Noodles & Co increased employee retention, financial wellness with on-demand pay

Helping employees conquer financial uncertainty is the latest issue employers are grappling with during the COVID-19 pandemic.Companies are looking toward innovative workplace benefits to help employees manage their financial lives.

In the fall of 2019, restaurant Noodles & Company teamed up with the financial app Even to provide its more than 8,000 employees with early pay access, which the organization has seen improve retention and employees’ financial wellness.

Since then, a quarter of Noodles' workforce is actively saving every month and have collectively deposited more than $550,000 into their Even savings accounts, according to the company. Employees have also accessed $2.6 million through Instapay to safely resolve cashflow emergencies, saving more than $700,000 in payday loan interest.

“On-demand pay really captivated our attention. The system of paying people on a monthly or bi-weekly basis has just been the way for so long,” says Amy Cohen, director of total rewards at Noodles & Company. “Hearing about [on-demand pay] really made me think that this is no doubt the future of payroll processing.”

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Currently, on-demand pay is utilized by less than 5% of U.S. employers, according to the Society for Human Resource Management. However, that figure is expected to jump up to 20% by 2023 as the value of such programs becomes more clear.

Financial wellness programs have been cropping up as employers realize the importance of easing their workers’ monetary stress. Financial concerns are the biggest cause of stress among employees, according to data from consulting firm PwC. Indeed, 59% of employees surveyed say finances cause the bulk of their stress and 35% of employees are distracted by their finances while at work.

Employers including ADP and Walmart offer financial wellness benefits, including giving workers advanced access to wages. In addition to Even, Noodles & Company offers employees family friendly benefits such as $10,000 for adoption assistance and paid paternity leave. The company also added a phase in-and-out maternity leave policy paid at 100% of workers’ salaries last year.

Many of Noodles’ employees live paycheck to paycheck, Cohen says. The organization realized it was their responsibility to help employees manage their financial lives as easily as possible.

“We were really drawn to Even because it wasn’t just about the access to their pay,” Cohen says. “It was more about taking a holistic approach to someone’s finances [and understanding] why they need it in that moment and how we can avoid [a situation] in the future where they are living paycheck to paycheck.”

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The Even app takes care of a lot of the legwork for employees, including timekeeping, creating a budget, populating how much an employee has earned each day and limiting the amount employees can take out so they do not short-change themselves in the future.

The on-demand pay program doesn’t just support Noodles’ employees. The benefit provides support to the employer by creating a less stressed and more loyal workforce.

“We’re seeing higher retention in those that are using this [app],” Cohen says. “Over 50% of our population is utilizing the benefit and we’re getting feedback that this is the first time they’ve ever saved. People are really excited about the fact that they have that option and ability to do that now.”