In today’s economic climate, giving your employees financial benefits that actually improve their lives is critical. Helping them get paid faster—and safer—is just the right thing to do. But as a business, you also need to keep an eye on your bottom line. The good news is that being strategic with the financial benefits you offer can also deliver a tangible ROI for your company. Read on to learn three benefits your hourly workers need that can actually save you money, too.
1. Instant Pay
Offering your employees Instant Pay (also called Earned Wage Access) lets them access some of their earned wages ahead of payday if needed. This service is free to both you and your employees, and helps them avoid predatory payday loans that can exacerbate their existing debt. If someone is living paycheck to paycheck (which 78% of the workforce is), an unexpected medical bill or car repair can cause them to overdraft and completely derail their finances. By offering your employees the option to use earned wage access in these situations, you assist them in the short term and also help them avoid fees and additional debt, which prepares them for improved long-term financial success.
Your ROI: Reduced turnover costs
It’s no surprise that when employees have less financial stress, they’re more productive and engaged at work. But most importantly, they’re less likely to look for a new job. In fact, in a recent study, 60% of workers said they’d be more likely to stay at a job if their employer offered financial benefits that helped their day-today lives.
Reducing turnover—and the cost that come with it—is a huge way to save your company money. On average, it costs 33% of an employees’ annual salary to replace them. For a conservative estimate, if someone makes $10 an hour and works 40 hours a week with two weeks off during the year, that’s 20,000. 33% of that would be 6,600. You’re spending close to 7,000 dollars each time one employee quits.
Offering your employees access to earned wages and similar short-term financial benefits can dramatically reduce turnover costs while keeping your employees engaged, productive, and happy.
2. Direct deposit of wages, tips, and reimbursements
Many hourly workers rely on cash to make purchases and are still getting paid via paper checks they then have to cash out. They crave the ease of direct deposit so they can get paid faster, but they don’t want to deal with the fees or potential intimidation of a traditional bank. The same need applies to tips. Employees don't want to have to wait until there's the right amount of change in the register to be tipped out. Plus, with the world switching to contactless payments, cash doesn't make sense for you or your employees.
To address these needs, your company can actually help bridge the gap between your underbanked employees and the need for digital deposits by offering them access to their own digital wallet. This allows them to have their wages directly deposited into a fee-free checking account—and tips and mileage reimbursements can also be sent to their account after each shift, too. They now have the ease of faster, digital payments.
Your ROI: Elimination of paper checks
You save time and money when you switch to digital direct deposit for your employees. Because you no longer need to cut paper checks, you automatically save money. (On average, you spend $7 per paper check). And you also save time that would be spent printing and distributing those checks, or going to the bank in order to get the right amount of change to tip out your employees.
3. Debit Cards
In addition to not having direct deposit, many hourly workers are also without a basic debit card to make purchases. They feel they can’t access debit cards from traditional banks, because they come with overdraft fees and minimum balance requirements that can be hard for them to meet. In order to address this concern, it may be tempting to offer your employees paycards, but there’s often a catch involved: most paycards are not free. They tend to come with hidden fees and set-up costs which add up over time, exacerbating the cycle of debt for hourly workers.
By setting your employees up with a paycard alternative like a Branch Card, you give them a card that has no overdraft fees, no ATM fees, and no minimum balance requirements. You empower them with a checking account and debit card they can take with them for life—and they can get set up as soon as they start on the job.
Your ROI: Avoids the hassle of paycards
Offering your employees a fee-free checking account and debit card eliminates the need for paycards and helps underbanked employees start their journey to better financial stability. It’s a way to empower your employees and set them up for better financial wellness. But for your business, you also save hours that would otherwise be spent managing and issuing traditional paycards. Instead of having to handle the paycards and address any issues with them (essentially acting as "support" for the paycards,) you empower your employees with their own card they can manage themselves—and start using their first day on the job.
Providing financial benefits that actually improve your employees’ lives doesn’t have to come at a cost to your bottom line. Branch is a solution that partners directly with you to bring your employees fee-free financial services that help them find more financial stability—and help your business continue to thrive.
Learn more about how Branch can help your business.