Earned Wage Access Benefits Employees in Profound Ways
The world of work is changing for all actors. Workers today want more from their jobs, and earned wage access (EWA) delivers the support they’re looking for.
The Evolution of the Workplace
As business models evolved, the role that employees play has changed over time.
During the industrial revolution, the primary business model was all about production. Workers were a commodity — another cog in the machinery producing products that the company ultimately sold. During the technology revolution, the primary business model focused on how technology could optimize the production process. Employers viewed workers as a component in the machinery, but people who understood technology were highly valued.
Next came the customer-centric business model, where the focus shifted from optimizing the production process to delivering value to the customer. Employees were part of the delivery process, with specific value given to sales, marketing, and customer service workers.
The New Workforce
We are on the eve of a new business model that focuses on workers as the drivers of economic value creation. There is a growing appreciation that personnel is the key driver of making companies successful wherever they are in the organization. Employees are now the factor that makes the machinery work!
With the shrinking labor force, employees are the drivers of economic value creation for organizations, but they are now a scarce resource. That means that organizations must work harder to keep staff employed and respond to their needs. What are the top needs of workers? According to a survey conducted by LinkedIn, the top two things that employees want in 2022 include:
1. Mental health support. Covid-19 concluded that employees need organizations to accommodate their mental health needs. Companies need to be sensitive to what triggers stress at work — and the two most significant stressors are Covid-19 and financial stability.
Earned wage access can address the stress associated with financial issues. Allowing workers to access their wages on-demand eases the worry generated by struggling to “make ends meet” between paychecks. PWC reports that employees spend on average 3 hours a week worrying about their finances — these are 3 hours of lost productivity each week — easily eliminated by offering EWA.
2. Working for companies that make a difference. Workers are looking for their organizations not simply to focus on making profits but to be part of the solution. Employees are also looking for their organizations to give them flexible work schedules, safe work facilities, paid leave, childcare, training, etc. These enhanced benefits can make a difference for current staff and candidates.
Earned Wage Access to Meet Needs
Offering earned wage access could be the tipping point you need to attract new personnel and keep the ones you have happy. EWA is a benefit that shows you care about your employees and could be the competitive advantage that sets you apart from the competition.
Companies should care about what their staff wants and needs. Academic research shows that when organizations treat employees fairly, they have higher performance, better attitudes, and more engagement. In other words, when organizations treat their employees well, they are more profitable.
Some of the positive consequences to workers offered and using EWA include enhanced:
- Financial stability as they incur fewer bounced check charges and credit card interest fees. On average, eliminating the costs associated with payday loans, bounced check charges, and interest expenses could be the equivalent of anywhere between a 4% and 8% raise.
- Mental and emotional stability as they stress less about financial liquidity. Instead of waiting two weeks to get paid, workers who use EWA can get their pay on-demand, which means they can buy food for their families and cover emergency expenses without borrowing money or charging their credit cards.
- Engagement at work as they are not worried about making ends meet while they are on the job. Eliminating three hours a week of downtime allows employees to focus on their work — up to 150 hours more productivity or about a month more a year.
Employers should offer this benefit to their people. It costs close to $0 to implement, there is no risk as the EWA provider carries the risk, and there is a massive benefit to the employee, which ultimately accrues to the employer.