On-demand access to earned pay – a service that allows employees to access a portion of their earned wages before payday, has gained significant momentum amongst South African employers in the last few years.
It is now being recognised as a critical solution to help employees build financial wellness and in so doing, enhance organisations’ employee value propositions (EVPs).
In South Africa, an environment in which 76% of South Africans run out of money before month-end, on-demand access to earned pay provides a viable solution to bridge the gap to payday, helping employees reduce their reliance on debt during this time and easing financial stress.
An increasing number of senior HR executives are advocating for earned wage access as a cornerstone of their EVPs.
This is the opinion of Andisa Liba, chief people officer at South African on-demand access to earned pay provider, Floatpays.
She says: “Access to earned pay, whenever employees need it, provides a viable solution to a South African challenge and a powerful means by which to encourage financial wellness in the workplace.
“The effects of financial stress on productivity and employee satisfaction cannot be underestimated. There is therefore a strong business case to be made for incorporating earned wage access into an EVP.”
Two South African realities, catalysed by the onset of COVID19 as well as a bevy of socioeconomic challenges, substantiate the fact that businesses across the board should be paying more attention to helping their staff build financial wellness. “The first reality is that South Africans are financially pressed and stressed and the second reality is that this financial stress has direct negative implications for employers,” says Liba.
In her 15 years’ experience as an HR professional, Liba has seen first hand the financial problems that employees face and how it impacts their work.
She comments: “It is imperative for HR executives to recognise financial wellness as a key pillar of employee wellness. Financial stress is not good for employees and it is not good for business.”