Sabina Bhatia, Chief Customer Officer at Payactiv, was interviewed on Mission Matters Innovation Podcast by Adam Torres.
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Sabina Bhatia says her mission is to help the millions of Americans living paycheck to paycheck support themselves and their families through prompt access to wages and smart financial tools.
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Recruitment challenges in the COVID-19 era
Recruitment has become a huge challenge for employers over the past two years, Bhatia notes. “We talk about how we impact turnover, but our clients interrupt me and say, ‘Sabina, we can’t recruit. What can I do to attract workers to my business?’”
The unemployment rate in America in October was 6%, she notes, due in part to people feeling unsafe or unfairly compensated should they return to low-paying, customer-facing jobs while the pandemic persists across the US. Among the hardest-hit sectors are retail and warehousing/logistics.
“We believe that one of the ways for businesses to entice people to join their team… is to re-look at their employee benefits offerings,” Bhatia says. “The good news is that this doesn’t involve a great deal of time and money, and it can be implemented quickly.”
A survey from CareerBuilder found that 78% of Americans currently live paycheck to paycheck, including 9% of those who earn a six-figure income with expenses to match. The opportunity to help millions of working Americans who are struggling to support their families each day post-pandemic, Bhatia stresses, is tremendous and urgent.
What is Payactiv?
“We help companies understand the concerns of their employees and work with them to build solutions,” Bhatia says. “Companies that offer Payactiv have seen significant improvements in recruitment, retention, and engagement, saving them millions in operating costs.”
“Safwan Shah, our CEO, invented Earned Wage Access (EWA) and launched Payactiv over a decade ago to improve the financial stability and livelihood of the paycheck-to-paycheck worker, what we call ‘the underserved,’” Bhatia explains. “Payactiv is the partner of choice for more than 1,500 businesses seeking to help their people fully engage in work and life. Our all-in-one livelihood platform takes a holistic approach to improve financial wellness. It has helped employees save more than $400 million by avoiding unnecessary payday loans, overdrafts, and late fees.”
In short, Payactiv offers prompt wage access, a process through which a worker doesn’t have to wait weeks for their paycheck, but rather, can collect wages on demand as soon as they’re earned.
How Earned Wage Access solutions work
On-demand Earned Wage Access (EWA) solutions are becoming an increasingly important aspect of the benefit packages provided by companies seeking to ramp up their hiring efforts, and they can be especially useful as holiday hiring season approaches. EWA services provide flexible payment models so that employees can access the pay they’ve earned through pre-payments in advance of their regular paycheck, typically arranged for a small fee.
Bhatia says 95% of hourly workers are interested in working for an employer that offers EWA. 89% of hourly workers are willing to work longer for an employer that gives EWA, and 79% say they’re ready to switch to an employer that offers EWA.
For decades, Bhatia notes, most hourly workers didn’t enjoy the same perks as their full-time salaried counterparts. But the pandemic turned this paradigm on its head, and hourly workers are now in short supply. Employers have to rethink the way they attract, reward, and retain skilled employees, Bhatia says, and EWA is a straightforward way to do that. She notes that the best EWA providers provide a free option for accessing funds, keep their fees to a minimum, and are not transactional.
For its part, Payactiv—which has been a Certified B-Corp since 2015—provides the ability to load earned wages onto a prepaid or payroll card, transfer money to a debit card or bank account, withdraw wages in cash at Walmart, pay directly for Uber rides or Amazon purchases, or pay bills directly through the Payactiv app.
How does this help employers and employees alike in the long-term?
“Our technology enables companies of all sizes to help their employees be less stressed and lead more productive lives,” Bhatia says. “To many hourly workers, financial wellness is something they hope to achieve someday but don’t have the tools to get them out of the suffocating cycle of debt and having enough to set aside for a rainy day.”
“Our goal is to serve all these hard-working Americans suffering unnecessarily due to outdated payroll technologies or systems that have boxed them into a category of ‘unqualified’ for essential financial services and put them at risk of being trapped by high interest and payday loans,” she continues.
“Those businesses that have mastered the art of building a compelling and authentic employee value proposition see the results in terms of a strong employer brand. A modern definition of an employee value proposition would be: ‘A mutually beneficial and rewarding ecosystem of support, recognition, and values that an employer provides to its people to allow them to achieve their greatest potential at work.’ Payactiv bridges the gap to financial wellness through innovative financial management services, access to a discount marketplace, and partnering with employers to speed up workers’ access to the money they earn each day.”
What’s next for Payactiv and hourly wage access in the US:
In 2020, there were 73.3 million hourly wage workers in the U.S., representing around 51% of the total workforce. “Hourly workers are the backbone of the economy,” Bhatia says. “During the pandemic, the importance of the work they do only became amplified. They MUST benefit from the growth of the economy that they’ve built. To make this a reality, we’ve created a platform that meets the short-term needs of the hourly worker and the long-term financial success of the workers so they can finally live the life they’ve earned.”
Bhatia notes that there’s no turning back from the paradigm shifts brought about in 2020. Companies that were slow to adopt technologies supporting remote work or create clear rules and secure structures around gig workers are playing catch-up, she says. “Optimizing the hybrid workplace requires accelerating investments to support virtual collaboration, creativity and access to on-demand wages. Employers will have to recognize that workforce needs and flexibility have shifted.”