To combat the Great Resignation and stand out in an employee-led market, HR departments are frantically brainstorming creative methods to attract top talent and retain long-term employees. Included in these tactics is hybrid working, to provide work-life balance, social outings, to improve workplace culture and thus mental wellbeing, and finally Earned Wage Access, to directly boost the financial wellbeing of employees.
If you either are an employer or personnel involved in the creation of a company’s employee benefits program and you haven’t offered an Earned Wage Access program to all employees – unfortunately, based on the evidence Paytime is increasingly seeing, you may be putting your company at a hiring disadvantage and diminishing your competitive edge.
Don’t take our word from it, let’s look at some recent statistics. Companies who offer Earned Wage Access have reported 19% lower turnover rates, alongside 89% of employees reportedly feeling an increased sense of motivation and improved productivity rate at work. Therefore the benefits are twofold – for the productivity of the business, the longevity of employee lifespan, and improved financial wellbeing for the employee.
What is Earned Wage Access?
For those who are unfamiliar with Earned Wage Access, or Early Wage Access (EWA), this is a modern, tech-based strategy that is used to reduce the financial stress experienced by employees by alleviating the impact of a ‘pay day’.
Historically, employees would either receive their paycheck on a monthly, fortnightly, or weekly basis. This meant they had to meticulously budget and map out their spending over a long timeline. The problem with any plan is how easily it can be disrupted. We all know too well that life is full of unexpected speed bumps and uncontrollable factors. Factors such as minor or serious accidents, health complications, forgotten birthdays, funerals, weddings, interstate and international travel, or unexpected events. These unexpected events are not the sole cause, but are certainly a leading factor, in 50% of Australians living paycheck to paycheck. Infact, 33% of Australians do not have immediate access to $300 in case of emergencies.
EWA aims to disrupt these statistics, and with more companies adopting an EWA program, we’re well on our way to achieving this mission. A company that implements an EWA program provides their employees with access to the income they’ve earned based on the hours they’ve worked. For example, say you work Monday 9am-8pm, that night (or the next day) you will have access to the income you’ve earned from your Monday shift (based on hourly rate).
This eliminates the need for employees to meticulously plan out their spending for the week and better equip them to handle all unpredictable situations as they come. Because they are able to handle hurdles thrown their way, EWA reduces financial stress as they have a more accessible cash flow, and diminishes the chances of falling into a debt spiral from using alternate cash advancement services such as a personal loan, payday loans, credit card, or on-demand pay services that include fees or interest rates. With less stress on their shoulders, and less negative thoughts in their minds, employees are able to better focus at work and dedicate themselves to their tasks.
The best part about EWA is its win-win nature – for both employees and employers. Employees receive a healthier cash flow and access to cash on demand, and employers have a unique hiring proposition that demonstrates care for their employees – not to mention, implementing an EWA is free for the company to set up.
How does Earned Wage Access keep your company relevant?
Earned Wage Access keeps your company relevant for three, simple reasons.
Reason #1: It shows you care about your employees as people
It’s more common than not for companies to offer employee perks that relate to remote working, flexible work hours, and team bonding. These benefits are so common that they are now expected. The same way an employee expects to receive superannuation, they expect to receive the freedom to work on a hybrid schedule and in hours that suit them.
The above perks are implemented with the aim of improving the quality of life through focusing on mental wellbeing, however, there are few benefits that directly reduce the negative impact of financial stress and specifically increase an employees financial wellbeing. EWA does exactly that, and it shows you care about your employees at a holistic scale – mentally, physically, and financially. Regardless of the employee’s salary and position, you’ve played a role in enhancing their standard of living simply by breaking the ‘pay day’ cycle.
Reason #2: It shows you’re aware of what’s happening nationally
It’s no secret the Australian economy has taken a hit due to many ‘once-in-a-lifetime’ incidents. With rising fears of recession, by offering a program that assists employees financially it demonstrates your social awareness and loyalty to the people who work for you. To employees, it demonstrates you have listened to the concerns of Australians and have taken action based on feedback. Thus, this encourages employees to choose to work for your company rather than a company offering a similar position in a similar location and similar industry.
Reason #3: It shows your company is modern and adaptive
Offering EWA and modernizing your method providing employees income, a method that hasn’t been changed in decades, exemplifies the type of company you strive to be… and proves you’ll make the changes you see fit in order to fit the foundational values you preach.
EWA demonstrates your ability to be adaptive in a quickly changing workforce, and use trending topics and advocated personal needs to refine and rebuild processes in a more effective manner. With a newfound key focus on wanting to work to live, and not live to work, paired with individuals expressing more particularity in opting to work for companies who care for them on a personal level, including EWA in your employee benefits program is a sure way to certify candidates of your ability to innovate and keep up with the times. Therefore, proving your company is the better opportunity for long-term growth and employee satisfaction.
If you want to learn more about EWA and how you can use it as a selling point for candidates and potential employees, click here.