They were some of the most awkward conversations I ever had as a young Human Resources professional . . .
Employees who, in embarrassing moments for everyone involved, had come into HR to see if the company could give them an advance on their pay.
The reasons varied.
The car had broken down leaving them stranded with no way to get to work; a sudden illness in the family; some other sad, unfair cause of stress for a valued member of the team.
Solving Employee Cash Flow Problems – Wagestream
For all the public controversy that continues to swirl around payday loan companies and their vicious interest rates that can hit more than 5,000% in some cases, there’s still an underlying issue that gets forgotten about: the strain on the individual employee who desperately needs the money.
Scroll down to read the full story or to listen to the podcast episode.
The financial strain was even addressed in the excellent US best-selling autobiography, Hillbilly Elegy, by J.D. Vance.
That’s why I was very interested to talk to Adam Hankin (GM – Ireland) at Wagestream, a new alternative to payday loans.
“A few months ago, Wagestream didn’t even exist, yet they now offer their financial support to over 125,000 employees.”
Not so long ago, this HR tech company didn’t even exist, yet they have grown so rapidly that they now make their financial support available to over 125,000 employees in well-known companies across the UK and Ireland.
Not only that, they’ve also gained funding from some of the biggest names around, including Village Global, a venture capital fund backed by Bill Gates and Jeff Bezos.
Adam and I talked about how to launch a new HR startup and about the inside story of Wagestream’s rapid growth.
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How To Launch A New HR Startup – Q&A With Wagestream’s Adam Hankin
During a very interesting business growth discussion, Adam and I discussed such questions as what is Wagestream and how has it grown so quickly?
What Is Wagestream And How Is It Different?
In a moment, we’ll get to how Wagestream works but, first, check out this podcast episode featuring CEO & co-founder, Peter Briffett, on the fascinating Tech Talks show.
Here’s how Wagestream works:
“Wagestream allows your employees complete control over when they get paid. It effectively ends the need for employee advances, loans and employee stress suffered from short term, unplanned financial obligations.
Wagestream shows each employee the total amount they have earned in a given month, and allows them to instantly access that money.
All payments are facilitated by Wagestream, and then deducted from normal monthly pay cycle.”
What Are The Common Questions About Wagestream?
With more and more businesses and consumers basing the majority of their buying decisions on online research rather than in sales meetings, it is hugely important to identify common sales questions and possible objections and then address these early into the process.
So, what are the frequently asked questions about Wagestream?
Adam: “Employers are always very pleased to hear about new ways to support their staff and it’s the same when they learn about Wagestream for the first time. They really like the way it can relieve some of the burden and stress being suffered by employees when something unexpected happens.
In terms of operational questions, employers sometimes ask about four main things:
- How will this help our business? At the most basic level, you’ll have happier and less stressed employees which reduces employee turnover and increases employee engagement. You can promote your company as one that cares about employee financial wellness. You’ll see an increased willingness to work extra shifts or overtime because staff don’t have to wait until the next pay day – they can access the money almost the next day if they really need it. From an operational perspective, things will be easier when you remove the need to manually give ad-hoc cash advances.
- Could this create alternative financial problems for the employee? The answer is no. We’ve built in a maximum drawdown of up to 50% of monthly pay but many of our employer clients choose to reduce this to around 30% to 40% drawdown. Our mantra is to help employees, not to cause different financial problems. Wagestream is not a loan. There is no interest, no penalties, just a flat fee of €1.75 to access money the employee has earned, regardless of the amount. No other solution has such a measurable impact on the financial health of your employees. Wagestream can be used to give access to a percentage of earnings, pay overtime & pay tips, for salaried and hourly workers.
- Will this hurt our cash flow? No. Wagestream has no impact on company cash-flow or normal payroll process. All payments are facilitated by Wagestream, and then deducted from normal monthly pay cycle.
- Any payroll hassles? No, Payroll don’t have to change a thing. It’s very much a plug-and-play system.
Overall, we always seek to communicate that there are huge benefits to the employer.
Staff who are not stressed and weighed down by immediate money concerns are far more likely to be more productive. They are also less likely to have to take time out of their work to sort out financial difficulties. These employees will have higher attendance rates and will be more engaged at work.
For example, in the restaurant industry, a waiter is more likely to put in more effort tonight to get tips, knowing that he or she can access the money in the next day or so rather than wait until the end of the month when payday comes around.
It’s a big boost for employee engagement and retention.”
Let’s now look at how Wagestream has grown so quickly.
How Has Wagestream Grown So Quickly?
As we saw earlier, a few months ago, this HR tech company didn’t even exist, yet they have grown so rapidly that they now make their financial support available to over 30,000 employees in well-known companies across the UK and, soon, beyond.
Having examined their marketing, it appears that Wagestream have strategically chosen some, not all, marketing channels to promote the business.
Adam: “We’ve grown so quickly for a few reasons:
- Wagestream is a powerful new product that addresses a real need for employees.
- Our founding team has worked really hard to make it very clear to employers how they benefit from giving employees access to Wagestream.
- We haven’t gone for a scattergun approach when it comes to marketing our business. We’ll roll out more channels as time goes by but, for now, we’ve concentrated on getting a few big ones right.
- Finally, the HR community has been so kind and helpful when it comes to introducing us to key decision-makers within large employers, particularly in the retail and hospitality industries. They’ve seen how we can help employees avoid the horrors of payday loans and so they’ve very generously opened doors to allow us to talk to employers about how these companies can benefit. We’re very grateful for all the support we’ve been getting from the HR community in the UK and now in Ireland.”
“We’re very grateful for all the support we’ve been getting from the HR community in the UK and now in Ireland.”
The team avoided a ‘scattergun’ approach which is an excellent idea. It obviously then begs the question: What marketing did you do to promote the business?
Adam: “The big three marketing channels have been PR, Partnerships, and good ol’ fashioned Business Development/Networking. To a lesser extent, there was also a successful trade event.
On the PR (Public Relations) side of things, we did one single piece of PR that did wonders for the business. At one point in time, the UK payday loans company, Wonga, had gotten themselves into a lot of trouble and had ultimately collapsed. We then did the respectful thing and held a funeral for payday loans, right in the heart of London. We gained huge publicity coverage with that one event. Around twenty to twenty-five newspapers and popular websites ran the story and used our photos. This was an immediate boost and there was a big spike in enquiries from employers and industry leaders.
Partnership marketing has also performed really well for our business. Our founding team quickly identified key businesses that operated in the same space but were non-competing, such as large payroll software providers. We now hold jointly-hosted webinars every week to explain to partner audiences what we offer and how it will benefit them. This is powerful because it is a warm audience that is pre-qualified for our product. We have high hopes for further joint marketing with other industry leaders in the future.
Business development and networking has been the other main source of sales lead generation. We’ve been overwhelmed by all the very kind help and assistance everyone has been giving us. So many people have introduced us to HR Directors and other such business leaders. We’ve really appreciated all their support as we try to make life easier for employees.”
Adam mentioned a fourth marketing channel, a trade event, that had helped. I was curious to hear more about this as trade events can often have a high cost in terms of time and money but without a great return . . .
Adam: “We exhibited at the recent Employee Benefits Live event in London which will pay back tenfold. In my experience, many of these types of events will provide the business with a loss or maybe break-even in terms of resulting sales but this event worked really well for us for various reasons. Unlike other conferences, there were no tyre-kickers; it was full of the right type of audience. Plus, it was good timing due to the imminent return of the ‘War for Talent’ which is a natural fit for our financial well-being product.”
Any Suggested Business Growth Resources or Tips?
Whenever I talk to people on how to launch a new HR startup or develop an existing HR business, I try to discover new business growth resources and advice to share with my readers.
Adam didn’t let me down 🙂
He strongly recommended the How I Built This podcast which features short, entertaining interviews with successful entrepreneurs. The show looks at: how they started, how they succeeded, and so on.
On Adam’s advice, I started with the Power Rangers: Haim Saban episode which was a real eye-opener. The episode featuring the founders of WeWork is next on my list.
Beyond the podcast, Adam had this advice for others trying to grow an HR consultancy or HR tech business:
“Network, network, network – get out there and meet people. Get in front of as many people as possible and explain how you help other businesses (but avoid the ‘hard sell’). Even if they aren’t buyers, you’ll be amazed at how quickly word gets around if you’re seen as someone who wants to help others.”
Conclusion – How To Launch A New HR Startup
It was very enjoyable talking with Adam and learning about the rapid growth of Wagestream. I wish Adam and the team all the best for the future.
You can check out Wagestream here.
Want to talk to Adam to learn more about Wagestream and how it can help you? Contact Adam Hankin here.
All the best,
Updated with podcast interview. Original text-only article published on 18 October 2018.