With economic headwinds including high inflation and fears of recession in the United States, employers are more nervous than ever about the availability of the frontline workforce.
On top of that, in the wake of the Great Resignation, more and more workers are leaving their jobs for better opportunities as everyone is buckling down for the tough times ahead.
That’s why many companies are turning to the latest financial benefit to offer employees and improve retention — early wage access (EWA), sometimes called on-demand pay or same-day pay. This solution allows employees to digitally obtain their earned wages before their scheduled payday, providing access to necessary income and more flexibility with their finances.
More and more companies are turning to these types of financial solutions to retain their workers. In 2018, 21% of U.S. companies offered financial wellness benefits, which was up 16% from 2016, and is expected to increase in the years to come.
If your organization is investigating Earned Wage Access companies, you might be wondering: How can we choose the right company for us? What makes different Earned Wage Access companies different?
To help guide your research, we’ve identified eight key questions that employers can ask during their evaluation process earned wage access companies.
For sizable employers and smaller businesses alike, getting a new payroll solution in place needs to be as fast and smooth a process as possible.
With an ideal EWA solution, many businesses can get up and running very quickly after completing the standard compliance checks. However, not all earned wage access companies offer the same timeline.
Some EWA providers focus on as fast an onboarding as possible, to enable you to quickly offer the program to your employees. Others can take weeks, or even months, to go through all of the compliance checks, onboarding, and enabling you to launch your program. Given the high level of employee demand for these solutions, waiting weeks or months to get your EWA solution ready could literally cost you in employee turnover!
In a perfect world, there would be no cost for starting a partnership with an EWA provider. In reality, employers should look for providers who provide minimal to no entry cost. Note that while some EWA providers may allow an employer to get started for free, there may be minor fees for employees.
When shortlisting EWA solutions, make sure to read the fine print and ask about any potential fees your organization might come across.
Earned wage access is often synonymous with the term on demand pay. It allows employees to get their earned wages when they want, which means some might want to be compensated daily, weekly, or bi-weekly. If you’re using paper checks to administer pay for different people on separate days, that’s an administrative nightmare.
If you’re interested in why paper checks are becoming a relic of the past, check out our article on why access to pay early is the future of payroll.
Instead of paper checks, there are two more convenient options available for employers who take advantage of EWA: direct deposit and paycards.
Direct deposit is a helpful and popular solution for employers, but it’s not the most effective for under-banked frontline workers.
Why? The downside is that not every worker has access to a bank account. In fact, 5.4% of U.S. households (approximately 7.1 million workers) were unbanked in 2019. And another 20% are underbanked. These numbers are considerably higher for frontline or low-wage workers. This leaves them open to predatory payday lending, and financial stress. So while direct deposit is an option, it’s not the perfect payroll solution for your workers.
The other method to get money into your workers hands is through paycards. These cards allow employees to use their wages as they earn them like a debit card, negating the need for a bank account that might not be available to them. Some paycard solutions even allow your company’s cards to be custom branded, free of charge.
The best earned access wage companies require minimal effort to adopt into your existing payroll processes.
But not all payroll providers offer the same transitional power. Some vendors might need you to change your current software, or might require more administrative overhead. When evaluating your options, ensure their access to pay early adoption process is more convenient than paying your workers with paper checks.
With payday vendors, you should be able to expect great support no matter the size of your business. It should never be a requirement to have thousands, or even hundreds of thousands, of employees in order to be treated with the same priority as larger companies.
As you communicate and engage with your shortlist of earned wage access companies, take note of how they treat your business. Your satisfaction and positive experience should be their number one priority. If the experience you receive upfront is lacking, or you get the big corporation treatment, it’s likely that’s the same experience you’ll get as a customer.
The goal of this question is to help you find a payroll partner that’s not going to require you to make a massive upfront commitment. These commitments can include minimums, or a long and complex contract.
Quality and experienced earned wage access companies will not require any minimums or long-term contracts, or include any hidden fees for employers. With new partnerships, anxiety about commitments is common, and your vendor should do their best to help you feel at ease, whether you’re speaking to a salesperson or a direct contact.
If you don’t want to deal with a salesperson, you shouldn’t have to. If an EWA vendor continuously pushes you into a series of unwanted sales calls, that’s a red flag.
In today’s world, you can expect many businesses to make it fairly painless to come onboard. Scheduling multiple lengthy calls with a salesperson just to get started is not the best use of your time.
Your workers are counting on you to offer crucial financial benefits, like earned wage access. That’s why it’s in your best interest to partner with an EWA vendor that has your best interests at heart.
To find the EWA company that fits your company’s needs, keep asking these eight questions as you continue the search:
- What’s the timeline for implementation?
- What are your initial & ongoing costs?
- How does your process pay my workers?
- Will there be changes to my payroll process?
- What’s your approach to our partnership?
- Are there any required commitments?
- Do I need to spend a lot of time with a salesperson?
If you have even more questions about paycards or earned wage access companies, learn more about what a quality paycard vendor offers.
Get started today in less than 15 minutes with Juice’s self-servicing earned wage paycards!