PIMA COUNTY, Ariz.—More companies are using payroll loans and advances as incentives for their workers, the Wall Street Journal reports, including Walmart and Pima County, Arizona. The two have begun offering those services as a way to help employees who are experiencing cash-flow problems.
“Employers have woken up to the fact that a majority of workers are having a lot of trouble simply getting by, never mind getting ahead,” said Sophie Raseman, head of financial solutions at Brightside, a financial guidance company co-founded by Comcast Corp.
According to a 2018 Employee Benefit Research Institute survey, 12% offered an advanced pay option, and the same percentage gave short-term loans that were repaid via payroll deductions. An additional 4% and 6%, respectively, will be offering those services soon.
Employers are using these services to help with retention and productivity. In 2017, Walmart started offering advances on paychecks, which has led to its employees using payday loans and bank overdrafts less, according to David Hoke, who heads the retailer’s health and well-being department.
Pima County has given its workers access to Kashable loans for three years. Richard Elías, Pima County supervisor, stated regarding the service, “Anything we can do to make the economic lives of our workers more stable benefits us” in more productivity and retention numbers.