Providing a liquid, high-quality emergency savings option through the workplace is key to improving financial security and building wealth for workers living on low and moderate incomes (LMI). It is also of great value to companies as emergency savings3 reduces the financial impact of unexpected expenses and helps mitigate the financial insecurity that fosters chronic stress among workers, which costs employers $250 billion a year in reduced productivity. However, many companies and financial wellness experts are not aware of high-quality emergency savings solutions easily available to them already (e.g., in and around the payroll space).
In our latest webinar, How Payroll Providers Can Advance Worker Emergency Savings, supported by BlackRock’s Emergency Savings Initiative, we were joined by executives from BlackRock, ADP, AutoNation, and Commonwealth for a rich discussion about our newly published case study, How ADP’s Solution Facilitated $1.5 Billion in Emergency Savings, that demonstrates that payroll service providers are uniquely positioned to help companies of all sizes provide quality financial security solutions to their employees.
BlackRock Managing Director, Social Impact, Claire Chamberlain spoke with Anurag Chandra, Division Vice President, Strategy & Business Development, ADP; Nick Maynard, Senior Vice President, Commonwealth; and Nancy Weis, Senior Director, Retirement, Benefits Financial Reporting and Relocation, AutoNation. The conversation centered around how high-quality emergency savings features deployed in the payroll space could meet the needs of workers living on LMI and how companies can partner with payroll service providers to provide innovative emergency savings products to their employees.
Here are three key takeaways from the webinar:
- Payroll is a powerful tool that HR and benefits teams can leverage to help employees build emergency savings.
ADP—the nation’s largest provider of payroll services, reaching one in six workers in the U.S.—offered a high-quality emergency savings3 option through its Wisely® card¹ and myWisely® mobile app². As part of BlackRock’s Emergency Savings Initiative, ADP in collaboration with Commonwealth, added enhanced high-quality savings features available to all Wisely cardholders, offered through the myWisely mobile app, which resulted in increased savings to over $1.5 billion and 2.7x higher net inflows. This demonstrates the ability of well designed high-quality payroll tools to help employers support their employees’ savings and financial wellness needs. As Anurag Chandra said, “That moment of truth of the payday every Friday becomes a really important day in the lives of all these workers. We want to take advantage in the right way of providing them the right tools on that day to make the right decision—to save or spend.” HR and benefits teams have the opportunity to leverage this crucial payment moment to help their employees build emergency savings.
- One size solution doesn’t work for all employees—a large employer is offering a mix of payroll and retirement linked solutions to meet diverse needs.
As part of Blackrock’s Emergency Savings Initiative, Commonwealth partnered with AutoNation, a large employer, to launch an innovative, multi-solution employee emergency savings program. Nancy Weis noted, “We learned that our population has very different needs and views on what a good program or a beneficial program for them would look like.” They launched a three-pronged approach leveraging AutoNation’s payroll systems including the split deposit functionality, and ADP’s Wisely card¹ and myWisely app², and a third option within the 401(k) plan through Voya, another partner in Blackrock’s Emergency Savings Initiative. Weis hopes that through their comprehensive program, “everyone can find a program that will fit their needs”
- There is a need for evidence-based strategies that drive employee savings.
Nancy Weis mentioned, “We saw a trend that more and more employees are looking to their employers to help them save.” As employers increasingly seek to meet their employees’ needs, this webinar and Commonwealth’s work as part of Blackrock’s Emergency Savings Initiative offers rich learnings around program design to drive savings behavior. Commonwealth, BlackRock’s Emergency Savings Initiative, and field research indicates that people living on LMI desire emergency savings accounts with no fees, no minimum balances, and immediate liquidity. Building off these baseline high-quality features, additional research-based enhancements including envelope customization, automation, and gamification drove build/use/rebuild savings at ADP. As Nick Maynard mentioned, “[Our research] demonstrates that folks who live on low to moderate incomes can and will save when high-quality, research-backed features are made available.” Savings can be further increased by targeted inclusive messaging from emergency savings solution providers and employers—we saw messaging pilots at ADP drive a 23% boost in savings, and as high as a 35% boost at one employer. Claire Chamberlain noted our research with ADP, saying how the strong results demonstrate that well-designed solutions can be very effective, and it shows that “it wasn’t a lack of education, it was a failure of product offering.”
A recording of the webinar is available on Commonwealth’s website.
To learn more about our research, read our newly published case study, How ADP’s Solution Facilitated $1.5 Billion in Emergency Savings
About BlackRock’s Emergency Savings Initiative
BlackRock announced a $50 million philanthropic commitment to help millions of people living on low to moderate incomes gain access to and increase usage of proven savings strategies and tools — ultimately helping them establish an important safety net. The size and scale of the savings problem requires the knowledge and expertise of established industry experts that are recognized leaders in savings research and interventions on an individual and corporate level. Led by its Social Impact team, BlackRock is partnering with innovative industry experts Common Cents Lab, Commonwealth, and the Financial Health Network to give the initiative a comprehensive and multilayered approach to address the savings crisis. Learn more at www.savingsproject.org
¹The Wisely card is a prepaid card, references to digital account are referring to the management and servicing of your prepaid card online digitally or through a mobile app. The Wisely card is not a credit card and does not build credit.
²Standard text message fees and data rates may apply.
³Amounts transferred to your savings envelope will no longer appear in your available balance. You can transfer money from your savings envelope back to your available balance at any time using the myWisely app mobile app.
The Wisely Pay Visa® is issued by Fifth Third Bank, N.A., Member FDIC or Pathward, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. The Wisely Pay Mastercard® is issued by Fifth Third Bank, N.A., Member FDIC or Pathward, N.A., Member FDIC, pursuant to license by Mastercard International Incorporated. The Wisely Direct Mastercard is issued by Fifth Third Bank, N.A., Member FDIC. ADP is a registered ISO of Fifth Third Bank, N.A., or Pathward, N.A. The Wisely Pay Visa card can be used everywhere Visa debit cards are accepted. Visa and the Visa logo are registered trademarks of Visa International Service Association. The Wisely Pay Mastercard and Wisely Direct Mastercard can be used where debit Mastercard is accepted. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.
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