SHRM Rolls Out Payroll Delivery Service to Boost Flexibility, Inclusion

​The Society for Human Resource Management (SHRM) this week introduced a prepaid debit card and mobile app to provide employees quick access to their earnings and a gateway to better financial well-being through digital money management.Employers can use the SHRM PaySolution Enabled by Money Network® as a convenient, streamlined and flexible payroll service. Along with creating efficiencies in how a business distributes payroll, the solution also promotes financial inclusion, literacy and wellness among employees. SHRM launched the product at its INCLUSION 2020 virtual conference. SHRM PaySolution, offered through Money Network from First Data, now Fiserv, gives employees access to their pay through a prepaid Visa debit card and patented checks, with earnings electronically available up to two days faster* than most other payroll options. "There's a lot of talk right now about equity, but how do you build equity into the DNA of organizations?" said Adam Sohn, SHRM's chief growth officer. SHRM PaySolution offers a way to help workers, especially those without access to a bank account they can use for direct deposit, to catch up and become part of the digital economy, he said."Using paper checks in a digital economy is going to leave a lot of people behind, and that has to change," Sohn said.Companies can offer 100 percent paperless payments, except in states requiring paper checks, and workers get no-cost, penalty-free electronic access to their wages. Employers may also provide employees with off-cycle payments through SHRM PaySolution, which complies with wage laws in all U.S. states.Employers also may improve employee satisfaction, retention and productivity through the offering, Sohn said, citing a survey finding that more than half the workforce, or some 88 million Americans, report spending time at work tending to personal finances."Financial literacy really brings a peace of mind to people that allows them to focus on their work [and] be more productive," Sohn said. "This can be a game changer, and we're really proud to be launching a program like this with Money Network and Visa."Dom Morea, senior vice president and head of prepaid solutions at Fiserv, echoed that view."The ability to enhance the employee experience by providing faster access to wages through a digital payroll delivery service can be a powerful differentiator for employers operating in today's digital-first world," Morea said. "SHRM PaySolution provides SHRM members access to the latest in digital payroll technology so they can streamline payroll administration within their own businesses while also empowering employees with ease of access to their hard-earned wages." Creating Access to Digital BankingWhile talking with Visa executives about ways to improve workers' financial health, Sohn learned that roughly 20 percent of Americans are either unbanked (without an account at all) or underbanked (they have an account but also rely on expensive and time-consuming alternatives like payday loans)."That statistic shocked me," Sohn said.A 2017 Federal Deposit Insurance Corp. survey found that nearly 32 million U.S. households are considered unbanked or underbanked. People without access to traditional banking can face a myriad of problems, including losing a significant percentage of their money to check-cashing services and experiencing greater barriers to obtaining credit, Sohn noted. "It also creates safety issues," he said, explaining that in working-class communities, criminals "know when those check-cashing lines are forming on Friday evenings."Economic and employment uncertainty surrounding the coronavirus pandemic has made lack of access to digital banking an even more pronounced problem, Sohn said. "Getting faster access to your income becomes more important," he said.The Federal Reserve reported that "substantial gaps in banking and credit services exist among minorities and those with low incomes." While 6 percent of adults are unbanked, the numbers are 14 percent for Black individuals, 23 percent for Hispanics and 4 percent for white individuals, according to the 2018-2019 Fed report on the economic well-being of U.S. households.Thirty-five percent of Black individuals and 23 percent of Hispanics had a bank account but used alternatives like money orders and check-cashing services, compared with 11 percent of white individuals, the Fed reported."Those check-cashing places take a pretty significant chunk out of your money," Sohn said.Growing up in a working-class family in Yonkers, N.Y., Sohn would line up at a check-cashing establishment with checks he earned from his first jobs in the Bronx. He had no banking account, and the check-cashing outlets would take 8 percent to 12 percent of his pay, he recalled.At the time, he was a teen without a family to support, but he noticed that most people in the line were adults.Today, payroll debit cards combined with a mobile app offer a way to bring unbanked workers into the digital economy. "Cellphones open the door to so many learning opportunities" and can help workers improve their financial literacy, he added, noting that SHRM is working with Visa and Money Network to develop financial literacy content for employers to share with employees."These are the motivations for us to take a look at this sector," Sohn said.Dinah Wisenberg Brin is a freelance reporter and writer based in Philadelphia * Faster access to funds is based on a comparison of electronic direct deposit policy for ACH deposits versus traditional electronic banking practices and the deposit of paper checks. Direct deposit and faster availability of funds are subject to the payer's support of the feature and timing of payer's funding.