The workforce today is more diverse and complex than ever before. Five generations of workers with different experiences and expectations are navigating a world of work that’s fluctuated between in-person, remote, and hybrid alongside an era of inflation and economic uncertainty.
It’s a lot. And it’s changing how people think about their jobs, employers, and pay. For example, employees place more value on flexibility now than they did before. According to one Gartner survey, candidates would choose a job that gave them more flexibility about when they worked (51%) and where they worked (47%) over one that gave them a 10% raise.
The desire for more flexibility also extends to payroll. Just ensuring accurate and timely pay is no longer enough. Payroll needs to partner with total rewards to empower employees with financial wellness solutions.
We discussed some of these solutions in a previous blog on corporate perks and benefits. In this blog, we’ll go deeper into key strategies and tools that can enhance the pay experience and foster greater satisfaction and motivation among all five working generations.
1. Digital wallets for pay transparency
Digital wallets have emerged as powerful tools for enhancing pay transparency, and they’re gaining in popularity. According to Juniper Research, 60% of the global population could be using a digital wallet by 2026. Digital platforms like these offer real-time access to pay information and empowers employees with greater financial visibility.
Enabling employees
In the age of instant information, employees appreciate the ability to monitor their pay at their convenience. This is especially true for employees who are living paycheck to paycheck, which is nearly 55% of employees according to a 2023 MetLife poll. Digital wallets enable them to check their pay statements, track hours worked, and stay informed about any changes as they happen. This transparency contributes to a sense of control and financial security.
Enhancing transparency
Pay transparency is more than just displaying numbers; it's about providing context. Digital wallets can improve transparency by breaking down taxes and deductions, helping employees understand where their money goes, and building trust with payroll.
2. Earned wage access for financial flexibility
Earned wage access (EWA) is a modern payroll solution that lets employees access part of their earned wages before payday, giving them greater control over their cash flow.
Empowering employees with timely access
One of the key advantages of EWA is the ability for employees to access earned wages in real time. This allows employees to meet immediate financial needs, such as unexpected expenses or emergencies, without using high-interest loans or credit cards. Research shows that 70% of employees view earned wage access as an important benefit, with the potential for it to improve productivity by 11% and reduce attrition by 16%.
Minimizing financial stress
According to a survey by CNBC, approximately three-quarters of working Americans feel stressed about their finances. EWA helps alleviate some of that stress with immediate access to an employee's own hard-earned wages. As a result, they can rely less on personal loans or predatory payday loans, which can carry an annual percentage rate (APR) of 400% or more, according to the Consumer Financial Protection Bureau. Loans of any kind create more debt for struggling employees and only make financial stress worse. But with access to their own wages, employees are empowered to manage their finances and navigate financial challenges more effectively.
3. Payroll cards for bridging convenience and financial management
Whether digital or physical, payroll cards offer a streamlined approach to pay distribution, eliminating the need for traditional paper checks and providing employees with a convenient and efficient way to access their earnings.
Supporting the unbanked and underbanked
Payroll cards are especially beneficial for employees who don’t have traditional bank accounts. They allow for direct deposit onto the card, ensuring quick and easy access to funds. This kind of support is critical for millions of unbanked or underbanked Americans.
According to the most recent data from the FDIC, approximately 14% of U.S. households are underbanked, and about 5% are unbanked. Employees who fall into these categories are more likely to depend on check cashing services to give them immediate access to funds. However, per MarketWatch, these services have downsides, from higher fees ranging from 2% to 6% of the check amount to limits on how much you can cash and security issues.
Empowering employees
For those with bank accounts, payroll cards are still highly beneficial. From budgeting to tracking expenses, the features available with a payroll card provide one more way to improve financial well-being and financial literacy.
4. Automated savings plans for financial wellness
With more than half of working Americans living paycheck to paycheck, saving money can be a struggle. According to Bankrate’s 2024 report on emergency savings, more than 1 in 3 U.S. adults have more credit card debt than savings. Payroll can help employees by directly integrating an automated savings plan into the pay process.
Promoting financial wellness
Employees can automatically contribute to savings accounts, retirement funds, or other investment vehicles with an automated savings plan. This makes it easier to work towards savings goals and financial security.
Aligning employee goals
By aligning savings plans with individual employee goals, such as homeownership, education, or retirement, payroll departments contribute to the overall well-being of their workforce. This personalized approach demonstrates an understanding of employees’ financial aspirations.
5. Connecting pay experience with health and financial benefits
Integrating pay processes with employee benefits like HSAs and FSAs is a progressive step towards a holistic pay experience. Payroll professionals can streamline contributions to these accounts, creating a seamless connection between an employee’s financial and health well-being.
Streamlining healthcare and financial benefit contributions
By facilitating contributions to HSAs and FSAs through the payroll system, employees benefit from the convenience of automated deductions. This simplifies the process and encourages greater participation in these benefit programs.
Supporting holistic employee well-being
Connecting pay experiences with health and financial benefits goes beyond mere convenience — it reflects an organization’s commitment to supporting the holistic well-being of its workforce. And it works. According to a 2022 Bank of America study, 91% of employees reported improved satisfaction through financial wellness tools.
6. Payroll bill pay for simplifying financial management
Payroll bill pay services make it easier for employees to manage their monthly bills by integrating bill payment capabilities into the payroll system, creating a centralized platform for financial obligations.
Facilitating seamless bill payments
With payroll bill pay, employees can set up automatic payments for recurring bills directly from their paychecks, reducing the risk of missed payments, late fees, and the stress of multiple payment deadlines.
Reducing financial stress and enhancing convenience
As we’ve mentioned, financial stress is a significant concern for many employees. Payroll bill pay services contribute to a more stress-free financial experience by automating routine payments. This saves time and ensures that financial obligations are met consistently.
7. Streamlining verification processes: VOI/VOE
Traditionally, verifying income (VOI) and employment (VOE) is time-consuming and challenging for employees and payroll. Leveraging technology to streamline these processes is key to ensuring efficiency and accuracy.
Utilizing technology for quick and accurate verifications
Automation can significantly reduce the time and effort involved in verifying income and employment details. Imagine one of your employees is trying to buy a car and is informed they must wait a few days for someone on the payroll team to provide income and employment verification. Not only is that extra work for your payroll team, but it’s also inconvenient for your employees.
The same example applies in other cases, from renting an apartment or buying a home to making other financial commitments. Digital verification systems provide quick and secure access to necessary information, resulting in smoother transactions for employees and reducing the administrative heavy lifting for your payroll team.
Ensuring data security and compliance
When streamlining verifications, you must prioritize data security and compliance. Secure digital solutions enhance efficiency and protect sensitive employee information, instilling trust in payroll.
WideOpenWest and flexible pay
One company that has taken steps to help employees make the most of their pay is WideOpenWest (WOW), one of the largest cable and internet providers in the U.S. WOW adopted myFlexPay from OneSource Virtual in late 2021 to give employees a flexible pay solution.
During a Workday Rising session in 2023, WOW’s director of payroll operations explained how she overcame her initial skepticism of flexible pay to become a myFlexPay fan. It started with the implementation, which she called “the easiest implementation I’ve ever experienced.” From there, the company enjoyed a healthy adoption, doubling its initial goal to hit a 20% adoption rate — and proving that employees across the organization, not just frontline workers, were interested in flexible pay.
“Our employees love [myFlexPay],” WOW’s director of payroll operations said, “and, in turn, our executives love payroll because we’ve done something for the employees that cost us nothing.”
OSV’s flexible pay solution is available to any OSV payroll customer as part of its comprehensive myFlexWallet app for employees.
Meet evolving expectations with modern solutions
Professionals play a critical role in shaping employee satisfaction through the pay experience. By embracing digital wallets, payroll cards, automated savings plans, and innovative connections with benefits, payroll departments can create a more engaging and holistic employee pay experience. Streamlining verification processes and introducing payroll bill pay services further contribute to a stress-free financial journey.
To meet today’s evolving expectations, organizations have access to a variety of tools to increase employee compensation satisfaction aside from simply offering salary increases. With the right financial well-being features, you can help foster a motivated, satisfied, and empowered workforce.
