As we head into 2023, companies across the country are reviewing their employee benefits programs and determining what additional benefits they’ll offer their employees to stay competitive in a challenging hiring environment, whilst considering their employee wellbeing.
Earned wage access will play a key role this year in HR departments, and with that there is a need to dispel some myths and misinformation about earned wage access programs.
In this first post, we’ll cover some of the most common misconceptions about earned wage access, and explore the real truths that you should be aware of.
MYTH 1: All earned wage access vendors are the same
TRUTH: There are a number of methods to deliver earned wage access, but know that not all vendors are created equal. Most vendors have structured their solution as a loan to the employee with recourse. To Paytime this is a big NO, NO. Staff have earned their money there should be no loan whatsoever. Money given to employees in between pay periods is simply wages they’ve already earned. With the proper guardrails and compliance measures in place, it’s a smart way to help employees access money that’s rightfully theirs, and put them back on track to improve their financial wellness
MYTH 2: As a company we need to have excess cash available at all times to ensure we can fund these early withdrawals
TRUTH: The company does not fund any withdrawals the Earned Wage Access (EWA) provider will give the funds to the employees as and when they needs it. The company simple repays the EWA provider on payday together with the rest of the staff
MYTH 3: EWA only benefits staff and not the Company
TRUTH: There is resounding evidence that EWA improves attraction and retention rates for companies. Research reveals that companies can expect up to 20% uplift in staff productivity; >25% improvement in staff retention and 81% of shift workers are willing to put in more hours knowing they can access their pay straight after ‘clocking-off’ for the day.
MYTH 4: Its an unnecessary cost to the Company
TRUTH: The cost equates to a small ATM-like fee only if/when funds are withdrawn. This is usually paid for by the employee, costing the company NIL (there are no implementation fees either), or companies have the choice to contribute toward lowing this fee by offering to subsidise the cost to employees.
As you embark on your earned wage access discovery for 2023, be sure to check out our White Paper, which explores EWA further along with other key items your organisation may want to consider as you look to level up your employee benefit programs this year.
