Tate Hackert spent most of his teenage years working on fishing boats in Vancouver, Canada, scraping away the surprisingly impressive income he made from his savings. By the time she was 16, she had already saved enough money to take out a second mortgage for a friend who needed one, but she didn’t have the means to get one.
Hackert quickly realized that he was able to help more people who had fallen on hard times, so he did. Between the ages of 16 and 23, he lent out approximately $300,000 in short-term and dollar loans to customers he found online. When posting a Craigslist ad, Hackert would get more than 300 emails from people asking for $1,000 to $2,000 to get them through the month.
“I started to realize that for these people living paycheck to paycheck, the only real options available to them were these short-term loans in outrageous dollars or just accepting a late bill payment and a hit on the to his credit,” he said. he says “I thought to myself ‘there has to be a better way'”.
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Hackert turned his high school side gig into a full-fledged business, co-founding ZayZoon in 2016, a fintech company that offers employees access to salary earned as a voluntary benefit.
“Fast forward a few years and ZayZoon has helped pioneer access to earned wages,” says Hackert. “This concept of giving employees the ability to unlock wages they’ve earned but haven’t been paid yet.”
ZayZoon is an employer-sponsored benefit that companies can add to their HR and payroll systems. Employees have access to up to 50% of their next monthly or bi-monthly paycheck instantly, for a low-cost fee or sometimes for free. As a result, the 300 small and medium-sized employers ZayZoon works with have experienced a 29% decrease in employee turnover and a 79% increase in hiring, according to company data.
“We always thought of ZayZoon as a tool that could help increase workforce productivity; we didn’t really necessarily think of it in terms of retention and recruitment,” says Hackert. “But employers now see the need for a differentiating benefit, to offer flexibility to employees so they don’t have to cross the street for 25 cents more an hour or access to pay that can help that employee through a difficult time.”
Seventy-eight percent of users said that accessing their earned wages helps them pay their bills on time and avoid late or overdraft fees, according to a recent survey by DailyPay, a financial services company. Seventy-four percent said that accessing their earned wages has helped them reduce financial stress, and 70% of users said that accessing their earned wages has helped them avoid taking out a loan of payment day.
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More and more employers are beginning to recognize that they play a role in the financial well-being of their employees, Hackert says. But giving employees a raise isn’t necessarily easy in this market, even more difficult for small or medium-sized businesses. That’s why they look for any benefit that can add value to their offering that can show employees that they care.
“It’s not just the employees of corporate companies,” Hackert says. “We’re seeing it in gig or part-time work, they also have the option to pay on demand. And from my perspective, it’s only going to accelerate.”
But if it’s so beneficial to both employees and employers, what’s stopped employers from normalizing it?
“The biggest concern or the biggest objection [we hear] “When you talk to an employer it really comes down to the work involved — they assume there’s going to be a really big raise,” Hackert says. “But we’ve taken the integration time from what can take companies weeks or months down to thirty minutes.”
The lift may be small, but the payoff is big, according to Hackert. He recalls a situation where an employee was able to access the first half of their next paycheck online at the store when they realized they would need more funds for their groceries.
“This is not just a product used by customers who don’t have or don’t make a lot of money,” Hackert says. “Whether you make $35,000 a year or $135,000 a year, if you’re not budgeting right, your bills can catch up with you. This is a solution for everyone.”