As part of Even’s work to develop and test innovations that improve financial health, we recently partnered with the Financial Health Network’s (FHN) behavioral economics experts to research and test best practices in encouraging savings.
This was important to Even because as a provider of employer-sponsored earned wage access (also known as EWA or on-demand pay), we want to decrease our members’ reliance on on-demand pay. We do that by helping employees build the savings they need to cover expenses that might come up between paychecks. In other words, even though we are happy to provide members with the flexibility and convenience of on-demand pay, Even’s real goal is to help them develop the financial health (and savings!) to not need it.
This latest FHN research project focused on how to increase savings among new employees at companies that offer Even’s employer-sponsored EWA platform as a financial benefit.
How do we encourage employees to save when we aren’t able to auto-enroll them in an automatic savings program?
By asking employees to describe their savings goals during the Even app’s onboarding process and then making them actively choose whether and how much to save, we can dramatically increase not only the number of people who choose to save but the amount of money they save, too.
After 8 months, those who had to make an active choice whether or not to save during onboarding were much more successful at saving money through the Even app than those in the control group, who had access to Even’s savings features but were not forced to make an active choice. In fact, the active choice group had 42% greater savings balances compared to those who did not see such messaging and had 31% more savers.