With the looming recession and feeling of uncertainty, more people than ever before could benefit from earned wage access (EWA). EWA is an on-demand pay solution that allows employees to access their earned but not yet paid wages before payday, all through an app. Despite this benefit becoming a mainstay for employee offerings, some organizations may feel that it isn’t right for them. We spoke with our account executives to compile a list of the top four objections for why EWA will not work and debunk them below.
“Our employees are salaried, EWA will not work for us”
It’s a reality that no matter how much one makes, financial stress can arise. Expenses like marriage, childbirth, moving, and illness can take an unexpected toll on someone’s finances because of the lack of savings cushioning among Americans today – which is why it makes sense for all workers – including salaried employees – to have access to earned but unpaid wages. On top of that, even employees who are saving can view EWA as an important retention tool. American people have gotten used to the on-demand economy, thanks to Grubhub, Lyft, and Amazon Prime. Employees are now looking to get paid when they need it most – and that goes for salaried employees as well as hourly ones.
“We don’t want our team, whether they’re hourly or salaried, to worry about their finances or unexpected expenses when they’re at work. Providing Immediate’s earned wage access solution to our employees helps alleviate financial stress and makes them feel secure; they’re able to focus 100% on residents. That’s critical for us as a healthcare provider organization.”
– Anna B., Immediate customer
“We do NOT want to encourage bad habits”
It is often the assumption that bad habits are started with EWA but that is far from the truth. EWA doesn’t encourage bad habits, but it does prevent bad situations. Our current data shows that 22% of employees use EWA each pay period, with an average of $145 of earned pay accessed per transaction (up from $134 last year). This indicates that those who turn to EWA are using it for small expenses that are off-rhythm from their standard pay period – not frivolous spending. Think about how often a bill does not line up perfectly with payday, such as an electricity bill falling on the 12th of the month and your paycheck not hitting your account until the 15th. Without EWA, these same employees would be forced to turn to high-interest payday loans, indubitably leading to long-term financial burdens.
“We are committed to ensuring our team has access to employee benefits that add value to their lives. Our focus is on creating positive health decisions and we understand the negative impact financial stress can have. Offering ImmediatePay provides a financial safety net in the event unforeseen expenses arise.”
– Max R., Immediate customer
“EWA is NOT a priority right now”
EWA has quickly become the expectation of a standard benefit in the job market, with 80% of employees prioritizing employers who offer EWA. It will soon be a necessary benefit that every employee expects and desires – which means you’re ahead of your competition if it’s already in place! EWA is proven to help with recruitment and retention, and we have seen turnover decrease by as much as 40% after launching Immediate. Lastly, there is good news for businesses that are busy– very little time and energy is needed to implement this benefit for your employees.
“We do NOT want to change payroll vendors”
Hey, more good news! There is no need to change your existing HCM vendors. Immediate seamlessly connects with payroll and time tracking platforms to track wages that are earned but not yet paid, and display these earnings in our app. When a transaction is initiated, Immediate handles the disbursement of the funds, so you don’t need to worry about additional time spent logging deductions or the added management of uploading files – we handle it all. When your existing payday comes around, Immediate automatically deducts any money that was requested and delivered to employees. Best of all, this is completely free to employers meaning there’s nothing standing between employees and their hard-earned wages.
The one topic still causing confusion
The discussions around employee well-being are at an all-time high, but one topic that’s still causing confusion among leaders? EWA. I hope breaking down these four key areas of pushback helps start this conversation with key decision makers at your organization. We can provide value to businesses while keeping employees happy, engaged, and financially well.
9 in 10 employees say financial stress impacts their job performance. With resources like earned wage access available, at no cost to employers, there is no better time to offer financial wellness solutions to employees.