As people re-enter the workforce post-pandemic, getting back to financial stability is more important than ever. Employers, no doubt, want to assist their workers in recovering from time spent not working.
Earned wage access (EWA) is a way for businesses to give employees access to their money when they need it and give them the best resources for paying unexpected expenses that may come up.
There are many benefits of EWA for both employees and employers. Here, we’ll discuss how small businesses especially can benefit from earned wage access.
What is Earned Wage Access (EWA)?
Earned. Employees who come into work day in and day out are earning money, whether hourly or salary. With EWA, employees cannot pull income from days or hours they have not worked yet. Instead, with EWA, there is the possibility for employees to get paid within 24 hours of working a shift.
Wage. An employee’s wage is the amount of money they have agreed to earn per hour or week. Whenever a person gets paid for the work they’ve done, it is still a wage they have earned. With EWA, there’s no difference in the amount of money an employer pays or an employee gets paid. Employee’s wages stay the same even if they access it earlier than the scheduled payday.
Access. This is key to what makes EWA special. No matter what, employees will get their earned wages. The difference is that with earned wage access, workers can get their money when they need it, instead of waiting for a designated day and hour. Depending on how the EWA is set up, employees can access their wages as soon and often as they need or want, or they can only access wages early once a week. Employers will be able to recognize their worker’s needs better than anyone, so they will be able to choose the option that suits employees best.
Benefits of EWA For Employers
Distracted and unreliable employees make for a stressed employer. If employees experience financial problems, studies have found that they are less productive at work. This is not surprising. In fact, another survey found that 40% of Americans would not be able to pay an unexpected $400 medical bill. That means nearly half of employees in the US are likely to be financially struggling and distracted at work because of it.
Giving employees earned access to wages not only increases productivity, but it also encourages them to stay on working with you. Having EWA available makes a 50% decrease in turnover. Employees are more likely to show up for work and stay at work. According to one survey, 81% of workers said they would be less likely to leave their current employer if early access to wages was available to them. This is especially important for small businesses that cannot afford to constantly hire new staff.
Here are some more benefits you can see from having EWA available for employees:
- 26% reduction in employees not showing up for work
- 49% increase in worker productivity
- 1.9X increase in job applicants for positions that offer EWA
When EWA first became available for businesses, it was a matter of if a business was going to incorporate it or not. Now, especially in today’s financial climate, EWA has become an easy way for employers to show they care about the financial well-being of their employees. It’s only a matter of when you start providing earned wage access within your business.
Benefits For Employees
Having timely earned wage access makes for a huge improvement in employee’s ability to budget and have more control over their funds. For people who are living paycheck to paycheck, an unexpected bill can put them deeper into debt and blow up their budget. Without EWA available to them, they may be forced to take out high-interest loans or get behind on important bills.
EWA grants employees access to the money they’ve earned so they can meet expenses without interest or extra stress. This allows people to more efficiently budget and plan expenses. Here are some of the benefits of earned wage access for employees:
- Employees receive peace of mind that they can access their wages whenever they need them most.
- Employees no longer need to worry about being late on bills
- Workers are more able to focus on work without financial stress distracting them.
Access to wages when employees need it improves their work and home life and to balance their finances. With so many people affected by Covid-19, they need the assurance that employers care for their needs more than ever.
What Options For EWA Do You Have?
Depending on what will benefit your employees the most, there are several free and paid options for EWA. With Payactiv, employees can access their wages quickly and discreetly with their smartphone. They can get their funds loaded onto a prepaid card, pick it up as cash, or transfer the money to a bank account.
The Payactiv app also allows employees to use their earned wages to call an Uber, pay bills, or purchase necessities from Amazon. With this available to your employees, they won’t miss a day of work because of transportation struggles.
Access to earned wages will no doubt improve the lives of your employees. They’ll be able to access their wages whenever they need and experience greater financial security. But, you’ll also see an improvement in your own business, whether big or small. With EWA, you’ll see an increase in productivity, a decrease in employee turnover, and an increase in happy employees.
To learn more about how earned wage access can help your small or large business, contact us on our website. We can provide you with a tour and demo of the Payactiv app so you can experience the way EWA can improve the lives of your employees first hand.
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