Customers Say Access to Purchasing Power Reduces Financial Stress
Press release from the issuing company
Thursday, April 19th, 2012
The economy continues to impact employees with varied financial consequences, forcing many people to turn to their employers for financial safety nets, such as access to personal insurance, the purchasing of household products, and receiving professional financial advice. Increasingly, employers are offering non-traditional voluntary benefits to meet their employees' financial needs. Forty-four percent of employers that offer an employee purchase program do so because they believe it helps fill financial gaps for workers during tough economic times, while 67 percent say it enhances their benefits package, according to survey results published in "The Power of Employee Purchase Programs: The Next Generation of Voluntary Benefits" the first white paper released in the "The Power Behind the Purchase" series today by Purchasing Power, LLC. The company is an e-commerce business that offers customers of its employee purchase program the opportunity to purchase big-ticket items using payroll deduction.
Fifty-eight percent of employers surveyed by MetLife in 2011 say that financial "illness" contributes to employee absences at their companies, and 78 percent agree that worry about personal financial problems during work hours distracts employees to the point that they are less productive. Voluntary benefits can provide a financial safety net for employees. In a recent survey of Purchasing Power customers, 94 percent of respondents agreed or somewhat agreed, that having access to the Purchasing Power employee purchase program helps to reduce their financial pressures and stress.
As these benefits are deployed through the workplace, not having access to this type of program is an issue that prevents many workers from using them. In a separate study recently conducted online in January by Harris Interactive on behalf of Purchasing Power, LLC among 2,099 U.S. adults age 18+, of whom 700 were employed full time and/or their spouses are employed full-time, 74 percent of these workers/spouses of workers say they do not have access to an employee purchase program at work.
Credit cards still reign as the preferred financing option, with 60 percent of full-time employees and/or those whose spouses are employed full time saying they are at least somewhat likely to make purchases using credit cards, even though perhaps many are more than likely still working to pay them off. Interest in purchase programs definitely exists among employees, with 37 percent of U.S. adults who are employed full-time and/or whose spouse is employed full time saying they would be "at least somewhat likely" to use employee purchase programs for purchases if their employer provided access to them. And many employers are listening. According to an Employee Benefits News survey in December 2011, forty-four percent of HR professionals offer this benefit because it was requested by employees.
"An employee purchase program is an extra benefit that costs the employer nothing, but provides a great option for employees," said Dale Smith, Senior Benefits Consultant, Summit Safeguard. "Many employers know that their workers are struggling, and this type of program provides them the option of purchasing a variety of different products at a reasonable price without the expense of rent-to-own or other high-interest plans."
The survey conducted by Harris Interactive also finds that among workers who are at least somewhat likely to use an employee purchase program but either self or spouse do not, or are not sure if they have access to the program, cite access to products they otherwise could not purchase (57 percent), the ability to implement a more disciplined budget (51 percent) and increased workplace productivity by reducing financial concerns (e.g., able to purchase products like refrigerators or washers/dryers through payroll deduction)(46 percent), as the top three benefits of using these programs. This group also noted that this program might help reduce stress (36 percent), balance work-life by enriching time spent with their family (e.g., enjoying cameras, televisions, video game systems, and other electronics with my family) (30 percent) and further their careers or those of other family members (e.g., go back to school, take online training classes).
While employers acknowledge that financial stress has an effect on their workplace, only 17 percent of respondents to an Employee Benefits News survey, currently offer an employee purchase program. A general lack of knowledge and misconceptions seems to exist among employers about these programs. Employers are no longer exposed to unwanted liability and administration.
"From an operational perspective, as far as my staff and our hospital is concerned, we do very, very little," said Eileen Brown, Director, Recruitment & Benefits, Valley Baptist Healthcare System. "Purchasing Power really takes the burden of most of the work."
As healthcare and other costs maintain momentum, employees will continue to turn to the workplace for benefits and other financial safety nets due in large part to the choice, cost savings and convenience this channel offers them. Employee purchase programs, in particular, have proven to be viable, cost-effective alternatives to other consumer purchase plans, such as rent-to-own. And, with a Nuclear Engineering International article projecting that Generation Y will account for nearly half of all employees worldwide by 2015, predictions indicate this generation will be the first in more than a century that is unlikely to be better off financially than their parents.
Employers simply cannot afford to ignore Gen Y workers—or any other employees who might be struggling financially. Financially secure employees are more productive workers. Providing employees with year-round access to responsibly purchase much-needed household items enables companies to build a solid foundation of financial wellness for their workforce.