New paradigms of financial wellness
In today’s times, with employees being subject to escalated levels of financial stress, it is time employers also started establishing an effective financial ecosystem. This will enable the workforce to build financial resilience stemming from a place of self-respect. The pandemic led to certain situations wherein employees needed access to finance, but sometimes may have struggled for the same. Naturally, wellness, in all forms, became a critical organizational component from once being at the periphery. well-being has panned out in different forms i.e. physical, mental, emotional, financial and even spiritual. But with Refyne, one can see a whole new element of financial well-being via Earned Wage Access (EWA).
In a VRT held in association with Refyne at TechHR 2021, HR leaders from various organizations shared their thoughts on the new paradigm of financial wellness.
Malcolm Dsouza, Head HR, Edwards Lifesciences stated, “We started financial wellness from 2010, conducting drama-based education around tools , investments, tax-saving etc. Refyne is truly different from other mainstream financial wellness element.”
What is Earned Wage Access and how does it aid financial well-being?
Earned Wage Access is a means for an employee to get their accrued pay that they earn each day i.e. employees can access a portion of their real-time earned but unpaid salary as and when needed.
It allows flexibility in retrieving money rather than waiting for the month end, enabling users to withdraw their salary on-demand.
EWA has the power to enhance mental well-being and productivity by introducing individuals to a stress-free state of financial security. It also aids in moving away from a credit culture and developing better money management skills.
Manoj Sharma, Joint President and CHRO, Aarti Industries shared, “Pandemic or no pandemic, to me it is about self-esteem of individuals, plus it enables the HR function and the organization to look beyond managing admin aspects and providing financial assistance to employees”.
The concept moves beyond the traditional thought of financial wellness such as retirement planning, workshops for tax planning etc. It is a powerful yet neutral solution as a person can withdraw his or her own money instantly at any given point of time, reducing a 30-day struggle to access salary down to less than 60 seconds. EWA platforms equip users to beat financial crunch and fund themselves and family members in unforeseen situations. More than mere funding, it is about generating self-respect and solving a real business issue for corporations.
Mukta Nakra, Head, HR and Sustainability, Marks and Spencer Reliance India Ltd. said, “Pandemic saw some employees not getting salaries on time, it is critical to break that”.
Refyne’s Earned Wage Access platform: Key use cases
Financial well-being is increasingly becoming a core talent agenda. Ganesh Raman, Head Digital Transformation, Analytics, Business Transformation, CHRO for 2 businesses of Sinarmas, Indonesia, says, “We focused on enhancing medical access and coverage, providing food, assisting families etc. as a way to strengthen relationships with employees. The question of on-demand access to wages arises because sometimes the money employees earn may not be enough to get upscale treatment.”
From an employee viewpoint, the following features work in favour:
- Available to any individual regardless of their credit rating & history
- Applies across income segments. For example, delivery executives in logistics have used the app to buy fuel to complete their tasks. High-end income holders have used it to move liquidity to chase equity when the market is good
- Avoid engaging with unregulated credit mechanisms that are leading to borrowers’ exploitation. The lending factor is mitigated as accrued pay is determined by work completion, thereby no risk of defaults
- Helps cases where people need money urgently, for example, buying an oximeter for medical exigency during Covid times
EWA is helping achieve financial freedom down to a personal level while removing psychological financial stress and driving happiness of individuals with a mentality of “I can draw what I have earned till now”.
Renu Bohra, CHRO, DB Schenker India and sub con, talked about how they encountered cases of severe depression amongst employees due to financial burden during the pandemic. “We looked at options such as cashless schemes, daily consultation facility, and payments to hospitals versus payments to employees. Such an earned wage approach may work well especially for the worker segment since they have high levels of self-esteem, but because they are not close to us, they do not directly ask for money”, shared Renu.
Pushkina Nautiyal, Head of Marketing, Refyne shed light on what works well from an organizational point of view:
- HR can define and control the degree of access: HR can decide how much percentage of their earned salary employees can access based on various parameters
- Helps stabilize and instil financial discipline in employees: Certain income groups spend voraciously in the first half of the month, and live on borrowed money in the second half. Since this group cannot withdraw more than what they have earned, their spending can be better stabilized
- There is no risk in adopting EWA for organizations. In case of risk-elements such as absconding employees or defaulters, there are mechanisms to raise red flags, stop accruals and drive accountability. Ganesh added, “The risk I see is easy access to money can get people to squander it, deviating from the idea to use the tool to focus on criticalities such as employee safety, medical access etc. By addressing this, the organization can know where to focus and how to impact by making a difference to someone’s life.”
- Compliance with RBI, regulatory affairs and Code of Wages
- Good infrastructure i.e. ability to integrate with any HRMS and other payroll systems, plus flexible APIs to plug-and-play for a seamlessly integrated experience
- Data points and dashboard for employers and HR to track employee usage metrics
- Availability in 9 local Indian languages for inclusion
Building trust & financial well-being with EWA
Pushkina Nautiyal revealed, “Refyne is about re-defining finance i.e. changing the way finance is looked at. Our mission is to eliminate expensive payday loans by enabling flexibility and access. In India, employees trust their employers more than anyone else, so becoming a zero-cost, zero-risk B2B2C solution was important to rewire the thought process of financial well-being.”
Metrics support this view. Typically within fifteen days of launch, Refyne sees a sign-up rate of 60%, with overall at least 30% of employees actively transacting. With older partnered organizations, they have seen attrition rates dropping by as much as 25% in the income segment less than INR 40,000.
As Ajit Dias, CHRO, Roots Corp stated, “We used to offer interest-free loans based on certain criteria. But hidden charges with credit card companies and low interest loans involve a lot of time and formality."
EWA solves this issue by presenting a transparent, affordable and easy to use tool for financial diligence and discipline.
In India’s progress as a nation, employee well-being must be a core element to help people contribute to the overall self, family and ecosystem. The way to go about it is by opening access to affordable finance to everyone without bias, making it a lifestyle choice. This is possible because Refyne is fuelled through tech and backed by the employer.
The no-cost, no-risk nature of the application fosters a rounded financial well-being approach made available from the employer to the employee.
By tapping into all segments of income-earners, EWA has the potential to become a powerful enabler towards financial inclusion.