June 12, 2019
Dani is the Managing Editor, Content Marketing at Ceridian.
Findings from a new Ceridian report reveal that when it comes to pay, HR leaders have an opportunity to re-think their employee experience to better meet the needs of their people.
The inaugural Pay Experience Report explores how North American workers feel about their employers’ pay practices, and how those practices impact their lives at work and at home.
The report outlines findings from a survey conducted by Hanover Research of 1,891 workers – part-time, full-time, and contract/freelance – in the U.S. and Canada.
The research revealed that 80% of North American workers are at least slightly stressed about pay and money issues on a regular basis. With workers carrying personal financial stress into the workplace, employers have an opportunity – and perhaps a responsibility – to respond by doing more around financial wellness.
Here are more findings from the report, and what they could mean for employers.
The report notes that an employee’s personal financial circumstances will naturally color their pay experience. For example, if workers struggle to make ends meet, payday is likely a greater source of anxiety.
The report findings aren’t surprising. Financial stress and anxiety is impacting employees, and this can translate to higher costs for employers. For example, research has shown that highly stressed employees have higher average health care costs than those with lower stress. That’s in addition to the cost of lost productivity, increased absenteeism, and lower employee engagement.
The Ceridian report also found that having full-time employment doesn’t necessarily ease financial stress. In fact, only 17% of full-time employees reported that they had no stress when it comes to finances, compared to 22% of part-time employees, and 24% of contract workers.
However, while the financially stressed-out state of workers – and its impact on businesses – is clear, employers aren’t necessarily addressing it.
According to Ceridian’s research, when asked if they think their employer cares about their financial well-being, 27% of employees responded “no,” while 35% responded “a little.” Only 24% of employees responded “yes, very much” (The remainder said they didn’t know).
This highlights an opportunity for companies to take a closer look at their programs to help protect both employee engagement and their organization’s bottom line.
Companies should help employees focus on work, not on finances, by reducing that stress and creating a culture where people don’t feel overwhelmed, particularly in a world where the lines between work and life often blur and overlap.
To support better business outcomes, leading companies are increasingly prioritizing their employees’ financial and mental wellness, and are seeking solutions, such as new programs and technologies, that will enable their people to be productive, engaged, and satisfied at work.
Educate your people
According to SHRM, some organizations are ramping up their financial wellness benefits offerings, and the options will differ depending on how organizations define “financial wellness.” For example, some companies are making their advisory programs more personalized, to offer guidance for different employee demographic groups (e.g. helping younger workers start saving earlier for retirement).
In Ceridian’s Pay Experience Report, Chief People and Culture Officer Lisa Sterling emphasizes the importance of explaining the value of your organization’s programs that contribute to financial wellness. “Think about how much effort we as HR professionals put into building and evaluating benefits programs,” she says. “We should spend more time and energy on providing education on why they are important, so people actually take advantage of them.”
Rethink traditional pay models
Companies are increasingly re-thinking their pay experience and how it addresses the needs of the modern workforce. According to Ceridian’s survey, two-thirds of full-time and part-time employees are currently paid every two weeks, with another 20% paid weekly.
However, when asked how often they would like to be paid, 40% would prefer to be paid weekly, which signals a desire for more frequent, regular access to their earned wages. Contractors and freelancers also trend towards more frequent payouts: 13% said they are paid weekly now, however 22% would prefer this type of pay cycle.
Additionally, the survey revealed that there’s a growing interest in on-demand pay (being able to request a payout based on earnings at any time through the pay cycle). Although awareness of this type of approach is still growing, survey respondents expressed a significant amount of interest, especially the younger demographic. In fact, 56% of 18- to 24-year-olds said they would be likely to participate in an on-demand pay program, and 45% of those aged 25-to-34 years responded this way: Driving this interest is a desire to help with unexpected expenses, reduce the stress of living paycheck-to-paycheck, and have more control over when they get access to their money.
These findings align with what we know about the modern workforce – they expect flexibility from their employers, and seek a strong culture that supports work-life blending. This is particularly true for younger demographics, given their comfort level with digital innovation, the growing use of apps, social media, and technology that offer immediate gratification.
Some organizations are addressing employees’ desire to be more in control of their finances by looking to technology, for example, to explore these more flexible payment options.
Taking these steps will not only help attract and retain talent in a competitive market, but it can also help improve a company’s brand reputation as one that prioritizes employee wellness.