The Sectors Driving Earned Wage Access Growth
Earned Wage Access is fast emerging as a revolutionary new way to pay employees more flexibly. Instead of tying employees down to receiving a lump sum on a fixed date every month, their pay accrues daily within a cloud-based money movement solution, which they can then access to withdraw however much money they need, at any time they want.
EWA therefore gives employees far more flexibility in how they’re paid, and in their personal finances overall. They can always access the funds they need when they need them, whether to cover regular bills or unexpected expenses, without having to rely on debt or credit. And the motivation of seeing their pay balance rise day by day can encourage them to be more productive in their work too.
Far from being a niche innovation that is only useful for a limited range of companies, EWA is gaining traction across a wide variety of industries. This blog highlights four diverse areas where EWA is making a real difference to employee experience.
The Gig Economy: Flexible Pay for Flexible Workers
Many people who choose to work within the gig economy do so because they enjoy being able to choose when and where they work. However, in other cases, many are forced to do so as they’re unable to find more regular, stable employment. In either case, fast access to the money they earn each time they work is vitally important.
In September 2020, taxi giant Uber introduced a new instant-access function within the app that it provides to its drivers in the United Kingdom. Previously, drivers had their earnings transferred to them automatically on a weekly basis. But now, Uber has rolled out two faster cash-out options.
When cashing out an earned amount of their choice, drivers can be paid within two business days for no charge, or instantly for a charge of £0.50. This means that every driver can be paid in a way that better meets the demands of their personal lives.
Retail: Responsible Employers Helping Their Workforces
Good businesses recognize the importance of pay in the lives of their employees. This is especially the case with bigger companies that employ large numbers of people on lower incomes, and some employers are using EWA to help their employees manage their money better.
American retailer Walmart is an excellent example of this. It set up an EWA system back in 2018 that allows employees to access some of their wages in advance, so that they can avoid credit card debt, interest payments and payday loans that can quickly lead them into a debt spiral. Strict limits are in place to ensure the system is used properly: employees can only be paid early eight times a year without incurring charges, can do so only once per pay period, and can never withdraw more than half of the net wages earned.
The system has proved popular with the workforce, and more than 250,000 Walmart employees made use of the service in its first 12 months of operation.
Healthcare: Supporting Staff at a Time of Crisis
Care home staff have been put under particular strain by the COVID-19 pandemic. Many have had to work long hours for relatively low pay, and have had to care for many of the people who are most at risk of complications from coronavirus. Any personal financial worries employees might have had will have only added to the strain.
To combat this, UK health provider Bupa has rolled out EWA to allow its workforce to take pay advances if they need it. The result is that the organisation has advanced nearly £10million in wages to its workforce, helping them cover their bills and unexpected expenses without getting into debt.
The wider effect on the workforce has been significant. An internal employee survey found that two-thirds of those enrolled into the service had been able to avoid using a payday lender for a particular bill, and more than half said that their overall finances had improved. Bupa also found that flexible access to money meant that workers looking for extra shifts were more likely to do so with them, rather than mixing and matching with another company.
Delivery Drivers: Instant Pay in a Cashless World
Many food delivery drivers have been used to getting their pay directly from customers, through their share of the cash payments they take when delivering, plus through the tips they receive. But as card payments and online ordering has become increasingly dominant, maintaining instant access to earnings has become far more difficult.
To remedy this, a group of Pizza Hut franchises in Canada have adopted a mobile-app based EWA solution that incorporates instant payouts. Through this, drivers can see how much they have earned, including any gratuities they’re entitled to, and access this pay within the same day. This gives drivers the confidence that, even though they may not get to handle payments directly any more, that they’ll still be able to be paid quickly and fairly.
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