It has become an open secret that workers in a range of industries now live paycheck to paycheck. In addition to the stress this puts on their home life, a recent survey by PwC revealed it can have a measurable negative impact on their productivity and a company’s ability to retain employees.
Properly equipped Payroll Service Bureaus (PSBs) and other HRO providers can help. A full-featured HCM in association with an Earned Wage Access program can let workers tap their earnings when they need them. This can make a huge difference in relieving financial stress and even improving workers’ physical well-being.
But few employers are aware of such programs, and fewer still may be equipped to implement them. The HROs who can and do bring those employers these solutions can make those clients heroes to their employees and provide some additional support to clients’ bottom line.
Workers’ Financial Crunch
It may surprise many that 28% of full-time employees often or always run out of money between paychecks, according to the PwC study cited above. Even more surprisingly, 15% of those who earn $100,000 or more per year frequently run out of money between paychecks.
Not surprisingly, relatively unskilled workers are more likely to face this situation. As a result, fully half of the stressed workers feel demotivated in their job. This can easily turn into a bottom line and even a customer loyalty issue if those employees are involved in customer service.
For higher earners, the impact can come in the form of staff turnover. Nearly half of financially stressed workers feel they have no future with their employer. If and when they leave, they take their skills and institutional knowledge with them. And every HR professional knows how expensive that can be.
Earned Wage Access
Earned Wage Access is an employee benefit that allows workers to tap their earned wages between paychecks. These programs tend to use a form of debit card that works like one issued by a bank. A small transaction fee is involved. But it’s a small price to pay for the stress relief it provides employees.
Such programs also require a tight integration with the payroll system and, in most cases, integrated time tracking. For this reason, companies using a full-featured HCM are the best candidates for adoption. PrismHR’s HCM is a prime example of this capability.
PrismHR’s HCM is designed to support PSBs and HROs, which is good news for their clients and those clients’ employees. Since HROs share in the resulting revenue, they are motivated to pass information about these programs on to clients and connect them with program vendors Otherwise, employers may never be aware such benefits are available, and neither would their employees.
Giving Clients Credit
The big payout isn’t in the HRO’s share of the transaction fee; that’s negligible. There’s much more to be earned from delivering the advanced time tracking capabilities and increased payroll processing efficiencies that come with a platform like PrismHR’s HCM.
But those capabilities more than pay for themselves on their own merits, with reduced operating costs and virtually error-free payroll runs. The biggest ROI may actually be in the client loyalty it engenders, and the employee appreciation clients are sure to feel.
If you don’t currently offer an HCM – or are looking at upgrading to a modern platform that can drive more revenue while securing more loyal clients — visit prismhr.com/software/hcm to learn about PrismHR’s HCM and what it can do for your business.
