With inflation at its highest point in 40 years, the American workforce will have serious financial needs in the coming months, or even years. Many workers are struggling to afford gas, food, and other essentials. As an employer, it’s important to know what your workforce is facing and how you can help them stay financially well through these challenging times.
When your employees face hard financial times, they look to their employers for help. If you can’t provide some form of relief, they might leave to find an employer who does. The challenge is that raising wages to keep pace with inflation puts pressure on your business as well. So, to help your workforce feel more financially secure and improve retention, businesses are increasingly offering instant wage access.
Instant wage access takes on many different names, such as earned wage access (EWA), instant pay, or on-demand pay. Whatever you call it, EWA is the ability of employers to offer their employees their wages as soon as they earn them.
EWA has shown several benefits to employees but also provides incentives for employers. Offering instant pay access provides the employee and employer peace of mind, motivation, and efficiency.
How can you determine if instant wage access is right for your business? Ask yourself these four questions below to see if your business could benefit from offering instant pay access to your workforce.
Paper checks are still a common payroll practice in many businesses; however, several elements of paying employees with paper checks should be considered. Traditional paper checks have inconveniences and costs associated with them to both the employee and the employer.
It’s estimated that each paper check costs the employer up to $2 in printing, signing, and distributing, which adds up for employers. This fee doesn’t account for any replacement checks, either. The actual cost of creating the physical checks is only one aspect of the financial burden employers experience in this traditional payroll process.
The highest demographic of underbanked or unbanked adults are those with lower wages. Underbanked refers to workers who rely on alternative banking services, like payday loans, and unbanked denotes those who have no financial institution at all.
When underbanked or unbanked employees receive paper checks, they cost a company more than if the employer had offered direct deposit or earned wage access. Providing your employees instant access to their wages on a card can significantly help you and your workers.
In the wake of the Great Resignation, employees – especially lower-wage ones – are still resigning from their positions in droves and are harder to recruit than ever. Although this phenomenon is being experienced across the entire workforce, service-based industries are experiencing the most difficulty in keeping employees.
If you’re a manager or HR, you’re no doubt seeking ways to keep your employees satisfied and retained at your workplace. Instant wage access is a critical tool in employee satisfaction and has been found to boost retention by 36%.
Giving your hardworking employees access to the wages they’ve already worked for:
- Increases Financial Well-Being: EWA is not a loan. Access to already earned money prevents predatory lending practices like payday loans.
- Increases Work Productivity: Employees who are stressed about finances spend an average of 3 hours at work thinking about or dealing with financial matters.
- Increases Motivation: The ability to instantly access wages gives immediate gratification and encourages employees to show up and get paid.
- Increases Satisfaction: The security provided by same-day pay gives employees peace of mind with financial stability.
It’s hard to say who is experiencing financial hardships these days as the cost of living continues to rise at an alarming rate. Employers are noting the uptick in stressed-out employees and seeing the impacts it has on their work. Stressed-out employees are not productive, present, engaged, or satisfied. It’s not surprising, then, that financial experts say that half of America’s workforce is considered financially stressed.
With sky-high inflation, who can blame them? About 21% of workers in lower wage jobs report that their high levels of financial stress negatively affects their job performance. Plus, lower wage employees spend about 1.3 hours a week dealing with their finances at work, such as contacting creditors.
“Almost 50% of workers at large companies (25,000 or more employees) said their employers offer financial wellness benefits.”
Implementing instant pay is one way to show your working-class employees that you care and want to help provide solutions to their needs. With nearly 60% of Americans reporting that an unexpected expense of just $500 would be devastating, EWA not only gives them security but also helps protect them from having to rely on things like payday loans.
Those paper checks that you print off during payroll contain a lot of sensitive information. Not just for the employee but for your business as well. When you give someone a paper check, you give them all of your banking credentials on paper. That allows a potential risk of access to your bank account.
Additionally, when unbanked or underbanked employees cash those checks, they pass through an unknown amount of hands. Instant pay access, either through direct deposit or reloadable pay cards, increase security for both you and the employees you serve by:
- Eliminating a physical paper trail.
- Keep sensitive information hidden.
- Allow for a more secure direct deposit.
- Eliminate the risk of lost or stolen checks.
Meeting the needs of today’s workforce requires a dynamic look at the issues they face – mainly recovering from a pandemic while facing new economic challenges like inflation and a potential recession. Employers need effective payroll strategies to offer more benefits, encourage retention, and even move past an outdated paper check system.
Did you answer yes to any of the questions above? If so, you now know that instant wage access is a powerful tool you can use to improve employee satisfaction, bolster retention, and show your employees you care.
Juice Financial can help you give your workers and your business an ace up their sleeve with reloadable pay cards. We make payroll and instant wage access interface user-friendly and secure. Things like employee satisfaction, increased productivity, and higher retention rates are not beyond your reach – they’re only one click away!
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