Salary Advance Schemes are apparently the latest employee benefit currently trending in big business. According to People Management magazine several companies including ASDA and Bupa are attempting to combat the cost of living crisis by allowing employees to access 25 per cent of their salary early each month for a small set fee.
While this sounds like a good short term fix, it does make me wonder whether and crucially how finance / HR departments will monitor the monetary wealth of every single employee. Of course in house records can show how often an employee accesses a benefit, but how does the company ensure the employee is not getting further and further behind each month? Currently there isn’t any regulation around how this benefit is policed. How will companies manage if an employee gets themselves into serious debt or is using the advance in an unethical way? Will they provide debt management workshops?
Perhaps companies need to think more creativity around ensuring that employees have the skills to budget manage by offering workshops or by undertaking an audit of the current benefits package switching less desirable and expensive options to small uplifts in salaries for certain times of year. Or perhaps an annual salary could be apportioned differently allowing sightly higher monthly payments from say November to March…?
Salary Advance feels a bit like a slippery slope and could potentially trap already vulnerable people in a vicious cycle. For me, this one is a hard No.
If you’d like to shake up your benefits or understand how rewards could enhance your employee motivation, experience and retention. please get in touch with me – lorraine@utterclub.com