As cost of living, worker shortage take hold, this app’s keeping employees healthier, wealthier and money wise

• Wagestream experiences unprecedented demand for its employee financial wellbeing tools as cost of living bites
• Crippling labour crisis hitting Australian workforces sees employers working to increase their value proposition
• National Retail Association says support to help struggling workers through cost of living crisis is critical

Financial super app for wage earners Wagestream is experiencing unprecedented demand for its employee financial wellbeing tools from employers looking to help their workers with rising costs of living pressures.

Barbeques Galore is the latest organisation to adopt Wagestream to ensure their employees are financially literate and able to cope with extra hits to the hip pocket.

Known best for working with employers to enable salary advances for workers, Wagestream Australia co-founder and CEO Josh Vernon told Stockhead other companies to adopt the platform include Bupa, Hungry Jacks, JD Sports, Pizza Hut and Carnival Cruises.

He said a crippling labour crisis hitting workforces Australia-wide has also seen employers wanting to increase their value proposition and become attractive places to work with Wagestream access one way to bolster their appeal.

A Wagestream survey of more than 1,000 Australians revealed that four in five could feel more positively about an employer who offered financial wellbeing tools.

Furthermore 56.7% of respondents would “think more favourably of my employer” if they offered engaging financial education tools, and 47.5% would be “incentivised to stay with my employer” if they were supported with financial wellbeing programs.

“The labour market is the tightest it’s been in decades and cost of living pressures are affecting all employees so our ability to support a worker manage their money and in turn help employers improve their value proposition is creating a surge in demand,” Vernon said.

“Employers have an obligation to pay fairly but increasingly great employers are going the extra mile to educate employees as to how best to manage their money and the financial wellbeing data is very clear that there’s very little correlation between small bumps in pay and an individual’s employees financial wellbeing.

“What’s more important is instilling behaviours that help employees manage their money responsibly.”

Rising costs of living

Australia like many global economies is experiencing levels of inflation not seen since the 1970s as a result of flow on effects from the Covid-19 pandemic, war in Ukraine and strong consumer demand.

The Australian Bureau of Statistics (ABS) reported that the annual Australian inflation rate is 6.1%, which is the highest recorded since 1990 and it is expected to peak at 7.75% by the December quarter.

To put the inflation genie back in the bottle the Reserve Bank of Australia (RBA) has lifted interest rates for the fifth month in a row, increasing the cash rate by 0.5 percentage points to 2.35% at its latest September meeting, a seven-year high.

Everyday goods and services from food, petrol, healthcare and clothing to rent and mortgages has been affected, impacting Australian workers.

“I think even if you look at the US where inflation continues to rise I don’t think the world is at the bottom of that economic curve at this point in time,” Vernon said.

“We just had the Jobs Summit a couple of weeks ago and a lot of those initiatives are fantastic but they won’t be an immediate fix for many industries to get more people in so the two challenges of solving the talent shortage, and employees’ financial wellbeing are even more critical.”

Helping workers out of poverty premium

Wagestream (formerly Earnd) was founded in 2018 in Australia by charities seeking to help financially vulnerable workers. It has expanded overseas including to the US and UK. Vernon said the organisation was essentially established to help workers out of the poverty premium.

“People who get paid less in society often have to pay more for the same goods and services so that’s the mission – to use the power of an employer to help better manager their money,” he said.

“A bank might put a higher risk profile on an hourly paid employee given the uncertainty surrounding their financial situation whereas where they look at an organisation like Barbeques Galore or Hungry Jacks they are much more certain and we aim to leverage that certainty to provide fairer financial services to the underlying employee.”

“Employers know their employees earn money each day but hold it back to align with a fixed pay cycle, so by understanding what an individual earns daily, Wagestream can help them save it automatically or access it when needed.”

He said the five features of the platform include:

1. Track

He said track is about giving workers visibility over earnings in real time and matching that up with open banking data so they can see what they are earning and spending.

“If you’re an hourly worker it’s hard to know what is coming in week by week,” Vernon said.

“This way they can budget more confidently, try to pick up extra shifts when needed.”

2. Access

“Employees can access a percentage of their pay as they earn it so they can budget better and cover emergency expenses,” Vernon said.

3. Grow

“The tool enables automated transfers to savings accounts to help enable employees to reach goals faster,” Vernon said.

4. Learning content

“Provides access to best-practice personalised financial education tailored for employees,” Vernon said.

“If you compare it to what a lot of people get when their super provider comes and gives one topic for both a 60-year-old and 18-year-old, which isn’t very personalised.

“What you can do with data now around personalisation is quite amazing. It might be how to avoid Afterpay late fee to an 18-year-old and have an optimised super to a 65-year-old.”

5. Coaching

“Coaching is helping workers to achieve long-term goals and set themselves up for a better financial future,” Vernon said.

Trying to solve recruitment and retention challenge

Barbeques Galore CFO Mitchell Koureas said retailers across Australia are facing a hiring market that is challenging both recruitment and retention.

“Nationwide staff shortages represent one of the largest challenges facing Australian retailers today,” Koureas said.

“Adjacent to this is rising living costs, with the price of everyday essential items such as petrol, energy, and groceries all soaring in a rather short period of time.

“As an employer, we are in a position to make a real difference by supporting our employees through these challenges.”

NRA backs employee financial wellbeing initiatives

National Retail Association interim CEO Lindsay Carroll told Stockhead support for employees through the cost of living crisis is critical right now.

“We are seeing the increasing costs take a toll on the mental health and productivity of workers, and anything businesses can do to support their staff and retain them is warmly supported by the NRA,” she said.

“We know that most employers are not in a position to extend pay increases, but there are other ways of providing financial support to staff who may be struggling.

“A financial wellbeing program can be a great resource that provides the tools needed to navigate soaring inflation and in turn improve staff satisfaction and productivity.”