Whether you’re here to understand what Earned Wage Access (EWA) is all about or shopping for a solution, it doesn’t matter - either way, you’re looking at proactively supporting your workforce, and that’s the kind of mindset that makes your company a place where people want to work, so kudos to you.
We’re going to break down everything you need to know about on-demand pay. Over 90% of employers say Earned Wage Access (EWA)helps them attract and retain talent.
WHAT IS EARNED WAGE ACCESS?
Earned Wage Access is revolutionizing payroll infrastructure. Employees are no longer bound by monthly pay periods. With EWA, they're free to access a percentage of the salary they've already earned whenever they want.
You can think of on-demand pay as an interest-free advance on your employees' wages. Companies typically add on-demand pay to their benefits to help workers who might be dealing with cash flow issues. And it's quickly becoming an established business practice.
Now that we’ve unpacked what Earned Wage Access is all about, let’s determine whether or not it makes sense for your business.
SHOULD I OFFER EWA TO MY EMPLOYEES?
Yes.
If you’re skeptical, consider this:
- EWA reduces turnover by 29%
- EWA increases job applicants by 2X
- EWA cuts absenteeism by one day per employee per month
- Enjoy full benefits of earned wage access.
Not only is EWA a competitive differentiator in the war for talent - it’s an effective tool to help you keep that talent over the long term. 88% of employees expect their employers to offer financial support and resources.
SIGNS EMPLOYEES NEED EARNED WAGE ACCESS (EWA)
You don’t want to offer another voluntary benefit that employees won’t use. So before you jump on the EWA bandwagon, here are telltale signs your team will actually use it:
- You already have an employee loan programme
- Employees routinely ask you for paycheck advances
- Employees are taking out payday loans or other predatory loans
- You’re changing pay cycles (from biweekly to monthly, for example)
- You employ permanent workers
HOW MUCH DOES EWA COST
Nothing to the employer.
That’s right, EWA doesn’t cost employers a cent. Most solutions provision and fund accounts, manage the platform and provide customer care. That way, you can focus on what matters most - your employees.
Employees pay a transaction fee of up to 5% (efforts to reduce it) for payouts directly to their bank accounts, or mobile money account.
EWA BENEFITS FOR EMPLOYERS
It's easy to see how on-demand pay might benefit your employees but wait until you see how it can also benefit you and your business.
- Employers who provide on-demand access to earned wages experience up to 29% reduction in turnover
- They also receive 2X more job applicants
- Employers who offer access to earned wages, see a 5% reduction in hiring costs, representing significant savings
- Sikamaster businesses offering loan programmes to employees have saved significant savings by providing access to earned wages instead
- More on Employer Benefits.
EWA BENEFITS FOR EMPLOYEES
Instant pay can have a profound impact on your workers.
First off, it gives employees much-needed flexibility. With early access to their earned wages before payday, they can meet unexpected expenses without having to resort to predatory lenders (not to mention avoid overdraft fees).
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