Michael Trüschler is the co-founder and chief executive officer at FlexxPay a UAE-based financial technology company providing employee benefit solutions for businesses of all sizes in the Middle East and North Africa (Mena) region.
Employee wellness in the workplace is quickly rising to the top of company agendas worldwide as it directly relates to employee productivity, retention rates and losses occurred in the business.
The levels of stress that employees are dealing with today are higher than ever and one of the most common causes of employee stress is financial.
According to financial services firm John Hancock, close to 69 per cent of employees are stressed about their finances, with 72 per cent admitting to worrying about their personal finances at work.
Employees who bring their financial stress into the workplace are disruptive not only for the employees and their productivity, but also for human resources (HR) managers, line managers and ultimately c-suite managers if the final decision on salary advances and loans rests with them (as is often the case).
This is a global issue that is impacting companies of all sizes and employees at every level. A recent study in Australia (the 2020 Gallagher Financial Confidence Report) found that financial stress does not discriminate, with 70 per cent of employees admitting to worrying about or spending time dealing with money at work - irrespective of their position or level of income. A lower-paid employee might be worrying about meeting regular bills when an unexpected expense comes up. A higher-paid employee might feel the pressure of making mortgage and car payments when they have to pay college tuition for a child.
Through the years, I have had many employees approach me asking for salary advance or loans to cope with the expense of supporting ageing parents back home one month, and then requesting loans to pay for school tuition for young children the next. Line managers, HR and finance staff are usually involved in a decision process of approving salary advances which all adds up to time taken away from actual work.
The Case in the Middle East
Workplace and financial stress are noticeably widespread across the Middle East and North Africa (Mena). According to a survey by Bayt.com, the main stress factors for residents across Mena was their financial situation (40 per cent), followed by their work (19 per cent).
Over a third of UAE respondents (33 per cent) from the Bayt.com survey cited low salary as the number one cause of stress at work and 21 per cent said that their personal financial situation is their top "stress-inducing factor".
Financially stressed workers are twice as likely to spend three or more work hours per week on their respective financial issues and are also more likely to miss work as a result of personal financial issues. The cost to companies is 16 to 25 lost days of productive work per stressed employee per year and greater staff turnover equating to 13 per cent-17 per cent of total salary cost according to the Salary Finance survey and the PwC 2019 Employee Financial Wellness Survey.
This is a growing problem that employers are now making a top priority to address because of the impact it has on their bottom line.
If Richard Branson famously said that “employees come first, not clients’, it’s no secret that a company’s most valuable “asset” is its employees. Employers should not only be concerned about this problem, they must actively work to solve it.
Employee Wellbeing on the Rise
According to Grand View Research, the global corporate wellness market size is projected to reach $90.7 billion by 2026 as employers invest in wellness programmes to encourage healthier lifestyles and address the psychological and financial wellbeing of their employees.
In a 2017 survey by insurance firm Bupa Global, over 95 per cent of employees in the UAE believe they would be more productive if they were happier in their workplace.
The UAE has made a long-term commitment to changing the way companies and staff view health and wellbeing at work. A 'Business for Wellbeing Council' was launched to support the more than five million private sector workers in the country. The council is tasked with encouraging organisations to introduce work-friendly initiatives such as flexible working hours and regular mental health counselling sessions for its staff.
Given the attention employee wellness and workforce productivity is attracting today, companies that provide employee benefit solutions are gaining in popularity.
Timely Access to Salary as a Solution
It is no surprise that one of the most sought-after benefits by employees is the opportunity to take a portion of their already earned salary before the regular payday.
This fast-growing industry has attracted a lot of interest from venture capitalists and investors such as Jeff Bezos and Bill Gates who have invested heavily in startups aiming to solve the pay frequency problem for employees.
US-based Lyft and Uber were at the forefront of the early-pay trend and now Burger King, Taco Bell and KFC are all giving employees the option of taking out a portion of their monthly salary. At Walmart, more than 300,000 employees use the retailer's early-pay app which provides them with a certain financial flexibility to access immediate funds for unforeseen expenses.
Platforms such as FlexxPay increase employee productivity and retention rates by reducing financial stress on employees. Companies can also save significant amounts of money. If you take into account exit costs, lost productivity, lost expertise as well as recruitment, orientation and onboarding costs, a company of about 500 employees can save an estimated $200,000 a year according to our calculations.
In a region where recruitment and keeping talent is a challenge, companies are now taking the wellbeing of their employees a lot more seriously as they see direct savings and impact on overall company performance.
Wamda has invested in FlexxPay