In tune with the times
This interview was carried out by Elliott Chase, Managing Editor at i-FM. He interviewed our Co-Founder and CEO, Peter Briffett about the origins of Wagestream and how the business has come on to where it is today.
Wagestream is the sort of business idea that probably leaves other entrepreneurs muttering ‘I wish I’d thought of that’.
It could well be a business whose time has come. Put together with a commitment to solving real-world problems, in a period when solutions were needed – as they are even more so now – combined with technological nous and perhaps a dash of luck. You can trace its origins back just three years, to a 2017 Wall Street Journal article that left two UK tech pioneers saying ‘we could do that’.
The focus of the article was the huge American retailer Walmart, and specifically its search for a new pay model that would help the company and its employees by reducing financial stress and incentivising both improved productivity and better retention rates. “We thought, what an amazing concept if you could actually give people access to their earnings as they earn them,” recalls Wagestream CEO and co-founder Peter Briffett (below), speaking on behalf of both himself and co-founder (and CTO) Portman Wills.
Briffett adds: “And would you also be able to make redundant the various predatory external solutions, like payday loan companies, as well as overdraft fees – both of which are onerous in a lot of people’s lives? Some of those things arise from shift workers being restricted from access to their earnings, especially in the UK where increasingly people are paid monthly. We just thought if we could give people access to the money they’ve earned then they don’t have to fall into debt between pay cycles and they’ve got money to use in emergencies.”
Briffett and Wills devised a construct in which their new business would not provide any form of credit but would contract with an employer to access the necessary data – how many hours employees have worked, shift rotas and the like – and then offer the opportunity to release the money that the company essentially owes an employee at any point in the pay cycle. Just by using a simple app.
“We built the system – and it has gone extremely well,” Briffett says with considerable understatement.
Indeed, they did build it, based on – to quote the company website – “a mission to bring financial resilience to workers across the globe. By putting workplace data into the hands of workers, Wagestream’s financial solutions allow employees to track, budget, save and stream their earnings, all in real-time.”
Briffett concedes that he and Wills didn’t have the resources to get the business fully up and running. Initial financial backing came from a series of UK charities, all committed to the principles underlying the stated mission. Then in July this year the team raised another £20m from private sector investors to support plans for continued expansion of the business.
Doing what it says on the tin
The service Wagestream provides is known as income streaming, or alternatively as earned wage access. The ‘face’ of the service – the Wagestream app – basically shows employees how much they are going to earn and how much they have earned so far in a pay cycle. “We’ve learned from doing this,” Briffett notes, “that a lot of shift employees don’t actually have a good understanding of how much they are going to earn in a month. The pay can be variable, and providing people with that visibility has been a real benefit in itself: many people who download the app use it just to have this visibility.”
He continues: “When we contract with a company the system is available to every employee. Take-up is voluntary, and how the app is actually used is up to each individual.” And the appeal is not just to shift workers: “We’ve also found that salaried workers are interested too – even people on salaries can suffer liquidity problems,” Briffett says, adding: “The system is open to all and we think it should just be normal that people can access the money their company owes them.”
The mechanics are straightforward. In addition to employees seeing what they are earning, they can access a portion of what is already owed to them and have it transferred instantly into their bank account. The transfer shows the employer as the payer, though Wagestream funds these interim payments. Briffett explains: “We realised from the start that a lot of companies have gone to monthly pay because it is better for their cashflow management; but this can cause stress for employees. Wagestream is the bridge in the middle. Our technology sits on top of the employer’s workforce management tools, scheduling tools and payroll systems. This enables interim payments, then when the employee is paid in the normal cycle any advance is taken out and paid to Wagestream by the client, with the balance going straight to the employee.”
Reverting to the bigger picture again, Briffett says: “Banks can offer financial services, but their motivation is to make money. Employers who offer financial services like this are looking to increase support for people, reduce their stress, enhance their productivity and increase retention. All that can mean huge cost savings for a business.
“We have also learned that a flexible pay system tends to make it easier to recruit people. And people tend to do more hours – if they have real-time visibility of what they are earning and they know they can access money if they need to they tend to put in more time, seeing more explicitly the link between work and financial reward.”
Summing up the motivation behind the concept, Briffett adds: “This is a change in the incentive structure around financial services – we’ve realised that we can offer these services and also help people out. If people are falling into the hands of predatory lenders because they can’t access their money, that’s never going to be in the employee’s or the employer’s interest. And at the same time the technology has grown up to solve the problem – faster-payments banking, and data processing and storage in the cloud.”
So, where to from here?
Peter Briffett’s background is technology: he has been involved with a number of fast-growth businesses and admits that though he’s had a fair share of success, he’s also seen a few failures. But unlike the traditional serial tech entrepreneur, he seems content to stick with this particular success. “We’re really enjoying this business,” he says. “We see our future in providing really strong financial products via the employer. Pay is the biggest benefit an employer gives an employee, despite whatever other things might be on offer. Pay is such an emotional issue; it can be a very positive thing, too, if it responds to employee needs by being more flexible, more real. We’re seeing all this underlined through the experience of Wagestream in use.”
In addition to the UK, the company is already operating in the US, the Netherlands and Spain, with France to follow. “There is competition everywhere,” Briffett says, “and that’s great. I think in four or five years’ time it will be unusual for people to not have instant access to money they’ve earned. We can see the trend growing, driven by some big companies like Walmart, Starbucks and McDonalds. It’s not a winner-takes-all market; there will be numerous other providers – we just want to be the market leader. The key is making sure that people are able to access their money every single day of the pay cycle in a fully transparent system.”
As a UK start-up, Wagestream launched initially in the hospitality sector, subsequently moving into healthcare. Their most recent market involvement is security and facilities – “a great sector that we can really help people in: employers are seeing incredible results,” Briffett says. “We partner with Innovise, the workforce management software specialist, through their Timegate system, which means Innovise customers can ‘turn on’ Wagestream in less than a week.”
Then of course there is one final question that must be asked these days: what has been the impact of Covid-19?
“It’s been interesting,” Briffett says. “It has changed things in some ways. Where people have been furloughed we have been able to give access to funds due in the same way. But what we are seeing more recently is more demand, as companies realise that the financial resilience of their staff is being tested. All the payment holidays have happened, the furlough scheme looks set to end, many people have been earning less – so wage streaming becomes a clear benefit. There is definitely more interest in how we can help.”
And Wagestream’s data is also providing real-time insight into what’s been happening, as well as a view on the short to mid-term future. Briffett continues: “We saw a lot of shifts disappear across hospitality, of course, and though we’re seeing some of that come back it is clearly below past rates. That probably implies more redundancies over coming months. In security and facilities the numbers are looking much better. Across our sectors, hospitality and retail have been the hardest hit; security and facilities definitely took a big dip, but it’s not looking as bad as the other sectors. That doesn’t mean no redundancies, but the positive news is that shifts have been growing well in recent weeks.”
Wagestream appears to be a business, and a service, right in tune with the times. If it is enjoying increased take-up, that’s good. And if its data shows some recovery within the FM sector, that’s good too. These days, any positive news is welcome.
To find out more about how Wagestream can help your business, get in touch.