Would you see this as providing a financial lifeline or as encouraging budget mismanagement? Let’s look at such a scheme in more detail. Ben, a young man, works as a telephone operator and sometimes takes messages. Today, one of the messages is for him. His widowed mother requires emergency dental treatment. They live from hand to mouth and it is mid-month, with 14 days to go before he receives his salary. What can he do? He is the only child and there are no savings. This twist of fate could end up with him being a victim of a loan shark or getting sucked into a sinkhole created by payday loan companies.
Mary is a single mother of twins. She works as a cleaner and all her wages go towards her ten-year-old twins. Their school has organised a short trip to Paris and the twins need £200 to be able to go. The deadline for signing up is fast approaching, but Mary’s coffers are empty. Her wages are not due until after the departure date. All the twins’ friends are going and say it is the trip of a lifetime.
Instead of such employees getting into debt, what if the organisation they work for has a scheme in place whereby they are allowed to take a portion of their salaries in advance to be set off at the end of the month when their salaries are due? Forget about being overcharged for maxing on credit cards and paying crippling interest rates for a payday loan; instead, this is money they have already earned.
Flexibility towards month-end paydays could be seen as a perk for potential employees, as it is not easy to be prepared for the unexpected. Why not introduce such a scheme for loyal employees? A salary advance in the event of a sudden demand over and above the best-planned budget would help employees such as Ben; what’s more, with no worries over money, he could concentrate better on his work.
As for Mary, being empowered to provide a little extra for her daughters would ensure a happy home. Without financial worries, she could continue to ensure she gives 100 per cent to her cleaning duties.
Implementing such a system is a breeze. There is no need to tap into an organisation’s unwieldy payroll system, with software such as Wagestream and DailyPay available to those who are open to supporting their employees financially. Careful monitoring of the scheme and targeted financial training would ensure success, thus breaking the vicious cycle of payday poverty.
Naysayers may argue that such systems are merely aiding and abetting the employee’s financial ineptitude, but would a lame man keep using crutches once he is no longer crippled?
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