AdminMany employees struggle with financial stress, leading to reduced work performance. Employers can help employees avoid debt and improve their financial wellness by offering earned wage access.
EWA, also known as on-demand pay, is a new technology that allows employees to receive an advance in their wages. Here are some ways it can benefit your employees:
Increased Savings
Providing employees with on-demand access to earned wages can help them meet unexpected expenses and reduce their reliance on high-interest loans or credit. Ultimately, this can improve their financial wellness, boost employee morale and retention, and ultimately lead to higher productivity in the workplace.
Hourly workers can become overwhelmed with financial stress when bills come due that are not covered by their paychecks. As a result, they may be distracted from their work and less available for their employer’s needs. A survey found that nearly one in four financially stressed employees were distracted at work for three or more hours each week while they tried to handle their money issues.
With on-demand wage access, these employees can request a portion of their earnings before payday. This helps them avoid the extra fees and inflexibility of other wage advance apps with a waiting period between when a request is submitted and when they receive their funds.
Employers can offer wage advances for free to their employees with an EWA service provider. Sync your payroll data with the company’s app to enable employees to access their earned wages on demand. This eliminates the need for costly payroll advances and saves you the time and expense of manually processing those requests. Moreover, implementing an EWA benefit demonstrates that your company cares about your employees’ well-being.
Boosted Self-Esteem
Employees are often financially stressed out by a volatile economy and rising living costs. This can affect their work performance, and it may also affect their health. Fortunately, employers can help them overcome this by offering financial wellness benefits such as earned wage access (EWA).
So, what is earned wage access? Earned wage access is an adaptable payment system that lets workers withdraw a percentage of their paychecks before payday. Companies can offer it as a voluntary perk or via third-party service providers. This new solution provides financial stability and helps employees establish savings habits and an emergency fund.
This type of wage advance allows employees to promptly address their immediate financial obligations and reduces the need for high-cost loans or credit cards. It is an ideal tool to help combat debt stress and improve financial wellness for your team.
Before implementing this new benefit, you should understand your workforce demographics and determine whether EWA fits your company. If your team mainly comprises hourly workers, it is an excellent way to increase employee satisfaction and loyalty. A recent study found that when employers offer this perk, it significantly boosts employee retention rates. This is even more impressive when paired with financial guidance and literacy. Your employees will appreciate this solution’s flexibility and peace of mind.
Reduced Stress
When employees experience financial stress, it takes a toll on their well-being. It can cause them to lose focus on work and even miss out on opportunities for growth and advancement within the company. This results in lost productivity and decreased employee satisfaction, increasing absenteeism and turnover rates. Financial wellness benefits, such as earned wage access, can help reduce employee distractions and stress.
Earned Wage Access allows hourly workers to receive a portion of their paycheck early to pay for unexpected expenses or emergencies. It helps them avoid resorting to high-cost loans or credit cards, which often trap them in a cycle of debt. In addition, having access to their wages in real time can give them the confidence they need to manage their money better.
The ability to quickly cover unexpected costs can also help alleviate financial anxiety and improve overall financial health. It can also help employees save more throughout the year, leading to greater peace of mind and enhanced financial stability in the long run.
Offering a financial wellness benefit like earned wage access can show your team that you care about their well-being, boosting engagement, productivity, and retention. If you’re looking for an easy way to support your team, learn how earned wage access works and start seeing the benefits for your business.
Better Health
For low-wage workers, days leading up to payday can be a source of stress and financial insecurity. Bills accumulate, unexpected expenses arise, and many employees turn to high-interest credit cards or payday loans to make ends meet. Adding earned wage access (EWA) as a financial wellness benefit enables your team to manage these challenges by providing them with on-demand wages.
EWA is an alternative to payday loans and gives employees full control of the money they’ve already earned, reimagining what “a paycheck” is. Wages accessed through an EWA product are typically repaid from the next payroll and never require interest charges, so there’s no risk of debt accumulation. Additionally, these products are designed to reduce the billions of dollars less-well-off pay in payday fees and overdraft charges each year.
Ultimately, offering earned wage access as part of a larger financial wellness strategy can greatly impact your team’s health and well-being. With most percent of full-time workers living paycheck to paycheck, offering benefits that allow your team to meet their financial obligations is more important than ever.
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