It’s a time of reflection and anticipation at The Fintech Times throughout December, as we look back at developments and trends over the last 12 months and forward to the year ahead.
We’re excited to share the thoughts of fintech CEOs and industry leaders from across the globe to 2023’s key takeaways and what we should expect to be top of the agenda in 2024.
Today our fintech leaders highlight the growing trend of employers focusing on financial wellness and development programmes for their employees.
In periods of high inflation, individuals are experiencing rising living costs, increased costs of goods and services and higher interest rates on existing debts, says Einat Steklov, CEO and co-founder of Kashable, a fintech providing socially responsible financing solutions for employees.
“In times like these, we see an increasing number of employers enhancing their benefits with a financial wellness aspect to support their employees. Employers are bolstering their benefits by providing more financial education, coaching, and low-cost loan programmes.
“These programmes are carefully vetted by employers to ensure access to responsible credit while also providing a secure mechanism for employees to repay their debt directly from their paycheck.”
Responsible on-demand pay
Tal Clark, CEO of Instant Financial, stresses the importance of educating employers about earned wage access (EWA) and its benefits.
“Earned wage access continues to be a concept employers need more education around,” he says. “There is still so much ‘green grass’ available across many verticals since it’s still so early in the market. With responsible on-demand pay, employers can give all employees more control over their financial wellness and simultaneously reduce the pressure on payroll professionals caused by increased turnover and new hires.
In 2024, we’ll continue to see growth in the payroll segment. Tip payouts and tips management will move faster in the restaurant space than EWA in other verticals. There will also be opportunities to use the platform we have built to manage other types of payouts across new verticals.
“As the workplace evolves, employees will continue to pursue a flexible work environment, competitive compensation and the opportunity to craft their benefits, including their compensation.”
Become smarter about rewards
Companies are adapting their reward strategies to changes in the tech industry, such as AI, to remain competitive, comments Jeremy Beament, co-founder at financial wellness company nudge.
“Advancements in AI suggest a rapid evolution that will transform the world significantly within the next five years. At nudge, we are working to stay ahead of the curve by developing our impartial financial education platform to include AI coaches.
“Users will be able to choose an AI coach with a customisable gender, ethnicity and language – as we know from our research that people prefer to learn from people like them. These AI coaches will absorb vast amounts of our proprietary financial education and engage in natural conversations to provide financial wellbeing support 24/7.”
Tools on the rise
Luis Valdich, managing director and head of global fintech investments at venture capital firm Citi Ventures. also expects a growth of workplace financial wellness tools to alleviate the heightened degree of consumer financial stress resulting from record-high amounts of outstanding consumer debt and decades-high interest rate levels.
“The adoption of workplace financial wellness tools will skyrocket as employers seek to differentiate themselves by offering superior tools to help their employees address these growing pain points.
“Multiple categories of startups can serve this need, such as providers of early wage access, tax-advantaged benefits, retirement savings, personal financial management, and financial, tax and estate planning services.”
Matt Russell, CEO at employee benefits technology company Zest, highlights the difficulty in awarding salary increases in 2023 and the importance of employee benefits to attract and retain talent.
“With businesses facing a variety of increased costs, awarding salary increases to employees has been a challenge,” he says. “However, given 2023 has been a candidate-driven market, businesses have had to find cost-effective approaches to attract, motivate and retain talent – many have opted to do this by investing in their reward strategies.
“Employee benefits now play a critical role in the overall renumeration strategy, with 42 per cent of employees stating that benefits are their most important consideration when seeking a new role.
“With 29 per cent of businesses unable to raise salaries in line with inflation, offering a personalised, flexible, and targeted benefits package to prospective employees could be the cost-effective approach to attract and retain talent businesses need.
“As we enter 2024 and employee expectations continue to rapidly, employers will need to look for new strategies to stand out from competitors. People want relevant benefits, so personalisation should be a key point heading into the New Year – however, currently just 36 per cent of businesses say this is priority.
“This could range from targeted financial support to ease cost of living pressures to flexible working hours – even the most cost-effective benefits can be incredibly effective if the solutions are tailored to the individual. Those that manage to do this will not only reduce overall costs but also boost employee morale and ultimately productivity.”
Talent at fingerprints
Providing employees with opportunities for skill development and career growth is also a valuable benefit, suggests Fred Voccola, CEO at Kaseya, an IT software provider.
“Everyone loves to complain about a talent pipeline – but so few leaders are doing something, or anything, to fix it. Just like CEOs should encourage their teams to be solution-oriented at all costs, they need to take their own advice and invest in multiple ways to address the labour needs of their businesses.
“One often overlooked tactic is the good old fashioned, ‘grow your own’. Invest in people early as opposed to relying on headhunting talent from other companies and have a very strong internal talent growth and development programme.
“Not only does it offer an alternative to hiring job hoppers who will hop again shortly after being hired to their firm, but it creates a loyalty and a mutual reliance between the employee and the company, that creates not only a great workforce, but also a great company culture – one of reward and meritocracy.
“This type of strategy focuses more on the individual’s core skills potential, rather than their experience only. We will see this manifest in many ways. We’re going to see more retail and customer service people heading to high-powered sales jobs.
“More university graduates will head straight to engineering and customer success jobs where they already have much of the required tech skills needed, mostly through certifications. If we’re doing it right, gone are the days of only relying on headhunters and internal recruiting teams to poach talent at an ever-increasing price from within the industry.
“Rather, new opportunities will be created for an often-overlooked segment of the employee base, that only needs mentoring and development to become the core of any company’s workforce.”