The constant stream of COVID-19 news and editorials feature a common refrain: that we are living in “uncertain times.“ This phrase would seem trite by now if it didn’t continue to feel freshly applicable, day in and day out. This uncertainty pops up in different ways for different people: Many wonder how they’ll fare emotionally during quarantine. Others are anxious about unemployment benefits, and government stimulus checks. For those still on payroll, there’s uncertainty around their income — whether they’ll have enough to keep themselves and families safe until the next payday.
Even for those front-line workers who remain employed, uncertainty around money is still high. Some households that previously had two or more incomes now may be reduced to one. Whatever savings people did have are likely to be running out. People are stretched to — or beyond — their financial limits, in an effort to help their friends and family members.
For many, there’s uncertainty about whether the current paycheck will meet all the pressing needs brought about each day. People are wondering if they can buy one more round of groceries before payday comes, or if they have enough money to stock up, in case there are shortages in their area. Folks are wondering if there’s enough money set aside in case someone needs to go to urgent care. They’re unsure if there’s enough gas in the car to get to work and back.
A new report from Ginger, a mental health platform, showed that 70% of employees are feeling more stress than they did before the COVID-19 pandemic hit — and it’s affecting them at work, too. Of the employees surveyed, 62% lost at least one hour of productivity at work per day because of stress related to COVID-19. In addition, 70% of workers said that the employees at their company are significantly less productive because of pandemic-related stress and anxiety. Money was already the top source of stress for Americans, well before the pandemic — now that we’re in an unprecedented economic downturn, that stress is only getting worse.
If people are experiencing severe financial stress, their physical and mental well-being are at risk as well. For front-line workers, this creates a troubling cycle. All this uncertainty about finances is leading to stress, which means they’re having a hard time focusing at work.
For someone whose job it is to take care of sick patients, sanitize public spaces, or put groceries on shelves, losing focus and productivity isn’t an option. The consequences could range from getting disciplined or fired, or contracting COVID-19 themselves, and even spreading it to their families. By giving people a way to put money in their pockets instantly, some of this stress and uncertainty can be avoided.
Many companies are paying their workers more, which is an important first step. However, letting employees access that pay more frequently, which is what on-demand pay does, can be equally valuable. Since three-quarters of Americans were living paycheck to paycheck prior to Coronavirus, even a bigger paycheck will be exhausted before the next one arrives. Giving employees the safety net of instant liquidity takes a huge load of uncertainty off their shoulders.
When we surveyed employees who use on-demand pay, the top three things workers needed money for were groceries, bills, and gas. And, the average amount employees advanced was $150. At a time where there’s a big spike in people looking for information on loans — and most loan products are harmful to employees — on-demand pay is a healthy and useful solution. It helps employees let go of stress about making it to payday, so they can focus on what matters.
It’s important to note that on-demand pay isn’t the only safety net that employees need right now — and they’ll continue to need more help from their employers in the future. But if accessing earnings in the moment means people can feel confident about being able to make it through this, it’s something employers should prioritize.
Now is the time to take bold steps, and make employees feel safe and secure. This can be done, in part, by ensuring your employees never feel uncertain about whether they’ll make it to payday. As part of our COVID-19 response, we’ve made changes to our business that let employers start offering on-demand pay with minimal IT lift. We’ve made it free for businesses to get started, and have a pricing model that makes it so employees can use on-demand pay as often as they need for a flat rate. This ensures that no one is hit with yet another fee when they need to hold onto every penny they have.
Our goal is to help businesses help their workers, in the best way we can. Let us know if we can help yours.
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Biweekly pay doesn't work for the millions of American workers constantly distracted by financial stress. That distraction costs employers billions, too. Learn why, and how you can fix the shortcomings of biweekly pay without changing how your payroll works.