HR leaders mull financial wellness against wages

Stream, a financial wellness vendor, held its inaugural US conference at a time when American workers are feeling particularly unwell about their finances.

The UK-based company, which offers earned-wage access, gathered some 150 attendees in Dallas on Sept. 29 to chat about topics like financial health and open enrollment.

Stream’s conference, called FinWell, occurred the same week the Commerce Department released data showing inflation remained high in August, due in part to the ongoing war in Iran. US wages aren’t keeping up with rising prices, and the high price of fuel is making worker commutes more costly. The Federal Reserve recently raised interest rates for the first time in three years, meaning borrowing costs for purchases like homes and automobiles will go up, too.

“It’s gloomy, unfortunately,” Portman Wills, Stream’s co-founder and CEO, told HR Brew. If there’s any silver lining to our current economic moment, it might be that inflation affects higher-income workers as well—and may prompt employers to find new ways to alleviate financial stress for their employee population.

“All of a sudden they’re getting squeezed in the same way that their workforce often is,” he explained.

HR leaders in attendance at the conference said they’re considering a variety of ways to help workers feel better about their finances. But in the end, the most effective action employers could take to do this—raising wages—may be off the table.

More than EWA. In recent years, earned-wage access (EWA) has emerged as one lever employers can pull to help hourly and frontline workers feel more secure about their finances. These programs let employees collect part of their wages ahead of their scheduled payday.

While Stream started as an EWA provider, its leaders stressed that paying workers more frequently isn’t a silver bullet for the current economic moment. At the conference, Wills and Stream’s executive chairman and co-founder, Peter Briffett, spoke about an entire suite of solutions the company has developed, including workplace loans and a tool that helps workers claim government benefits for which they’re eligible.

Many of the HR leaders who were in attendance oversee workforces with high shares of hourly and frontline workers, and they acknowledge the tough moment their employees are in. Ross Stores, Inc., which operates clothing retail stores across the country, has recently seen an uptick in employees taking hardship withdrawals from their 401(k) accounts, Lisa Singh, the company’s senior director of benefits, said.

“It’s not only the lower-paid hourly workers. We’ve got a lot of middle managers as well, taking loans and withdrawals,” she added. Retail store managers at Ross make about $70,000 a year, on average, according to an estimate from Payscale.

Allison Lyons, who most recently served as VP of HR for Frontier Communications, similarly observed that financial stress can be felt by broad segments of the employee population.

As workers try to manage the rising costs of items like gas and childcare, “someone making $100,000 a year is having financial stressors that we never thought [about] before,” she said. “I’m seeing that change how we design benefits and look at benefits, because really, we have to think broader.”

Wages win out. Benefits leaders are in a tough spot right now, as they’re tasked with helping improve employees’ financial health at a time when both workers—and in some cases, the businesses they work for—are hurting.

Faced with health costs that are projected to rise by upwards of 9% next year, “we’re pulling levers that we never thought that we would have to pull before, and having very difficult decisions,” Jennifer Weinstein, VP of benefits at Albertsons, said. When benefits teams have to deliver tough news about changes they made to workers’ health plans in light of these costs, “you’re in a very difficult position,” she said.

HR leaders who were in attendance at FinWell said they were implementing or considering a variety of financial wellness benefits in light of current economic conditions. In addition to EWA, they spoke about making design changes to health plans, connecting workers with government benefits they may be eligible for, launching 401(k) managed accounts, and providing financial training during specific moments in employees’ lives (i.e. after having a child).

But at the end of the day, workers who attended FinWell said the benefit that would go farthest in helping them feel less financially stressed is additional compensation. When asked what they would prefer, higher pay or better benefits, a panel of frontline workers answered resoundingly in favor of the former.

“Just give me my money!” one worker said. Another concurred.

Stephanie Land, who wrote the bestselling memoir Maid, about working and living in poverty, agreed with this sentiment during FinWell’s last panel of the day.

“People just need to get paid more money…to me, it’s really that simple. I am appalled that inflation has increased—rent and gas and all of these costs—and our wages have not increased.”