Employees often seek employers who can help them get ahead, and hourly employees are no different. Providing inclusive financial services in your business could be the first step in improving employee retention and performance.
While hourly rates and overtime pay prove decisive for most hourly workers, varying schedules and income stand in the way of their financial goals. Budgeting is difficult with pay variance, and more often than not, hourly employees grapple with economic hardship and debt, which can negatively impact their performance in the long run.
For employers, the hourly setup ensures that you don't pay for unnecessary time. Unfortunately, the best employees may not always be at your disposal round the clock. While traditional financial wellness benefits like 401(k) plans can help retain salaried employees, these programs hardly cater to the more immediate needs of hourly workers. The value of this unaddressed market calls for a shift in a company's benefit offerings.
What are hourly workers looking for today?
Hourly workers generally prefer to work for companies and businesses with growth opportunities. These opportunities could be anything from training to an encouraging manager and supportive team members. Hourly employees gravitate toward working environments with mentorship and teamwork. A flexible schedule for hourly workers helps empower employees and allow them to balance their work with their personal needs. Employers who make their workers' lives easier will likely retain the best employees.
Given these preferences, blanketed, generic benefits may not appeal to many employees. Health benefits and hourly rates alone won't work for hourly workers. Enter financial wellness. Financial wellness has become an integral component of any successful employer. Companies try to match employee needs with credible benefit offerings find themselves focusing on financial wellness.
What does financial wellness mean?
Financial wellness entails the ability to manage day-to-day finances, long-term milestones, as well as unexpected expenses. Financial wellness also extends to the flexibility that comes from adequate funds.
Unfortunately, most companies only offer financial planning services along with health savings accounts and a 401(k). These benefits are more likely to be adopted by the corporate workforce and executives of the company. But because many hourly workers have $0 saved for an emergency, hourly workers are less likely to be in the financial position to take advantage of those traditional benefits and often miss out.
Millennials, who form a large portion of hourly employees, are concerned about their finances in the here and now. Their monthly bills, electricity, water, rent, and so on, are immediate concerns. Because they’re still trying to build emergency savings, retirement benefits may not be a good financial wellness benefit to offer.
With the growing popularity of financial wellness programs, employers get an opportunity to address the financial concerns common among hourly workers. These programs call for a strategic plan with an emphasis on helping employees improve their financial behavior.
Rather than focusing entirely on employees' retirement plans, new financial wellness programs empower workers to manage their daily financial concerns. From financial goal-setting to consumer credit building and personal budgeting, such programs ensure that smaller emergencies don't throw employees off-balance.
What are the options?
Earned Wage Access (EWA), where employees can get instant access to their earned wages ahead of the two-week pay period, can be a powerful benefit. The traditional pay cycle is often a struggle for full-time employees, who know how much and when to expect their wages. But it’s an even greater issue for hourly workers, who have to deal with irregular earnings. EWA can help increase stability for employees and offer them a tool to better manage these fluctuations.
With this benefit, your employees have a better tool to meet their day-to-day needs and unexpected expenses. Such offerings reduce the risk of financial strains from fines late fees. EWA also ensures that predatory lenders can't take advantage of their financial difficulty.
That’s why companies in the retail and manufacturing space are embracing EWA in a bid to retain their employees. For a more comprehensive tool, Branch includes a budgeting module within their EWA plan. Users can keep track of their wages before and after the payday so that hourly workers can have better insight into and control over their finances to attain financial stability.
Benefits of Earned Wage Access
While financial wellness and inclusion matter for employees, employers enjoy considerable benefits from these offerings as well, including greater productivity.
Financially stable workers worry less about their finances and focus more of their energy on their work. The result is increased efficiency. Employees who struggle to make ends meet often transfer their frustrations to the workplace, ultimately hampering a company's productivity. Financial wellness also comes in handy for companies looking to boost engagement among their employers.
Decreased turnover. As an employer, you want to spend as little time as possible training new employees. Besides taking up a vast amount of your time and resources, employee turnover is also a costly affair. Employers pay well up to $2,500 to fill an hourly position. Training, lost productivity, on-boarding, screening, and interviewing all contribute to this incredible cost.
A consistent workforce will ultimately result in better customer experience and efficiency in service delivery. It also results in minimal shift disruptions. Financial inclusion plans go a long way in empowering your hourly employees. For one, workers should be able to find and pick suitable shifts providing a predictable working cycle. As the employees boost their wages, your business grows in the process. With a more consistent workforce, you’re also better able to anticipate and scale labor appropriately.
Why choose Branch?
Branch has been on a mission since Day 1 to improve the lives of working Americans. By offering earned wage access, instant tip or mileage payouts, and other free financial tools, we help your employees boost their financial wellness—and your retention and engagement in the process.
To learn more about what we can do for your specific industry and company, contact us at email@example.com.