Did you know that 90% of Americans say that finances impact their stress levels? Today’s workforce doesn’t just want their wages – they want faster access to it.
To adapt to this employee-driven market and their financial needs, modern alternatives have been created to combat outdated methods of payroll. And implementing a modern pay and benefits program can lead to better engagement, higher productivity, and improved recruitment and retention efforts for employers.
What’s one of the most impactful and easy to implement alternatives available right now? Earned Wage Access is the win-win Fintech concept that benefits both employers and employees. Below, we’ll define what earned wage access is, and four general companies that can leverage it.
What is Earned Wage Access?
Earned wage access (EWA) is an alternative payroll option that allows employees to access their accrued wages more frequently than regular payroll cycles – as soon as shortly after completing a shift. The money can be issued to employees through traditional payroll means like direct deposit or paper checks, or through more modern means, like a reloadable paycard or a digital wallet and mobile app.
Earned wage access offers increased flexibility for your employees to get paid, which can help lower their financial stress.
What Types of Companies Benefit from Earned Wage Access?
Are you wondering if earned wage access is a good fit for your business? To find out, take a look at the following four types of companies that frequently benefit from offering EWA.
1. Employers of Low-Wage Workers
The economy has changed significantly over the past few decades. Today, according to the Brookings Institute, 53 million people (44% of the current workforce aged 18 to 64) are classified as low-wage workers.
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Individual circumstances vary, but these workers may feel the effects of inflation, rising gas prices, and unexpected expenses more than others. And roughly three-quarters of consumers earning less than $50,000 per year live paycheck-to-paycheck.
Earned wage access is one small but impactful way that employers of low-wage workers can offer short-term solutions. It might not be more money, but it offers more control over the money that they’re earning. Leveraging EWA (sometimes known as instant wage access) with modern Fintech solutions is becoming an essential benefit for low-wage workers across the country.
2. Employers with a Younger Workforce Demographic
The next biggest push behind the move towards earned wage access is the younger generation. More Millennial and Gen Z workers are simply refusing to accept the status quo, and advocating for better workplace standards, benefits, and pay.
Gen Z has largely come to expect EWA because most members entered the workforce after the advent of on-demand, gig economy jobs. The majority (61%) of Gen Zers would like their employer to provide the option for an earned daily wage payment.
With the U.S. workforce in 2024 expected to include 63.9% of workers aged 25-52 (which accounts for most older Millennials and Gen Zers), the pressure to offer earned wage access is increasing. These workers have both the financial need and a different cultural perspective on employer-employee relationships, leading to payroll flexibility, and greater control of their finances in general, as a top priority.
To further support this shift, younger workers are beginning their careers in a candidate-driven job market where they can often afford to find options that offer employee perks – like earned wage access – that they really want.
3. Payroll Providers
With this increasing demand for payroll flexibility and the possibility of earned wage access, it’s a feature that employers are looking to add to their payroll services. At the same time, there is a growing trend toward outsourcing payroll services. The convergence of these two trends presents a big opportunity for payroll providers who are willing to facilitate earned wage access for their clients.
Earned wage access is a strong value proposition for payroll providers looking to stand out from their competition. It’s one small perk that has big rewards, including reducing employee stress and providing a more complete offering for employers.
4. Staffing Agencies
Another non-traditional employer that stands to benefit in big ways from offering earned wage access is staffing agencies. As the hunt for talent intensifies, companies are leaning on staffing agencies for more support. But staffing agencies face their own challenges for recruiting, attracting, and retaining employees.
Earned wage access has become a key feature to lure workers, improve recruitment and retention efforts for staffing agencies in nearly every industry. It’s no secret that staffing agency workers are looking for more flexibility. At least 20% of the staffing agency workforce chooses this contract employment option based on flexibility.
It’s not just about part-time flexibility, either. Did you know that 73% of the staffing agency workforce puts in a full-time workload? That actually compares quite similarly to the 75% of the traditional workforce that works full-time.
For staffing agencies that can improve recruitment and retention using earned wage access, there is a big opportunity to be a hero for client companies who are struggling to fill open positions.
Don’t Miss the Opportunities of Earned Wage Access
Earned wage access has become an important consideration for employees in recent years. Between the financial burden of rising costs and tough economic conditions and the general apathetic response from job candidates, modern Fintech solutions like EWA are shining light in a new direction.
Both employers and employees are favoring the adoption of earned wage access as the new norm.
Don’t miss out on the impactful benefits that come with earned wage access solutions. Unsure where to get started? Juice Financial offers modern Fintech solutions that make it easy to pay your employees, offering them the perks and benefits they demand – without breaking the bank.
Learn how Juice’s solutions, such as our Pay Today feature, can help you attract, engage, and retain employees!