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Improving the employee experience with financial well-being apps: Part 1 of 2

Now that open enrollment is over, employers are turning their attention to starting 2020 with a fresh set of benefits to engage the workforce. Forward-thinking employers have recognized that the entire employee experience needs focus and that financial wellness is one of the most asked-for benefit by employees. These companies have added financial wellness components to their slate of overall wellness benefits.

In January, SAP will launch FlexPay by SAP, an on-demand pay solution designed to help employees address their financial needs and to help employers tackle their turnover and recruitment challenges.

In addition to providing on-demand pay options for employees, FlexPay by SAP general manager Marcus Krug decided it was vital to give employees the necessary tools and information to help them make smarter decisions around money.

That’s why FlexPay by SAP has joined forces with Best Money Moves, an award-winning financial wellness technology platform that helps measure employee financial stress and then uses artificial intelligence to match employees with relevant and contextual information, tools, calculators and solutions.

I sat with Best Money Moves founder and CEO, Ilyce Glink, and Krug to learn why 2020 is the right time for employers to add this killer financial wellness combination. Note that these solutions are initially targeted at the US market:

Q: Why has financial wellness become an issue for employers?

A: Marcus Krug: Financial issues are increasingly becoming problematic for employees and employers are acutely aware of these issues. According to the 2018 Financial Health Network baseline study, more than 138 million Americans struggle with at least one aspect of their finances and more than 42 million Americans experience issues with all, or nearly all, aspects of their financial lives. According to the Federal Reserve Bank, two in five Americans cannot afford a $400 emergency expense, such as an unforeseen medical bill.

Americans are struggling financially

When employees cannot pay expenses in time, they overwhelmingly turn to credit to make ends meet. Today, more than 30 percent of Americans say they have more debt than is manageable. Fees for late payments and short-term credit pile up quickly. In 2016, Americans paid more than $39 billion in fees and interest for single payment short-term loan products, such as overdraft and payday loans. This equates to more than $800 annually. As a consequence, employees are increasingly financially stressed.

Q: What is FlexPay by SAP and what problem does it solve for employers?

A: Marcus Krug: FlexPay by SAP is SAP’s new on-demand wage payment solution designed to help employees address their financial needs while helping employers tackle their turnover and recruitment challenges. It allows employees to access parts of their accrued net wages ahead of payday through the FlexPay by SAP app, enabling them to pay their bills on time and avoid costly late fees, overdraft fees and payday loans – completely free of charge for the employee. Payments can be transferred to an employee’s bank account instantly and just one such payment can help employees save fees that could easily have been between $10 to $60, or even higher. As a consequence, it allows employees to decrease their financial stress levels significantly.

FlexPay by SAP is fully integrated with the SAP SuccessFactors suite as well as third-party solutions for core HR, payroll and time and attendance systems. This enables employers to calculate an employee’s available balance and advance the funds to employee in collaboration with top-tier financial partners. FlexPay by SAP is completely automated for the employer and does not create any overhead. Payroll continues to run as usual and there is no implication on cash flows.

Q: What is Best Money Moves and what problem does it solve for employers?

A: Ilyce Glink:  Best Money Moves uses artificial intelligence, gamification, and high-quality written and video content, tools and calculations to help employees get control over their personal finances. Employers give it to their employees as a benefit, in order to reduce financial stress and increase overall financial well-being and see high-level analytics that help them understand more about what their workforce is experiencing and suggest ways to help. In addition to a tremendous amount of out-of-the-box configuration, Best Money Moves can even ingest a company’s benefits, tag them for search and points, and deliver them to employees in a contextually relevant way.

Best Money Moves is available through the SAP App Center, and can be purchased in combination with FlexPay by SAP, or on its own. Employers license the solution for their entire workforce, but can group employees to address financial stress in a more segmented way. The platform can be purchased as technology only, or with our live money coaches and credit scores. Next year, we’ll introduce the ability to connect to your bank and credit card accounts, and download purchase records directly into the system.

The goal is to lower financial stress, providing all of the other benefits Marcus talks about. When employers empower their employees with the tools to address financial stress head-on, the ROI for the workforce are tremendous. Financial wellness results in higher productivity, lower turnover rates and all around happier, healthier employees. Everybody wins. This is just one very important aspect of human experience management.

To learn more about SAP SuccessFactors Human Experience Management Suite (HXM) tap into the HXM Digital Summit for on-demand webinars, research, articles and more.

This post is part one in a two-part series about the way FlexPay by SAP and Best Money Moves are revolutionizing financial wellness for employers and their workforces. Read more about the direct ROI you could see from this killer financial wellness combination in Part Two.

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  • Hi Kim

    Has there been any assessment about the legal status of the cash-in-advance with the relevant country authorities? For example, with government real time reporting in Australia of “payments subject to withholding”, there are exclusions that are not currently accommodated to meet the legal requirements – such as the SAP off-cycle on demand. This is because the legal requirement is to report the payment “on or before payment date”. It needs a separate and discrete cluster to meet the legal obligation.

    Is that satisfied by this solution?

    If not, then that is a non-compliant solution that would require manual corrections every pay, else expose the customer to penalties from the regulator.

    I really like the SAP offering in comparison with 3rd party solutions integrated with SAP, but the exposure to non-compliance is my biggest concern.

    I’d be interested in that status, if you are aware of it. If not, who in SAP would be aware of the legal status for the relevant countries?

    Thanks – Deanne