Why EWA Matters in 2021 More Than Ever Before

If you’re reading this and you’re an employee who uses Payactiv, you already know how earned wage access (EWA) has impacted your life for the better.  You’ve seen how it can reduce or eliminate the need for payday loans, late fees, and overdraft fees.  You’ve seen how it has reduced or eliminated your stress.

If you’re reading this and you’re an employer who offers Payactiv, you already know how earned wage access (EWA) has impacted your business.  You’ve seen it in enhanced productivity, engagement, and retention.  Most of all, you’ve seen it in your employee’s faces.  You are seeing how you’ve helped them live the life they’ve earned.

2021 is going to be the year that EWA will matter to both employee and employer more than ever before.

We at Payactiv have always known that when people actually have surplus cash, they pay down debt, start to save money, and even invest.  This was proven in a very unexpected way last year, when the stimulus and supplemental unemployment checks were delivered to millions of Americans.

Pawn shops around the country said consumers redeemed their pawned items at a record rate.  They also made fewer loans.  The same was true of payday and installment lenders.  Not only were loans paid off, but consumers in every single income bracket increased their savings by an average of 200%.  Investment across income brackets above $35,000 nearly doubled.

As employees use Payactiv to get access to their wages when they need them, they will create surplus cash by avoiding all the loans and fees they used to pay.  That will lead to savings and investing.  Excess cash flow can be spent on goods and services that enhance quality of life.  Employees can adjust diets to be healthier.  They can deploy that capital to enhance skill sets.  They can spend more money on their families in areas that may have been lacking, such as health care, and it frees up time for workers to spend with their families without financial stress distractions.

There is no wellness without financial wellness, and we will see financial wellness dramatically improve as Payactiv is increasingly accepted as a “must-have” benefit.

Life is going to get better for a lot of employees.

Meanwhile, employers that offer Payactiv are going to see additional benefits.  Some of these may be subtle, but they will become dramatic.  

There are two types of employers: those that offer Payactiv and those that do not.  Take a few days and notice how your employees carry themselves physically, and the looks on their faces.  Then go to a competitor’s workplace and compare the two.  Repeat this in July and again in December.  We believe you will see a marked difference, with your employees feeling and looking better, and that’s because you offer Payactiv.

Then measure your productivity, engagement, and retention.  That’s where these effects will ultimately appear.  Why? If a worker feels financially secure, they are more engaged at work. If they do not feel financially secure, they will be distracted.  The psychological and emotional toll of constantly chasing a paycheck, while bills pile up, are significant and ultimately affect work performance. That translates to productivity.  A decline in productivity makes you less competitive in the market.

Psychological burdens become physical burdens.  There is no question that mind and body are linked.  The physical burden will translate into an increased reliance on health care.  If the employer provides that healthcare, it means increased usage and that leads to increased premiums and reduced coverage for the workforce you need to beat the competition.

For anyone who is a football fan, Bill Belichick is a great coach because he tries to find and exploit even the smallest advantage.  The advantages above are exactly how you will beat the competition.  They will be spending more on healthcare, recruitment, and retention.  They will be chasing the wrong tools to improve employee livelihood.  You’ll already have the answer.

Payactiv wishes you all a successful and prosperous year!