Financial resilience and well-being

Helping employees better control their finances and teaching them responsible financial behaviour

Financial wellness is defined as a person’s overall financial health relating to levels of money-related stress. But why exactly is financial wellness important?

In honour of Mental Health Awareness Month 2021, we will examine how financial wellness plays an integral role in the mental and emotional health of your employees and the overall effects this can have on your business. We will also discuss a potential solution to help your employees change their relationship with money by breaking out of the payday debt cycle – the single most important factor raising employee money-related stress.

Financial wellness and mental health

Financial wellness has a direct link to mental and emotional health of your employees. South Africans’ debt-to-income ratio is currently at a staggering 75% on average and many workers find themselves in an inescapable debt spiral. Only one in every ten working adults has cash left after paying their bills and half of all South African employees take out payday loans with high interest rates just to service their monthly expenses.

Some lenders only provide loans of +R1000, thus forcing people to borrow more than they need – at criminally high interest rates. It is this negative relationship with money that can lead employees into a position of elevated stress and pressure, which in turn can affect their overall mental health.

Mental health in the workplace

According to the SA Government, “While the workplace can contribute positively to a person’s mental health, it may also exacerbate an existing problem, or may contribute to the development of a mental health problem. Employers should put in place programmes to promote the mental health of workers, and to ensure that mental health problems are recognised early and treated effectively.” Click here for full resource.

Mental health problems in employees have a direct impact on the workplace, typically manifesting through decreased productivity and increased absenteeism. While there are a number of factors that can contribute to mental health problems, financial stress is a significant contributor to depression, anxiety and poor mental health.

The ‘Paymenow Impact Performance Report’ showed that many workers, especially lower income workers, face many struggles when it comes to making their money last throughout the month. This creates unnecessary problems such as worrying about simply covering commuting costs for work and being able to afford groceries to feed their families.

Without alternative solutions, these employees are sometimes forced to take out loans, or feel like a burden asking employers, friends or family for money. This cycle weighs heavily on one’s state of mind, increasing stress levels as they become more and more indebted.

With 50% of employees experiencing financial difficulties and spending three hours or more at work each week thinking about or dealing with personal finance issues, it is imperative for businesses to take care of their employees’ well-being. Not only would this improve a business’s bottom line and employees’ mental health, but happy employees want your business to succeed and will take a keen interest in your business goals.

This is where the Earned Wage Access solution can help transform the lives of your employees and, in turn, your business.

The Earned Wage Access (EWA) solution

Paymenow is a financial wellness and inclusion platform that allows employees early access to wages they have already earned. Our services help alleviate indebtedness and encourage responsible financial behaviour through a multi-dimensional strategy.

Paymenow’s services are ten times cheaper than a payday loan and three times cheaper than using a credit card.

Earned Wage Access is NOT a loan and hence there is NO interest charged. Our platform simply allows employees access to their real-time wages, enabling them to receive a predetermined percentage of their monthly salary.

In other words, there is zero debt and employees do not owe Paymenow a cent after cashing out their pay advances. The withdrawals are deducted from their salaries on payday and this is all managed through an integrated payroll system at zero cost and with zero extra effort for you, the employer.

The impact report revealed that 67% of people using our services have decreased their stress levels since signing up to Paymenow. Having an EWA solution available to your employees gives them a sense of financial security and confidence knowing they have uninterrupted access to their hard-earned cash in case of an unplanned event. 40% of users report being able to better handle financial emergencies. 

Financial gamification drives a savings culture to reduce financial stress

Driving a culture of savings and leading employees on a journey away from the perils of debt towards the safety of financial inclusion can significantly improve the overall financial wellness and mental health of your employees. Education plays an integral role in correcting financial illiteracy for long-term benefits.

Our app encourages financial education through in-app gamification. Employees earn Paymenow points and advance through tiers to achieve greater access to already earned wages at discounted fees, all while being financially educated.

It is our aim as a company to help your employees go from loans to savings and investments, one small amount at a time.

97% of employees say they have finally found the service they’ve been looking for and 63% have reported improvements in their ability to save because of the help they received from Paymenow.

By simply offering financial peace of mind to your employees, you can help them change their negative perception of themselves of being a “burden” to a positive perception of being “self-reliant”. That could make all the difference to their self-esteem, mental health and wellness.