Photo by Joachim Schnürle on Unsplash
A new report from PYMNTS.com and LendingClub found that nearly two-thirds of the US population — about157 million adults — are living paycheck to paycheck. Compared to a year ago,that's up 9 percentage points from 52% in April 2021 to 61% in April 2022.
The last few months have made life even more expensive toyour critical employees. When a majorityof them are already living paycheck to paycheck, that paycheck is buying farfewer things now than it was at the start of the year.
Due to record high inflation that hasn’t been seen in four decades, everything is now more expensive.
Here’s a look at how prices of carious goods and services have changed in the last 12 months (as of May 2022).
Which means, a number of your employees are likely to be cutting back on critical things they need to buy (affecting their quality of life), or borrowing more now to meet the same expenses and losing more money in interest and fees. Many times, they end up borrowing from expensive sources such as holding over credit card balances, or going to a payday lender.
Now is the time they need help from their employers.
Here are 3 strategies that employers are using to help their employees fight inflation while it lasts.
Making them wait a full week or two weeks often causes them to hold off spending, or more often the case, borrow to spend before they get their paychecks. Give them access to a solution like River, where they can get access to their earned wages whenever they need it. It helps them better manage their expenses, especially now when every dollar they earn gets them less in the market but borrowing costs them more than ever.
This really needs to be every employer's first step. It's a no-brainer; it's already their money.
The surest way to help your employees is to pay them higher wages, so that the wages account for inflated price of goods and services. Many of our partners are investing in wages so that their employees see sustained improvements.
However, businesses usually need to go through a time-consuming process to sign off on this, and more often than not, whatever is approved generally falls short of what is truly needed.
It is understandable –businesses sometimes can’t afford a 10-20% pay raise across their workforce.
This helps keep your wage levels intact, and gives much needed capital infusion to your employees to fight inflation.
You can use the time you get to measure and increase wages once inflation settles down and there’s better data on what raise is necessary and sustainable.
At River, we help you help your employees build real Financial Wellness.
From getting them paid when they need it, to helping them better manage their expenses, to building and automating their saving and investing habits, and much more, River is designed from the ground up to transform the financial trajectory of your employees.
Learn how River works. Reach out to us for a free demo; say hello@GetRiver.co or contact us here.