Why Should An Employer Offer Earned Wage Access
Employers must stay ahead of the curve.
Today's workforce is a dramatically different scene than it was just 5 years ago. Whilst job candidates have more freedom to choose available opportunities the converse is that cash flow (liquidity) is an issue for millions of employees with the resultant effects being that many rely on payday loans, incur late charges or fees. In Nigeria, for example, workers are having to deal with inflationary pressures on most - if not all - goods and services. Earned Wage Access (EWA) underpins our on-demand pay offering and enables employees, within a pay period, to access money they've earned but not been paid thus helping them avoid consequence of other costlier options.
EWA benefits the whole workforce
There exists a little misconception that only low wage earners or a small population of individuals with poor credit worthiness need flexible access to wages. Whilst employees at different wage levels experience liquidity issues at different thresholds what is evident over the last few years is that the number of consumers living paycheck to paycheck has increased year over year across all income levels.
Whether you're an employer bristling with entry level workers or enterprise level professionals, everybody needs access to liquid cash. Wage access is a problem that cuts through an employers workforce profile. Offering EWA to your workforce is an equitable, fair and transparent way to bring financial succour to the most important asset in your organisation – your people; your employees.
EWA provides real time instant access 24 hours a day. Still in doubt on the benefit of earned wage access to your employees well, we'll go further and tell you some key reasons why EWA is a beneficial option for both employees and employers:
1. Bring Income More Inline With Expenses
EWA is one way employers are helping employees better manage the mismatch between when wages are paid and dealing with expenses thus better managing their expenses and avoiding sudden short-term or long-term borrowing incurring late charges or high interest rates.
Imagine an unexpected sudden emergency to pay for a home repair or struggling to cover the cost of travelling to work or turning up at the market and finding out you're a little short from paying for your groceries. EWA will help address these needs and more without relying on a credit card or taking out a payday loan; and without incurring late charges, penalty fees or interests.
Besides the above the transparent wage tracking inbuilt functionality enables employees to get a real time view of earnings as the pay period progresses. The ability to see their wages accumulate during the pay period gives a reassuring feeling of being in control of their financial circumstances and having the empowering mandate to address emergencies on their terms.
2. Reduce Employee Turnover
Financial stress isn't just a debilitating problem for the workforce it's impacting employers as well. The worries of financial stress hardly switches off and more often than not they follow people to work which impacts on their productivity in the workplace. It also contributes to absenteeism. This isn't a new problem but an ongoing one which isn't going to remedy itself. Giving employees access to their wages when they need it creates a major shift in lifestyle, in outlook. They now have control and the ability to address those life events that can cause stress. When this significant advantage is attributed to a benefit the employer has provided it deepens engagement between the two and helps in retaining the employee with the employer.
3. Improve Productivity
When the engagement between employee and employer deepens there is a mutually benefiting stake for success, a strong association and connection an employee feels towards their place of work. It is no surprise that engaged employees are more committed to the mission of the company. EWA, as narrated in the preceding point, can bring about such increases. Contrast that with a less engaged employee with financial worries that's distracted by thoughts on how to address them.
4. Increase Your Application Pool
The workforce is becoming more tech enabled and meeting their needs is no longer simply a nice to have. If offered a choice, many employees would like the option of having flexible and early access to their wages when needed. So employers that offer their workforce EWA are really offering themselves a better chance at filling vacancies.
Think of it this way: if my competitor is offering such a benefit to their workforce what's stopping them from filling vacancies they have quicker than you and out competing you or worse poaching your staff.
A significant means by which employees gain financial security is through their employer.
Employees often rely on employers to provide health insurance, pension plans and other benefits to make us feel more secure. Offering EWA is another benefit-like tool that can make employees feel more secure and also goes beyond simply providing early access to unpaid earned wages to helping your workforce get their financial lives in order.
Wagefit is an EWA provider that is enabling employers to be their employees first contact to financial wellness. Contact Wagefit to learn about how we could help you achieve these goals.