Financial wellness is a cornerstone of overall employee well-being.
However, many employees struggle with financial stress and living paycheck to paycheck. Financial stress can significantly impact employees’ mental and physical health, job satisfaction, and productivity.
To address this, industry leaders are turning to earned wage access (EWA) as a powerful tool to enhance employee financial wellness.
EWA allows employees to access their earned wages before their scheduled payday, providing greater financial flexibility and reducing reliance on predatory payday loans or credit card debt. This gives employees greater control over their finances and helps them avoid pitfalls that can damage their overall financial picture.
Financial Wellness Benefits of Earned Wage Access for Employees
EWA offers numerous benefits that directly contribute to employee financial wellness:
- ◾Reduce Financial Stress: When employees are financially stressed, focusing on their jobs and bringing their best selves to work may be difficult. EWA can help by allowing employees to be paid on their schedule for all life’s expenses. According to an August 2023 DailyPay User Survey, 60% of DailyPay users surveyed say that DailyPay helps reduce their financial stress.
- ◾Avoid Predatory Lending: When unexpected expenses arise or bills don’t match an employee’s pay schedule, they may be tempted to turn to predatory loans or credit cards. EWA offers a more financially sound alternative.
- ◾Improve Financial Planning: With EWA, employees can more effectively align their income with expenses. This flexibility can help workers avoid late fees, overdraft charges, and other costly fees often arising from misaligned pay cycles and bill due dates.
- ◾Increase Savings: By accessing their earned wages on their schedule, employees can build savings for their future goals. With DailyPay, employees can set aside money for payday using Save — either once or automatically — so they don’t transfer more than they want.
Benefits of Earned Wage Access for Employers
Employers who offer EWA may see benefits beyond improved employee financial wellness. These can include increased job satisfaction, better retention rates, and enhanced ability to attract top talent. EWA not only benefits employees but also offers advantages to employers:
- Improved Employee Retention: Financial stress is a leading cause of employee turnover. Employers can demonstrate their commitment to employee well-being and increase retention rates by offering EWA. In fact, 95% of companies offering an EWA solution today believe it has a positive impact on employee retention, according to a September 2023 Hanover Research Study.
- Enhanced Employee Engagement and Productivity: Employees who are less stressed about their finances are more likely to be engaged and productive at work. With improved employee engagement, companies can expect higher productivity and more motivated employees.
- Attracting Top Talent: EWA is becoming an increasingly popular benefit among job seekers. Offering EWA can give employers a competitive edge in attracting and retaining top talent. According to Hanover Research, 96% of companies offering an EWA solution today believe it has a positive impact on employee recruiting, the Hanover study indicated.
EWA is a Proven Benefit
Earned wage access is a valuable tool for promoting employee financial wellness. By offering EWA, employers can help their employees reduce financial stress, avoid predatory lending, and achieve greater financial stability. This, in turn, leads to a more engaged, productive, and loyal workforce.
About DailyPay
pay platform that gives your employees access to their pay when they want it. DailyPay’s Platform boosts employee financial wellness and keeps them more engaged, motivated and happier at work. For employers, this translates to improved retention and increased productivity.