It's a new HR landscape in this post pandemic environment. Work culture, office life and the way a global workforce interacts is in a state of flux and change. We can all expect a significant amount of regulatory change and labor laws to be updated over the coming months and years as the business environment gets used to this new hybrid and remote working normal.
What has become very clear since the pandemic began is the importance of the employee experience and in particular a focus on employee well-being. Well-being used to focus on mental health and encouragement of physical activity so that employees around the world could manage their stress levels during the pandemic.
But now, even that narrative is shifting towards a broader definition of well-being and financial wellness has come into play here, specifically in the area of earned wage access. In this article we'll look into the area of well-being in the employee experience and examine the implications of earned wage access.
Things are changing
A global pandemic came along and radically changed how we work and interact with each other; the future of the office remains uncertain and all we can really be sure of is that we are not going back to the way things were. Hybrid working, remote working, remote hiring and onboarding are now commonplace at multinational companies around the world. Video conferencing has pretty much become the number one communication tool and new digital tools that focus on video communication and collaboration are starting to crop up.
When times change due to a dramatic world incident, it often causes other forms of change to creep in too, where previously these changes may have been talked about as being for the future are just whispered cautiously about, now these are things that people are having open conversations about.
Earned wage access is one of these things, this is simply the ability for global employees to access their wages or salary as they earn them as opposed to waiting for a fixed pay period, or the traditional end of month payday. Employee power is on the rise, and they are in a much stronger position now to make demands of global employers, the narrative they are going with is along the lines of “if we have earned this money by carrying out our employment duties, why should we have to wait another three weeks to receive it”, it is a fair and valid point.
Some companies are being responsive while others are being really proactive and trying to get ahead of the curve, they can see the value in it, and they can also leverage it as a potential recruitment tool. This could be looked upon as a perk that they offer while the rest of the world catches up. It is starting to be a part of job advertisements, if employees know that they can access their wages much quicker than the traditional end of month payday, it could be something that separates a company from the competition and makes them more attractive for new employees. Times are certainly changing, and it will be very interesting to see how this one plays out over the coming months and years.
Financial well-being
Understandably, global employers may be a little bit wary of this as the implications are huge. Major technology resources will be required and there will be a likely restructuring to the way in which they deliver and manage global payroll across all of their countries.
From a human resources perspective, though it falls firmly under the umbrella of financial well-being, this is something that came to light in the pandemic. At a time of great struggle, when unfortunately, a lot of people lost their jobs, finances became tight and inability to manage financial obligations was a major concern for a lot of people. Thus, financial health and the ability to take more control over your finances is viewed by HR leaders as an important consideration in the employee experience. Earned wage access has a strong role to play in any financial well-being initiatives that organizations may choose to implement.
An example could be the ability to pay off loans or credit card debt in a quicker way due to accessing your wages or salary earlier in the month, reducing any financial stress that an employee may be facing. It could also help with budgeting and simple things like daily shopping and utility bills. It could lead to a measured and careful restructure of how people manage their finances on a monthly basis. As of right now, a lot of people still wait to pay off their major bills in the same week as they receive their paycheck or salary, but this no longer chimes with the new digital world we live in, the world of on demand access to information, data, and media.
Financial well-being might be the bigger priority for a specific set of employees and earned wage access could make all the difference. It is an interesting space for HR professionals to educate themselves on and keep pace with the latest developments as it could turn out to be very significant in the near future.
Fintech implications
Unsurprisingly, earned wage access is something that is of major interest to fintech and financial services company who have developed innovative digital technology. This could be a space that they are very keen to move into, from their perspective they have the digital platforms and innovative digital tools that enable the swift movement of money into bank accounts around the world.
The fintech implications here are enormous, they would want to partner up with multinational companies, connect to their payroll and HR software and offer their fintech services to help global companies make earned wage access and financial well-being a key part of their offering to a globally dispersed workforce.
Fintech is looking closely at human resources and payroll, to see how their products and services can fit in the post-pandemic digital economy. Their view is that there will be a lot of alignment and synergy between what they can offer and what these departments are looking to introduce in the financial well-being space for their global employees. It will be fascinating to see how all of this plays out, some companies will respond quickly while others will take a wait and see approach. Many others will take the view that they simply don't have the technology infrastructure or desire for the associated administrative burden that could come with all of this. Time will tell.
The pandemic really emphasized the importance of the employee experience, and a way to enhance this experience could be to focus on employee financial wellness. Implementing an earned wage access initiative could make them seem more attractive for job seekers, help with employee retention, as well as provide opportunities to leverage innovative fintech applications.
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