Today at the HR Tech 2019 conference, PayActiv, the leading provider of affordable access to financial services, announced the results of its latest survey on employee retention. The survey found that over 81% of respondents said that they were more likely to stay in their role because of the PayActiv Benefit. Respondents surveyed include more than 5,000 shift workers across 209 businesses.
The PayActiv Benefit is an employer-sponsored financial wellness offering that includes flexible and instant access to earned but unpaid wages together with a growing suite of additional services like Uber rides, Amazon purchases, savings and budgeting, financial counseling and literacy and more.
With the lowest rate of unemployment in 50 years, most US businesses are struggling to retain employees. According to the Work Institute, the annual turnover cost in the US was over $617 billion in 2018 and more than 75% of that cost, or $479 billion, was preventable. The study also categorized several preventable categories and themes for employee turnover, which include compensation and benefits (10%) and well-being (9%). In addition, the study showed that employee turnover is the highest in the first year and up to 65% in the first 180 days.
Safwan Shah, PayActiv Founder and CEO, said, “Employers who offer PayActiv Benefit see increased retention rates and reduced turnover. This survey demonstrates that offering critical employee benefits – such as PayActiv – provides a valuable service for employees that make them significantly more likely to remain in their role.”
The PayActiv Benefit has proven to be the most direct way to reduce turnover for paycheck-to-paycheck workers, and it was the subject of a study by researchers at Harvard Kennedy School in 2018. This landmark study found that the PayActiv Benefit of flexible access to already earned wages reduced turnover by up to 30 percent.
Today, more than 500 businesses in a range of industries including healthcare, retail, and hospitality, offer PayActiv. While the service is available to all employees, use of the service is voluntary, with 30 to 40 percent of an employers’ eligible users typically using the service. At no cost to the employer, PayActiv integrates directly with major payroll systems. PayActiv is also a marketplace partner of ADP (NYSE: ADP), the largest payroll processor in the world and is available to over 600,000 businesses that use ADP for payroll needs.