If you’re an employer, chances are you’ve heard of early wage access (EWA) and its growing popularity. But what is EWA? Simply put, it’s a service that allows employees to receive their earned wages before their scheduled payday. In other words, it’s a way for workers to get paid sooner for the hours they’ve already worked.
Experts like Walter Greenfeld in Brooklyn, NY, say it offers some benefits. At the same time, this may not seem like a big deal at first glance. Still, EWA can provide several advantages for employers, including reducing turnover, attracting and retaining top talent, and improving employee productivity. Next, take a closer look at each of these benefits in turn.
What Is Early Wage Access?
Walter Greenfeld says early wage access is a type of payroll advance program that allows employees to receive their earned wages before their scheduled payday. Typically, these programs allow employees to access up to 50% of their net pay on an ongoing basis.
For example, let’s say an employee gets typically paid biweekly on Friday, but they have an unexpected expense on Wednesday. With early wage access, they would receive half of their paycheck on Wednesday instead of waiting until Friday.
Employers can offer early wage access to their employees in a few different ways. One option is to partner with a third-party provider like Earnin or DailyPay. These companies provide apps that allow employees to track their hours worked and request advances as needed. Another option is for employers to develop their in-house program.
Finally, employers can also set up a direct deposit system that allows employees to access portions of their paychecks on an ongoing basis. For instance, they could offer employees the option to receive 50% of their salary on Wednesdays and the remaining 50% on Fridays.
Benefits of Early Wage Access to Employers
There are several benefits for employers that offer early wage access to their employees. Here are some of the most important advantages:
Reducing Turnover
One of the critical advantages of early wage access is that it can help reduce turnover. Studies have shown that financial stress is one of the leading causes of employee turnover. By offering EWA, employers can help ease the financial burden on their workers and keep them happy and engaged. One study found that employees with access to EWA were 25% less likely to quit their jobs than those who didn’t have this benefit.
Attracting and Retaining Top Talent
Walter Greenfeld says in today’s competitive job market, employers need to do everything they can to attract and retain top talent. Offering early wage access is one way to give your company an edge over the competition. Employees value companies that offer EWA because it shows that you care about your workers’ financial well-being. This benefit can also help you attract new talent, as job seekers are often more likely to be interested in working for a company that offers EWA than one that doesn’t.
Improving Employee Productivity
Early wage access can also lead to improved employee productivity. When workers are financially stressed, they often have trouble concentrating on their work. This can lead to lost productivity and decreased quality of work. However, when employees have access to their earned wages before payday, they’re more likely to be able to focus on their work and be productive members of the team. One study found that employees who had EWA reported feeling less stressed about their finances and more engaged at work.
Enhance Your Company’s Reputation
In today’s competitive marketplace, businesses must differentiate themselves from their rivals. Offering early wage access is a great way to do this. By offering EWA, you’ll show your employees that you care about their financial well-being and are willing to invest in them. This will help improve your company’s reputation and make it more attractive to prospective employees. It will also help improve morale among your existing workforce as they feel appreciated and valued by your business.
How to Get Started with Early Wage Access
Walter Greenfeld says if you’re interested in offering EWA to your employees, there are a few steps you need to take. First, you’ll want to research the different providers and decide which is right for your business. You’ll also need to determine how much of an advance you’re willing to offer and when it should be paid out.
Then, you’ll need to set up a system for tracking hours worked and distributing the advances. Finally, you’ll need to communicate your new policy with your staff and provide them with all the necessary information they need to access their wages early. Once these steps are taken, you’ll be able to start offering EWA and reaping the benefits it provides.
Conclusion
As you can see, there are many reasons employers should consider offering early wage access to their employees. This benefit can help reduce turnover, attract and retain top talent, and improve employee productivity. Early wage access is definitely worth considering if you’re looking for ways to give your company a competitive edge in today’s job market.
