quickly escalate into a problem not just for other employees, but for you and your management teams. Stress levels will rise and productivity will flounder, ultimately posing a risk to the business if left unchecked
Justin Kong and Darvesh Daswani, co-founders of Payd want to solve this issue. While working in the UK, they had seen how predatory money lending can be. They found a better solution for those who need access to money: Earned Wage Access. Thus, Payd was born—a service that lets employees get paid on demand and take control of their finances.
A Healthier Financial Choice That Employers Can Provide
An employee that needs a salary advance for an emergency will find a way to get access to that cash. By using Payd’s service, employees can now access their earned but yet to be paid salary early. With Payd’s service, employers can now provide earned wage access at no cost and importantly, zero effort.
What’s in it for employers?
Payd primarily caters to employees’ financial wellbeing, and we need employers to support our vision of financial inclusion. By engaging with us, you will experience:
1. Increased engagement in the workplace
In Southeast Asia, getting early access to earned but unpaid salary is almost unheard of. However, companies in the US and Europe that adopted earned wage access services have seen a 22% increase in productivity. This shows that employees engage more in the workplace when given financial flexibility.
2. Higher employee retention rate
An increase in employee engagement has another positive impact on productivity, in the form of increased employee satisfaction. Company perception and employee morale improve when an employer provides the Earned Wage Access service. This is seen in an increase in Net Promoter Score (NPS). When employees are happy working with you, they are likely to stay on longer as their needs are met. Indeed, employers who have allowed employees early access to their salaries have seen a 41% reduction in turnover rate.
3. Ease of tracking activities
Once live, Payd offers employers a bespoke interactive portal where the financial behaviours of employers can be seen. Statistics such as “average transaction amount” and “financial stress scores” also act as a proactive alert to employers.
Employers can then take proactive measures to facilitate their needs through early discussions while safeguarding the interest of the company by preventing employee underperformance.
4. A Turnkey Solution
By integrating seamlessly into your payroll system, we make it easy for you to track and reconcile the added payments. As such, we ensure you have a limited, or no additional administrative burden.
Benefits for employees
Unlike money lending, the Payd service allows employees to get their pay on-demand anytime without interest. There is no borrowing as employees are simply accessing what they have already earned. This means, they face no risk of falling into the debt cycle, whilst solving short-term money issues that may arise. As employees feel more financially secure, they are better able to focus on work, free from any distinctive financial worries. Other benefits employees get when using Payd app are:
1. Interest-free withdrawals
As Earned Wage Access is not a loan, we do not charge any interest or hidden fees. We charge a low, flat withdrawal fee that helps cover our infrastructure and support costs. We are also Sharia-compliant. The balance shown in the app is their available earnings, whether standard or overtime, minus any transfers and employer deductions.
Employees may withdraw their salary at any time without having to wait for payday. They can transfer up to 50% of their earned net income to their bank account via the Payd App. Employers are able to set limits on the percentage of their earned wages that can be taken before payday. Furthermore, employees also set their own withdrawal limits. This ensures that the system is being used responsibly, and employees are able to meet obligations such as CPF and tax.
3. Real-time tracking
Payd service users can also track their earnings including potential overtime pay. This makes it easier for employees to manage their finances and monitor their income in one app. They can also track their withdrawals and be more mindful of their spending.
4. Increased motivation and satisfaction
The flexibility to withdraw a portion of their earned salary early leads to increased employee happiness in the workplace. It’s reported that 70% of employees who have early access to their salaries have experienced improved financial wellness. The financial freedom also leads to an increase in productivity for the company.
Talenox: Payroll Doesn’t Have to be a Process
Submitting payroll shouldn’t have to be a time-consuming process, which is why we are teaming up with Talenox – a free online payroll system that allows you to seamlessly automate salary disbursements.
Talenox is a grade ‘A’ payroll system according to IRAS and prides itself on being customer-centric. The app’s simplicity ensures that it is a plug-and-play solution for anyone in the organization looking to automate payroll. Users have 24/7 access to the platform on desktop or mobile and can onboard a team in as little as a few minutes. The built-in calculation engine offers a variety of pay structures and contribution calculations such as CPF, SHG and SDL.
A new and significant addition is the customizable leave app that integrates to Google Calendar and scheduling apps such as Deputy. This allows you a synced and real time view of your team’s leave status. Crucially, Talenox is up to date with the latest Employment Act and labour law changes, so that you are too.
Users can subscribe for the service here.
How Does Payd App Work?
Payd allows employers to enjoy its service without having to deal with the stress of an added administrative burden. Employers can sign up here for a demo and one year’s free access to the platform.
You will need your employer to register with us. You can add their details here and we will reach out to them. Once your employer is registered, you can download and log in to the Payd app and begin using it instantly.
Once enrolled and logged in, employees will see their salary balance of the month on the homepage. After that, it’s up to them to withdraw their salary at any time.
Towards Financial Inclusion And Literacy For All
It’s high time that we improve the financial flexibility, resilience, and wellbeing of employees across Southeast Asia. It would not just benefit them but also you as an employer. With better management of their finances, they will be able to contribute and engage more in the workplace. It’s a win-win situation for all. To get started, visit the Payd website to book a demo.