How Staffing Companies Can Increase Revenue While Improving Financial Inclusion

Staffing agencies fulfill a crucial role in business operations, providing staff to organizations all over the world. In 2017, 17 million workers in the United States were hired by staffing and employment agencies, in areas from general labor to clerical, from health care to IT. Businesses can contract an agency to provide staff during busy times, like accounting firms during tax season or construction companies in the summer, without the obligations of direct hiring.

Organizations rely on these agencies to provide labor, and workers, in turn, rely on them not only to find jobs but also to gain training to increase their employment potential. Often used as a stepping-stone to permanent employment, staffing agencies are in a unique position not only as a gateway to workforce inclusion but to financial inclusion as well.

Businesses suffer when employees are underbanked

According to the National Survey from the FDIC, 48.9 million adults reported being underbanked in 2017. This financial exclusion, or “the inability … to access necessary financial services in an appropriate form,” comes with a host of issues that can keep people from succeeding in the workforce.

Underbanked have a harder time acquiring and building assets, especially when their pay is eroded by cheque-cashing fees or the exorbitant rates of payday loans. Unexpected expenses can unfairly set these individuals back, even preventing them from working, perpetuating the cycle of financial distress. Ensuring that these individuals have easy access to their pay and are offered the chance to improve their financial education can make a big difference to their workplace reliability and can provide an incentive for workers to choose to work for one staffing agency over another.

Unexpected expenses unfairly impact the financially excluded

Imagine you’re on your way to work and your car breaks down. You call a mechanic or a tow truck, take a cab to work, and deal with everything later. Now imagine you don’t have a credit card and all the money you have access to is the few dollars in your pocket. Life just got a lot harder.

First, how do you get to work? If you’re incredibly lucky, you call a friend to get you or hitch a ride, but you can’t afford a taxi, and there’s no bus passing by. And what to do with your car? Unless you have a membership to AAA, then you need the money to tow your vehicle and to pay a mechanic, and now you can’t get to work.

An accident, an unexpected medical expense, or the loss of a uniform or theft of work tools can be disastrous for someone without financial options. Access to microcredit for unexpected expenses and emergencies, even in very small amounts, can be a game-changer for someone who has never had that safety net. It can minimize unscheduled absences from work and make employees more focused and reliable.

Can a payment method really be a gateway to economic inclusion?

Ensuring that workers are paid and can access their funds quickly while minimizing losses to services like cheque-cashing agents helps keep employees working, which benefits everyone.

Unbanked or underbanked individuals spend hundreds of dollars per year on financial services, more than fully-banked individuals who could better afford them. Alternative financial service providers, such as check-cashing agents, charge significant fees for their services. For example, MoneyMart charges 3% of the amount of a cheque. Wal-Mart charges $3 on any amount under $1000 and $6 for checks $1000 or more.

Unfortunately, accounts at formal financial institutions often require a consistent income and a minimum balance in order to obtain an account and waive account service fees, a deterrent for low-income workers.

Uulala’s unique mass payout feature allows companies to distribute their payroll easily and effectively, regardless of a payee’s formal banking status. Each employee gets a unique Uulala debit card linked to their own deposit account. They are not obligated to download the app to access their pay, but if they choose to do so, they can take advantage of Uulala’s full suite of services, from bill payments to microloans. If the card is lost, the account still exists with the balance intact and employees can access their funds using a virtual card until their new card arrives.

By using a more effective, secure payment method than a paper check or even payroll card, businesses can reduce payroll service costs and can increase their employees’ access to and retention of funds while keeping actual wage costs the same.

Attract the right staff by providing financial education

One of the biggest challenges staffing agencies face is attracting and hiring the right candidates. In order to cultivate a strong reputation and retain clients, agencies need to have the right staff, and the right incentives to acquire them. A staffing agency is often someone’s first formal employer, uniquely positioned to offer their staff their first real financial access and education.

According to the American Staffing Association, 90% of employees said that working for a staffing agency made them more employable. In addition to job skills training, the opportunity to receive financial education and understand how to navigate the digital economy and learn about banking and credit is a valuable skill and would not only help make them more employable but help them do better in every aspect of their financial lives.