If there’s one thing the pandemic taught us, it is the importance of employees’ wellness and the overall impact it can have on your business. And one factor affecting their well-being and work performance is financial stress caused by the rising prices of commodities. Inflation is also one of the reasons why workers nowadays do not stay in companies for a long time. In this article, we have elaborated on what is Earned Wage Access and why your business needs it.
Aside from a competitive salary or the privilege of working remotely, having the utmost support in times of need is also what employees are looking for in a company. And the simple solution for that is by including Earned Wage Access in your payroll systems. The importance of EWA cannot be emphasised enough. Luckily for you, this article will cover what it’s all about, how it works, and what’s in it for your business. Read on to learn more.
What Is Earned Wage Access (EWA)?
Earned Wage Access (EWA), often referred to as on-demand-pay or instant pay, transforms the payment system of how workers are compensated. As opposed to receiving the salary at a set period date, typically at the end of the week or the end of the month, EWA enables employees to accrue their earnings prior to payday. They can withdraw a portion of their earned salary whenever they want, allowing them to have unmatched control over their finances. This is why there is great importance of EWA. If you want to learn how you can manage your money, then read our blog TOP 4 WAYS FOR MANAGING MONEY IN DAILY LIFE.
Simply put, EWA could serve as a safety net for your employees when they have unpaid and emergency expenses. Instead of waiting for payday, they can have quick money available to use. Understanding the importance of EWA will be beneficial for the employees as well as for the organisation. It avoids the possibility of financial ruin caused by different kinds of loans. By employing EWA in the employee benefits your company offers, you’re helping them maintain financial stability. To get ahead in your career, you must understand the importance of self-management skills. Know about the ways to develop self-management skills in our blog IMPORTANCE OF SELF MANAGEMENT SKILLS: GET AHEAD IN YOUR JOB.
How Does EWA Work?
Under EWA, employees anticipate having access to their pay at all times. So, they’re able to request their earned salary anytime they want. But since the traditional payroll practices couldn’t meet the demand, integrating technologies in HR payroll systems is essential. Ideally, a cloud-based money movement system that transforms portions of employee pay into a self-service activity should be the right way to manage EWA. It is crucial to understand the importance of EWA and implement it in your organisation. It should allow them to log in anytime, view their earnings, and withdraw a portion of it through a web-based portal or mobile application. You can partner with many EWA systems available all over the world.
Nonetheless, depending on the type of app used, it works by first, verifying that the employee has completed the minimum work hours set by the employer. From there, they can request an advance on their paycheck. Then, the app deposits the remaining salary on the set payday as the payroll period ends.
Why Does Your Business Need EWA?
1. Gives a Competitive Edge in Recruitment
Knowing how tough the competition is in recruitment, EWA gives your company an edge, keeping you ahead of the others. Having the most desirable benefits such as this draws the attention of job-seekers. Hence, take into consideration the importance of EWA and enjoy its long-term benefits. It is one of the privileges one can have in a company. And applicants learning about this benefit that your company offers can boost your brand visibility in the workforce, increasing the number of applications coming in. To know about the skills that a recruiter looks for in a candidate, read our blog TOP 6 TRAITS INDIAN RECRUITERS SEARCH IN THEIR EMPLOYEES.
2. Increases Productivity and Efficiency
When you assure your employees that they won’t have to hold onto their last bill until the next pay period, their financial stress will diminish. The Importance of EWA must be considered while taking any decision regarding the employees as nothing can increase their efficiency more than EWA. Knowing that they can pay their bills on time, cover emergency expenses, and generally feel secure, you give them peace of mind that could reflect in their work performance. Simply put, EWA takes away their financial worries, shifting their focus toward the task at hand. To increase efficiency at the workplace, you must read our blog DEVELOP INTERPERSONAL SKILLS: INCREASE WORK EFFICIENCY.
3. Prevents/ Resolves Health Issues
Sudden health issues are nothing new for anyone. It is a challenge that everyone in the business industry faces. But you must know that it doesn’t only affect your finances, but also your ability to work efficiently. By allowing your employees to have access to their earnings whenever they need it, you ensure that they have a fund to use for medical emergencies. The importance of EWA cannot be emphasised enough. Always remember that having peace of mind regarding medical bills is incomparable to “best wishes” or “get well soon” cards.
4. Improves Employee Retention
It goes without saying that when workers feel valued and heard, they are more likely to stick with the company, often known as employee retention. When employees believe that their benefits are insufficient or that your company does not care about their financial well-being, their eyes will wander until they find a firm that provides them with what they need. Employees should understand their responsibilities and work accordingly. To grow in your career, you must develop the necessary skills. To know about one of the most crucial skills, read our blog IMPORTANT ANALYTICAL SKILLS IN A JOB THAT CAN’T BE OVERLOOKED.
By having EWA benefits, you’re also giving them assurance about their finances. With that, employees will most likely be more active at work, reducing their absenteeism and thoughts of resignation. The feeling of being valued at work may result in a deeper sense of loyalty, boosting higher retention rates. By that, we mean more savings by not having to hire and train new people. Understanding the importance of EWA will help you grow your company to another level.
Our employees are what makes the company thrive. They are more than just assets—they are living, breathing people who need care. That being said, keeping them at their best is vital. Providing Earned Wage Access can empower them as your employee and as an individual, helping them be at their best at work. So, if you’re considering EWA in your payroll system, now is the right time.