The Retailer Winter edition_2020

workforce

Building financial wellness through earned wage access

NEIL PICKERING MANAGER OF INDUSTRY AND CUSTOMER INSIGHTS IN EMEA kronos

HOW GIVING EMPLOYEES GREATER CONTROL OVER HOW AND WHEN THEY ARE PAID CAN TRANSFORM MORALE AND ENGAGEMENT In this age of economic uncertainty, financial security can be hard to come by, regardless of the industry in which someone works. Rising prices of goods, weak wage growth and a plethora of other factors are contributing to a situation where many workers are living paycheque to paycheque. The retail sector is no different to any other in this respect. An instant recovery for the UK economy might be unlikely, but there are a few things retailers can do in the here and now to give an extra helping hand to their employees. One option is to look at how working culture has evolved to embrace greater agility – think flexible hours or remote working – and consider how this can be adapted to give employees greater financial independence. This is where extending this flexibility to the way retail workers are paid – by embracing earned wage access – can make a big difference. A time of trial for workers The typical UK worker is facing a huge number of challenges, each of which represents a hurdle to achieving financial wellness. The cost of things like rent, transport and household bills are all on the rise. Combine this with political challenges and the country’s economic struggles more generally, and it is easy to see how the outlook is a tough one for many employees. The increase in demand for food banks is a case in point: despite their best efforts, many working people are feeling the squeeze. Flexibility for workers is key Despite these difficulties, there are plenty of reasons to be optimistic for the future if retailers are open to adopting new ways of working. We now live in an era where flexible working in some form is the norm rather than the exception, which serves to relieve the pressure on employees by giving them more autonomy when it comes to when and how they carry out their assigned working hours. For retail specifically, this includes not just the better-known practices like flexible shifts or part-time work, but also staggered hours or job-sharing arrangements for management staff. This desire for working conditions that are better tailored to individual employee circumstances is becoming more pronounced as millennials and Generation Z become the dominant demographics in the workforce. Evidently, showing that you have your employees’ best interests in mind goes a long way towards reducing absence and increasing engagement. That said, there is room for this flexibility to stretch further.

Enter earned wage access This is where the concept of earned wage access has great potential. It is a relatively new idea, but one that we see becoming much more commonplace in 2020 and beyond. In short, earned wage access means employees are able to get hold of their earned money immediately after completing a shift, rather than waiting until the end of the week or month as would traditionally be the case. Its aim is to help workers break free of the month-to-month cycle that can leave many struggling for funds in the run-up to pay day. Essentially, the ultimate goal is to help employees achieve financial wellness: a state where they are able to plan their outgoings more effectively. This helps to reduce many of the common money-related anxieties, such as unexpected emergency expenses, a reliance on pay day loans, or a need to pay costly bank fees or credit card interest. How can retailers make it happen? Making earned wage access a reality might seem like a sweeping change to the way payroll works, but there are methods and technologies available that can make this evolution much more straightforward than it seems. Inevitably, there will be some alterations to established processes and a wider cultural change that will have to be communicated to employees, but with the right approach, this need not be too disruptive to the business. As is so often the case, technology is the crucial enabler here. Firstly, it is important that retailers have a comprehensive human capital management system in place that enables worker time and attendance data to be recorded accurately in real-time. Once this clarity has been achieved, companies are in a much better position to effectively monitor employee movements, and align this with budget and cashflow planning. This can then be combined with specialist earned wage access software, which enables earnings to be released to employees almost immediately, without interfering with other payroll activities or impacting on cashflow. A bright new dawn for worker wellbeing Financial wellness is the next great hurdle for retailers to conquer as far as employee welfare is concerned. Flexible working practices are very much an established characteristic of the sector, but there is still plenty more that can be done to give workers that extra degree of independence that will help them cope financially during tough times. Earned wage access is a practice that might not be ubiquitous in the retail workplace as yet, but can have a transformative effect if companies are willing to consider it. After all, the value of a motivated, fulfilled and happy workforce can never be underestimated, especially in an industry where so many employees deal directly with the general public on a daily basis. By offering this added financial flexibility, retailers can break new boundaries in positive employee engagement.

20 | winter 2020 | the retailer

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