Are your policies damaging financial wellbeing?

Financial wellbeing has moved up the agenda for employers and employees alike. Choosing the right support is critical. In this article, we look at three ways internal policies are impacting employees' financial wellbeing and what you can do to fix this. 

Shift allocation

When shifts are cancelled at short notice, do you offer compensation? Your employees may have upfront costs to pay in order to come to work for their shifts, leaving them out-of-pocket when things change last minute. Parents who have to organise childcare may be particularly affected, will end up out-of-pocket if their shifts are cancelled or changed at too short notice.

How early do you allocate shifts? With travel, childcare and other arrangements, the later these are booked, the more expensive they often become. 

Rostering shifts is a complex process, made harder when completed manually. By investing in technology to digitalise planning, with shift bidding and swapping included, it makes it easier for both managers and employees to plan rotas well in advance and improved visibility. This in turn reduces the impact on financial wellbeing, boosting morale and productivity. 

Expenses reimbursement

Many organisations have lengthy expenses processes, taking up to six weeks to reimburse employees. This delay can reduce an employee's cashflow, forcing them to rely on credit cads, pay day loans or family members to cover the gap. The less you earn, the more fragile cashflow can be, and a simple expenses policy can have significant consequences. 

There are many alternatives to avoid employees being out-of-pocket when it comes to expenses. For example, setting up a corporate account for travel and accommodation avoid employees paying the cost upfront. These can have strict access controls and budgets set to ensure they align with your policies. 

If this isn't possible, setting up additional payments to run outside of your standard cycle helps to reduce the time employees are waiting to be paid back. 

The monthly pay cycle

A monthly payroll with a single pay day, referred to as a 'locked pay cycle', is common for many organisations. Where it's not monthly, most organisations have set dates for their payrolls, even where they're weekly, when employees can access their pay. Where cashflow is limited, these set dates can create difficulties for employees where unexpected costs arise. 

Unlocked pay cycles allow employees to access already earned pay throughout the pay cycle. This provides them with greater control over their income and outgoings. There are a variety of technology solutions that offer this flexibility.

Research by Wagestream around the uses of their flexible pay solution found almost a quarter (22%) use flexible pay for travel to and from work. Without this, many employees may find themselves having to refuse additional work as they could not afford the upfront cost to get there.

Organisations with locked pay cycles, with no access to flexible pay, may have employees who are reliant on expensive forms of credit to make ends meet. Often with high interest rates, this is detrimental for financial wellbeing.

Your internal policies, decisions and ways of working all impact the financial wellbeing of your teams. By analysing your existing processes, as well as any benefits and overall salaries, your organisation can find ways to improve the support available.