Earned wage access is just one weapon in the fight for financial wellness
Workers struggling to extend their paychecks may benefit from access to paid wages, but employers have been slow to provide this coveted benefit.
According to the Society for Human Resource Management, only 5% of large US corporations currently provide access to earned wages with the majority of hourly paid workers. However, this number is expected to rise to 20% by 2023.
By giving employers – especially paycheck-to-paycheck workers – the ability to access the money they’ve already earned before payday, employers are helping to alleviate the significant financial burdens caused by COVID-19 while they are working at the same time retain employees and offer a competitive advantage in recruiting.
Read more: Does your payroll need a revision? How access to well-deserved wages can help employees take financial control
“The world we live in has dramatically changed the way employers and employees work together,” said Brian Radin, president of Comdata Prepaid, a company that helps companies and employers develop payment programs. “Employees have the upper hand over employers, which is very different from the traditional situation here, and if you don’t want it, we’ll hire someone else to do it. It is a labor market for employees. “
Access to well-earned wages is an important component in improving employee financial well-being, but it can’t do all of the work on its own, says Radin. Employees need their companies to really invest in their financial well-being, and that means they provide more than just a helpful tool.
“Employees have a paternalistic point of view when they look at each other [their employer] To help [financial anxiety], “he says.” Access to earned wages is a competitive tool, but it’s not the only thing employers can do. “
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According to Radin, employers can increase their minimum wage and add better benefits for employees who provide financial education and even coaching.
“All of these things together are what most employers, especially larger employers, have to figure out,” says Radin. “But this is a way of making yourself more competitive as a company and giving your employees more security.”