13 January 2023
Are your employees being priced out of coming to work?
Financial wellbeing starts with policy
Financial wellbeing strategies vary in their effectiveness. Choosing and communicating the right support is critical to success. Internal policies and ways of working are often overlooked, but they have a far more potent influence on financial wellbeing than is widely thought. If you want to turn the dial on financial wellbeing, don’t skip this key area.
In this article, we look at three ways your internal policies directly affect the financial wellbeing of your team members – and what action you should be taking.
Your shift allocation system
Do you offer any compensation if shifts are cancelled at short notice? If not, parents might not be able to cancel childcare arrangements and will be out-of-pocket. What about enabling staff to easily swap shifts, so that emergencies do not impact earnings? Here’s another one: how early do you allocate shifts? People need to organise things like childcare and travel and, like many things in life, the later these things are organised, the more they cost.
Giving out rotas earlier and investing in technology that allows quick and easy shift swapping within and outside teams enables individuals to manage their shifts to suit the moving goalposts that define life.
Shifts are a complex, multi-faceted area and they need very careful analysis to ensure they work for both organisation and individual. But because they’re so core to the experience of both parties it’s worth diving deep. The way they work can have a considerable impact on financial wellbeing and even making small improvements can transform the financial wellbeing of your staff and how they feel about coming to work.
The long wait for expenses reimbursement
When it comes to expenses, many organisations expect their people to wait up to six weeks to be reimbursed. Many groups suffer because of these policies – reduced cash flow could force them into taking on expensive forms of credit. Expenses policies may at first seem unrelated to financial wellbeing, but they can impact cashflow – and cashflow is more fragile for those who earn less.
There are now many technology solutions on the market that do not require employees to pay out-of-pocket for expenses, but that offer advanced user control and access to satisfy compliance and operational requirements. At the very least, paying back out-of-pocket expenses outside the standard payroll cycle will go some way to mitigating cashflow issues caused by long waits for reimbursement.
The monthly pay cycle and how it affects cashflow
Pay cycles can be locked or unlocked. Locked pay cycles provide one payday a month on which the employee receives their full pay. Unlocked pay cycles empower employees to access their earned pay throughout the pay cycle which allows them to pair income more optimally with outgoings. This is very important, particularly for those who earn less, because as we all know expenses often come at inopportune moments.
In our latest research, we looked at the reasons why employees use Wagestream’s flexible pay feature. Close to a quarter (22.1%) use flexible pay for travel to / from work, while over a third (34.9%) have income fluctuations such that they sometimes earn enough to pay their usual bills and sometimes do not. Locked pay cycles do not allow individuals to match cashflow and expenses. Organisations not offering flexible pay, may be forcing employees to access expensive forms of credit to enable them to pay everyday expenses.
If you’re considering how your internal policies, decisions and ways of working impact the financial wellbeing of your teams, feel free to reach out. We offer free financial wellbeing consultations. You may also want to download our latest financial wellbeing research, which looks at the impact of the cost of living on UK employees.