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How employers can tackle cost of living crisis

The rising cost of living is impacting staff across all industries, see the ways employers can help.

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The rising cost of living and inflation are dominating the news in Australia and internationally. For many industries, this undoubtedly has an impact on staff. For example, one in four retail and hospitality staff are already reporting to AMP that they’re moderately or severely financially stressed.

Research from the Dutch National Institute for Budgeting Advice showed that financial stress caused a 20% drop in productivity at work. Since the cost-of-living crisis is soaring in Australia, this is likely to be impacting employers across Australia.

It’s part of a wider trend that preoccupation at work reduces productivity and performance. If you’re physically present at work but mentally absent, it’s impossible to do your job effectively.

 

Unlocking wages to ease financial stress

Pay flexibility means employees are able to set up a seamless way to grow savings, pay down debt more regularly and absorb a financial shock without having to borrow at high interest rates. 

For casual employees, it can even be as simple as having real-time wages to track exactly how much has been earned at any point in the pay cycle. Here are tools to help:

Track

Most casual workers don’t know how much they’ll be paid until they see the money in their bank account on payday. This makes it difficult to accurately budget and make spending decisions. With complete visibility of how much has been earned, employees are able to better plan ahead.  

What we find with Wagestream customers is when casual employees know what they’ve earned and how it compares to their previous earnings, they will pick up extra shifts when they see a potential shortfall.

Earned wage access

According to EY, seven in 10 workers regularly face financial shortfalls. When a shortfall occurs these employees are forced to borrow and pay interest. By accessing their earned, but previously unpaid wages, employees can significantly reduce the amount of interest they pay and mental load of having to manage repayments.

Having this flexibility to match income and expenses means that employees are able to manage their money in the way that best suits them, rather than working to their employer’s pay cycle. 

Automated savings

Saving is a key component of financial wellbeing and essential to create long-term security. But putting money aside can be hard and there are several behavioural reasons for this. Automating the process and reducing temptation to spend are the building blocks of a savings habit.

Automated savings means employees can designate an amount they’d like to save each pay cycle and have that money transferred separately to their regular wages and straight into a savings account. It makes saving second nature.

 

Ready to implement a financial wellbeing program?

There’s never been a more important time for employers to consider how they can support their employees in building secure financial futures. When employers do, they can see proven benefits in terms of talent attraction, productivity and retention.

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