The Great Resignation has led to a shortage of talent that is affecting many companies. Unfortunately, according to global employment service provider Randstad NV, this trend shows no sign of easing. Essentially, people are now prepared to quit their job if they feel their needs aren’t being met.
It appears that many people aren’t happy in their positions. In a poll conducted by Randstad, 83% of participants felt flexible hours were important, and 71% said the same about having a flexible workplace. However, most stated that they had no choice regarding where they could work, while 40% felt they had no control over their working hours.
As a result, many companies are trying to find new ways to attract and retain employees. One approach seeing a lot of traction is Earned Wage Access (EWA).
What is Earned Wage Access?
With Earned Wage Access implemented employees are paid immediately instead of waiting for the traditional payday. On-demand pay, as it’s also known, means that employees accrue income daily and can withdraw a certain percentage of their earnings.
Of course, this means many companies might need to update their payroll infrastructure, for implementing EWA manually could put a lot of pressure on the payroll team.
But there are automated solutions. Companies like Payactiv, Branch, and Tapcheck are offering systems that can easily integrate with most payroll software. Such solutions enable employees to check how much they have earned and withdraw a percentage of their earnings at any point without putting stress on the payroll team.
The Benefits of Earned Wage Access for Employees
Many Americans live paycheck to paycheck, and this was true even before the pandemic shut down the economy. A Federal Reserve report stated that over 35% of all adult Americans would not be able to use their savings to cover an unexpected expense of $400.
What’s more, according to the 2021 MetLife Employee Benefits Trend Study, 86% of employees cite finances as the most significant stressor in their lives, while 27% say work productivity suffers because of financial woes.
Earned Wage Access could help many employees overcome these issues. They would be able to access the money they earned as they needed it, especially in case of unexpected expenses. Earned Wage Access cold make payday loans with their high interest rates obsolete, helping employees save money while reducing stress.
Employees could also get better control of their finances. For example, they could set their own pay dates to align with their financial commitments, which would reduce worry and improve their well-being.
Access to this tool could be via mobile app, allowing employees to handle the entire procedure themselves. The payroll team would save time, and employees would feel more in control as they access their earnings when they need it.
How Employers Would Benefit
According to a Harris Poll conducted for Ceridian, an HR and payroll management company, EWA would make it easier for companies to attract and retain talent. The polls found that 79% of respondents said having EWA would make them feel more valued, while 78% said it would make them more loyal to their employer.
Additionally, a Visa study found that 79% of workers would be more willing to move to an employer that already offers this benefit.
Likely additional benefits would be an increase in productivity and a reduction in absenteeism. Employees who feel in control of their finances are less stressed and are more motivated to come to work. Also, when an employee can see how a day of work affects their earnings, they are more likely to be present.
Remote Working Still Among the Most Desirable Employee Benefits
Employers are finding it increasingly difficult to attract and retain talent due to several factors, including the Great Resignation and demographic issues. The career insights platform Lensa, though, has studied US search trends to figure out what employees want.
At the top of the list is remote work, followed by a four-day workweek, employee assistance programs, signing bonuses and more. In other words, employees want to be able to work from home, which is a benefit more companies should consider offering.
For more employee benefits solutions, contact INSURICA today.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2022 Zywave, Inc. All rights reserved.