Under Schulman’s leadership, the company took action. PayPal launched its employee financial wellness initiative at the end of 2019. At the center of this initiative was a new metric called Net Disposable Income (NDI), which goes beyond a simple wage calculation to estimate the discretionary income remaining for employees after taxes and typical living expenses are paid.
PayPal found that the estimated NDI was as low as 4-6% for some of the company’s U.S.-based hourly and entry-level employees; the company set a goal of at least 20% for all employees globally.
“At 20%, you actually have the ability to save and to put money away, and have money left over for discretionary expenses,” Schulman said. Using a percentage metric also means the NDI adjusts to the cost of living in different geographic locations.
Raising Wages, Reducing Expenses
PayPal knew that improving NDI would require a comprehensive and holistic approach. As a result, the company made changes designed to raise employees’ income and reduce their expenses in four main ways.
- First, the company reduced healthcare costs, decreasing the amount hourly and entry-level employees had to pay by nearly 60%.
- Second, it provided all employees with equity in the company, making every full-time employee a PayPal stockholder regardless of level or tenure and ensuring that the entire workforce could benefit from the company’s success.
- Third, it examined and raised wages where appropriate.
- Last, it made financial education and planning available to all employees. The company also continued to promote the existing emergency relief fund program to help employees who faced sudden spikes in expenses.
More recently, PayPal has continued to prioritize the financial wellness of its employees by awarding additional equity grants and providing wellness stipends to offset the costs of working from home. The company also began offering one-on-one financial coaching, enhancements to retirement plans, and early wage access through partnerships with Even and Hastee.
