The cost-of-living crisis is taking a toll on personal and family finances. Providing flexible pay (earned wage access) can help workers and boost retail employee engagement.
Just over three quarters (77%) of the 2,500 workers surveyed have experienced financial stress over the last year, our research revealed. Unfortunately, this stress is starting to have an impact not just on their private lives but on their professional lives too.
Of these, 54% said financial worries had negatively impacted their workplace productivity. Some 45% admitted to losing sleep over the issue. This led to them feeling tired and being less effective at work.
A third found they lacked focus and concentration. Some 17% had become more error-prone and 14% indicated they were less able to communicate effectively.
Retail employees more vulnerable to payroll errors
But employees in low-wage sectors, such as retail, are suffering particularly from rising inflation and the financial stress from price increases. Unsurprisingly, 76% are more worried about their finances now than during the pandemic. This is having a marked effect on their wellbeing.
Moreover, retail employees are more vulnerable to payroll errors than other workers. This is because just over three quarters (76%) are paid hourly or are on variable rates of pay.
About half of retail staff also work part-time. Varying work patterns can make it trickier for them to work out if their pay is accurate or not.
To make matters worse, only 44% of retail workers say they regularly check their payslips. A further 27% don’t think they could spot an error in their net pay even if they did. Even more worryingly, two thirds indicate they have noticed mistakes, more than any other sector apart from healthcare.
Retail workers are also less confident than staff in any other industry that their employer would sort things out for them.
Some 17% have no confidence they would do so and just over a third (34%) would be ‘uncomfortable’ saying anything in the first place. This figure is 8 percentage points higher than the all-sector average.
Boosting retail employee engagement
It’s clear financial stress significantly impacts employee productivity, wellbeing and, ultimately, retention.
So, it’s vital that employers take action. One way of doing so is to offer flexible pay as part of their financial wellbeing packages. Also known as ‘earned wage access pay’ or ‘on-demand pay’, it lets employees draw down part of their earnings before payday. It means they can access money they have already earned.
A key benefit of this flexible pay approach is that if an unexpected or emergency expense arises, staff can instantly draw up to 50% of their earned pay at any time, including the day before payday. Hourly workers, who tend to have fluctuating earnings, can also use it to smooth out any inconsistencies. This helps reduce potential cashflow problems.
And because the service is not credit, a loan, or other form of borrowing, it is not necessary to undertake credit checks.
Staff also pay no interest on the funds they access. This means they avoid paying the high rates associated with credit card debt or payday loans.
This service is available for employees today through our self-service payroll system and MyView self-service HR portal. MyView PayNow is also available through a mobile app, which can be downloaded from the Apple App Store and Google Play Store.
The service is powered by technology from partner Wagestream, a workplace finance provider that aims to improve the financial wellbeing of frontline workers. Its research indicates that 72% of such workers feel more in control of their finances when using it.
Building retail employee financial resilience
Supporting saving is another way to build financial resilience and improve retail employee engagement. MyView PayNow’s Build feature makes it easy for workers to put money away for either a rainy day or help them meet a specific life goal.
All they need to do is set a Build goal and a deadline. The service then calculates their monthly contribution and automatically transfers this amount to their Build pot on payday at a zero-interest rate. Money can be transferred in or out of the pot for free within two hours.
Monthly draws also take place to incentivise further saving. This is important when more than a third (35%) of people in the UK have a nest egg of less than £100.
Further support is also available through a pay and spend tracking tool.
This enables employees to view all their worked and forthcoming shifts, expected pay, and bank transactions (via Open Banking) in a single place in real time. This makes it easier for them to budget by matching their spending with their income levels.
When provided alongside budgeting tools, savings support, and financial education, flexible pay is a helpful lifeline for retail workers in tough economic times.