Research supports that financial wellness initiatives and flexible pay options have on employee productivity and retention. These programmes are gaining traction yet 64% of British are yet to any make significant changes.
This is according to the Future of Pay research study by ADP, a leading global technology company providing human capital management (HCM) solutions. ADP surveyed nearly 7000 employers and employees across 13 countries to explore workers’ perceptions and attitudes towards traditional and emerging pay methods to address some of the biggest human capital management concerns.
ADP’s findings illustrate business’ hesitancy to enhance their employee financial wellbeing initiatives and to make changes to pay structures. This is despite the fact that the report also found 98% of employers admit that employee financial wellbeing impacts their business – particularly regarding employee productivity, engagement and turnover – and that 62% of employees say off-cycle pay options, such as the ability to choose pay frequency, would make a difference when considering a job offer. In addition to this, 79% employees say they want to work for an employer that cares about their financial wellness.
While UK employers are well aware of the changes that need to be made – with 58% agreeing that companies will need to customise payment options to remain competitive in the war for talent and 45% agreeing that outdated payment methods has hurt their company’s ability to attract and retain workers – the majority are yet to act.
Commenting on the findings, ADP UK’s Managing Director Jeff Phipps said:
“Companies are grappling with how to offer off-cycle payments for a variety of reasons from the stigma associated with the pay day loan market, concerns about how HRMC will treat the payments and the impacts on cashflow. Many companies are choosing financial health packages that aim to help employee financial management and planning over earlier access to their wages. But even these companies are cautious for fear of appearing to be “interfering” or overstepping the mark into employee personal affairs.
“Yet the benefits of getting this right can be significant. The ability for employers to offer flexibility or off-cycle payments can be a key asset in differentiating a company and competing to attract and retain talent. In the midst of widespread global insecurity and an increasingly competitive war for talent, companies must carefully consider their next steps.”
Phipps continued: “Payment options can have important effects for workers and impact how employees manage their finances. Good companies want to support their employees by doing more to improve their financial wellness because they know that financial concerns can impact engagement and other health factors.
“Our research shows that many employers understand and see the need to offer non-traditional payment options and other forms of support, but they are struggling with how to move forward or determine that pay and personal finance are too risky to meddle with. But not acting creates a worse outcome. Ultimately, this it is for businesses to develop an open relationship with their workforce and offer benefits that best fit needs and utilise limited resources.”
About the Future of Pay Global Report: The ADP Research Institute Future of Pay survey was conducted with nearly 7000 employers and employees from companies with 50+ employees across 13 countries worldwide. The research assessed how they view pay, what's important, how payment methods are changing and what the future might look like.