Did you know over half of North American employees are more stressed about their finances today than a year ago? That’s the highest number reported since 2008, and multiple factors drive this unwelcome trend, including the rising cost of living and food.
As for some good news, there are avenues employers can explore to lessen their employees’ concerns about pay without a major impact on their business finances or internal processes. One of those is earned wage access (EWA), sometimes called on-demand pay.
What is on-demand pay?
On-demand pay is an innovative payroll model that departs from antiquated models by allowing employees to access their earned but unpaid wages before their regular payday. Offering employees access to their earned wages and financial wellness tools can actually go a long way to improve employee satisfaction and retention.
It allows employees greater control over their finances: they can pay for unexpected or daily expenses without incurring high-interest credit cards or payday loan debt. And if you’re wondering, ‘how does on-demand pay work?’ it’s important to note that it isn’t a loan or a salary advance–it’s the wages your employees have already earned. It simply reaches their wallets and bank accounts faster.
Earned wage access benefits
Studies show that 95% of employees are interested in working for a company that offers EWA—a demand that has only grown in 2020 with the aftermath of COVID-19*. During the pandemic, more than twice as many people were concerned about losing their income than their health. Providing timely access to earned wages gives your workforce much needed breathing room to live the life they earned.
When an employer demonstrates genuine interest in the financial wellness of it’s team, other benefits follow, including:
With such tangible benefits, on-demand pay is truly an initiative worth employer consideration.
Earned wage access providers
There are a handful of companies that help facilitate EWA, and it can be daunting to pick the right option. A member of Revel’s vetted integrated partners, Payactiv is a best-in-breed solution for financial wellness benefits in general, including (but not limited to) earned wage access.
Payactiv is proven to increase retention by an average of 30% and can save businesses millions in turnover cost. When basic livelihood needs are met, workers are more engaged and focused at work.
Payactiv easily integrates with payroll systems and funds the money so it doesn’t disrupt standard business processes.
In terms of how to access on-demand pay, Payactiv offers flexible solutions for every employee’s needs. Workers can get started from day one with Payactiv Visa® Payroll Cards so they can receive digital off-cycle payments instantly.
Other options for payouts of tips, mileage and payroll efficiency include pay on demand apps and payroll cards.
Here’s a closer look at how it works:
Employees work their shift and the POS platform records the amount of tips earned and/or miles driven by those teammates.
Payactiv receives tip and mileage information and automatically disburses funds to the employees’ card or bank.
Two days later, the funds are settled, and Payactiv is reimbursed by the business for the tips and mileage funds disbursed to their employees.
Interested in more information?
If you’re ready to consider how EWA could improve the financial wellness of your workforce, this blog post is merely a starting point. Learn more at payactiv.com and request a demo today!