Now more than ever, how employees feel about the work they do and the organization they work for is extremely important. Because of this, every business must explore new ways to create the most positive employee experiences they can, and this includes the experience of getting paid.
And, in a world where flexibility and convenience is now expected, one key way you can improve your employees' experience is adopting an Earned Wage Access (EWA) system (or on-demand pay). This blog sets out the basics around EWA, highlights the importance of employee experiences, and explains how beneficial EWA can be.
Why employee experience is so important
The focus on employee experience should be looked at in the context of the current global landscape. Not only has the employer/employee relationship been reset - with a much greater emphasis on work/life balance, wellbeing and flexibility. As economies across the globe bounce back, recruitment is becoming more of a ‘seller’s market’, where talented candidates hold all the cards and can pick and choose the employers that best suit their expectations and lifestyle.
At the same time, the growth of remote working has broken down physical and geographical barriers around employment. Many jobs can now be done from anywhere, as long as the employee has reliable Internet access. This means the talent pool available to businesses is wider - but it also means that candidates have far more prospective employers to choose from.
All these factors mean that improving your employee experience will be essential in order to be competitive in a challenging job market.
What is Earned Wage Access?
Employees are looking for more flexibility in everything they do right now, whether that’s in where they work, when they work, and even how they get paid. Earned Wage Access provides employees with the flexibility they are looking for, but how?
To sum up how it works, think about how employees normally use their annual paid leave entitlement. They accrue a certain number of days each year, which they can (within reason) use as and when they wish. In many cases, if they don’t use all of their entitlement, the balance rolls over and is available to them in the following year.
EWA takes very similar principles and applies them to how employees are paid. Instead of being paid a contractually agreed lump sum every month, employees accrue pay on a daily basis, within a cloud-based solution that they can access online or via an app. At any time, employees can access this self-service solution, see how much they have earned, and immediately withdraw however much they want or need to their own bank account.
This represents a major change in how payroll operates, as it abandons the concept of running payroll at pre-defined dates. It also turns what used to be a manual process run by payroll teams into a self-service one that individual employees conduct independently.
How EWA can improve employee experiences
From an employee perspective, It’s not hard to see why EWA is moving from being a new innovation towards becoming a must-have benefit for many:
- Reduced stress: no longer do employees have to worry about making a diminishing bank balance last until the next ‘payday’.
- Easier budgeting: the temptation to spend recklessly on payday is removed under EWA, and employees can plan ahead to withdraw the money they need to cover their regular bills and expenses.
- Less reliance on credit: with money available to them instantly within their EWA account, employees can save money when unexpected bills arise by using these funds instead of turning to expensive debt through loans or credit cards.
Earned Wage Access is the approach to pay that the flexible, post-pandemic workforce is looking for. It puts them in control of how much they’re paid and when, removes the need for them to deal with payroll teams to do so, and makes it much easier for them to handle the financial commitments in their lives. In an increasingly competitive job market, those businesses who are able to provide EWA will benefit, as they will find it much easier to attract new talent, and to retain existing employees, too.
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