Over half of North American employees are more stressed about their finances today than a year ago – the highest number reported since 2008. Multiple factors drive this unwelcome trend, including the rising cost of living and food.
Unexpected expenses, such as a car repair or a medical bill, can present a hardship for many families. According to the Federal Reserve’s 2022 Economic Wellbeing of U.S. Households report, half of adults with a family income of less than $25,000 had one or more bills that they couldn’t pay that month or were one $400 financial setback away from being unable to pay them. Minority groups are struggling particularly hard.
Source: The Federal Reserve
Given prevailing economic headwinds, offering your employees wage increases that beat inflation might not be feasible. But there’s another option that is free or low cost to your business: on-demand pay, also known as earned wage access or EWA.
On-demand pay is a revolutionary payroll model that allows employees to access wages earned before the traditional (and outdated) two-week or monthly pay cycle. It allows employees greater control over their finances: they can pay for unexpected or daily expenses without incurring high-interest credit cards or payday loan debt. On-demand pay isn’t a loan or a salary advance– it’s comprised of wages your employees have already earned.
“Employees would ask for paycheck advances when they had financial situations. We have had to say no to their requests because if we do it for one, we will have to do it for all. In your gut, you really want to help your employees, although, prior to Payactiv, we didn’t have any concrete solutions to offer.”Anna Haugen, Manager of Human Capital at TTEC
By providing a revolutionary way to access pay, earned wage access provides a much-needed solution that benefits employers and employees. Having a sense of financial control contributes to employees’ overall well-being and results in positive associations such as feeling healthy and energetic.
Prioritizing financial wellness can also result in many business benefits, including:
It’s important to offer a well-rounded financial wellness benefit to your employees. A benefit that provides educational tools, budgeting tools, and financial coaching can help employees stretch every hard-earned dollar they make.
Waiting for payday can be stressful, and many workers end up in the same boat: waiting, worrying, and trying to make it through until their paycheck comes. Earned wage access changes this by putting the power of payroll into employees’ hands.
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