Seven out of 10 employees admit they're living pay-check to pay-check
The balance of power in the global workforce has shifted towards employees, who’re demanding greater control over their pay and benefits. That’s the conclusion of a study from Sydney-based fintech Flare, which collaborated with leading consultancy Ernst & Young (EY) to survey seven thousand workers.
Fifty five percent questioned say that since COVID-19 their expectations of their employer have changed. Concern over their finances accounts for over 50% of recent resignations, the report finds. It highlights a workforce with limited access to benefits or products which support financial wellbeing. Just one in three employees has access to a benefits program, yet those who do so believe that it meaningfully improves their pay package and their sense of financial security, while making them less likely to leave their jobs.
Seven out of ten of the employees quizzed admit they are living pay-check to pay-check and, on average, have less than $5,000 in savings. Over three quarters wish to take up key financial benefits like competitive salary packaging.
The report suggests that employers of all sizes have an imperative to review the financial and personal benefits that they are offering their employees, or risk being left behind. Furthermore, it says that the conventional approach of providing a static intranet page for a workforce misses significant opportunities for employee empowerment and engagement.
Flare Co-Founder and Co-CEO, James Windon, explained, “Workers are coming to expect more from their benefits: nobody should have to pay to get paid. Employers can no longer provide a static intranet and expect to retain staff. The reality for most workers is that they’re not in an office every day. They’re remote or on their feet, and need financial resources in their hands, on their smartphone.”
Among the key findings are that only half of employees are paid weekly and one in four report being paid late, resulting in extended periods where employees are without the pay they are owed and seven out of ten have an inability to meet their financial needs in an emergency.
Despite the financial pressures they are under, seven in ten employees admit they would never ask for a pay advance, choosing instead to take on debt to meet their cashflow needs. Two out of three have turned to credit cards to meet their spending needs; on average, they are now nearly $3,000 in debt. One in five has used a personal loan or mortgage drawdown for a vital purchase and two in three wait until payday to make important purchases.
Flare, a leading benefits platform and pay technology provider based in Millers Point, NSW, has recently launched its Flare App and Card. It is available for free to businesses of any size and, the company says, brings its full suite of benefits into the hands of employees. The app includes access to salary packaging services to save on tax and better engagement with superannuation savings. “It’s our goal to equip businesses of all sizes to compete for top talent,” James Winton added.
