It's concerning to see that heavy inflation is making it increasingly difficult for the average American worker to keep up. Shockingly, a recent study found that almost half of hourly workers in the U.S. have no emergency savings, and almost 80% have less than $500 in savings.
To address these financial struggles, employers are exploring alternative pay methods for hourly workers who are living paycheck to paycheck. One of the top solutions is earned wage access.
Through earned wage access, workers can access their already-earned net pay before their scheduled payday. Offering this option not only helps struggling employees, but also offers advantages for businesses.
Let’s take a look at our top 4 earned wage access benefits for your employees and businesses.
In today's job market, it's important to offer attractive benefits to entice hourly workers to choose your company. During times of inflation, providing financial assistance such as earned wage access to your employees gives you a leg up over your competitors. It’s shown that companies that offer a daily pay solution decrease turnover by 40% and increase recruitment by 30%.
In short, when you provide your employees with the convenience of earned wage access, it's less probable for them to seek employment with a company that doesn't offer this benefit.
It’s no secret that happy employees lead to better productivity. By giving them access to their daily earnings and cash when they need it most, they'll be able to focus on work without the added stress of financial worries. This means they'll be more productive, engaged, and less likely to take on a second job just to keep up.
More than half of Americans are currently living paycheck to paycheck. As a result, many are left with unpaid bills and late payments, which can lead to a big hit on a person’s credit score. To avoid this, many turn to credit cards or other lenders, which typically come with high-interest rates and fees.
By offering earned wage access, your employees can avoid such unnecessary fines and fees. This enables your workers to take control of their finances and make more informed decisions about their budgets.
Last but certainly not least on our list is the benefit of offering financial peace of mind to your employees. Unfortunately, every person encounters unexpected expenses, such as medical emergencies or expensive home or auto repairs. Those employees living paycheck to paycheck may not have enough to cover these expenses when they arise.
Earned wage access is a fantastic way to help employees cope with these unexpected expenses. When life throws a curveball, employees can have peace of mind knowing they have access to already-earned pay versus waiting until their next payday. With peace of mind and less stress during a crisis, employees can focus on what's most important.
If you’re looking for more ways to better support your employees financially, earned wage access is a great start. The right solution not only helps your business, but it helps your employees as well. If you’re still unsure, here’s a case study that might better explain some of the benefits of earned wage access. If you're ready to learn more, schedule a free consultation today!
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