Access to earned wages is not available to everyone

For people struggling to meet bills and pay for daily necessities throughout the pandemic, waiting two weeks for a paycheck isn’t always an option.

Access to earned wages, which allows workers to receive real-time earnings before their scheduled pay date, has become increasingly popular throughout the COVID-19 pandemic as millions of employees have been under economic pressure. According to a exclusive report on access to salary earned by Arizent, the parent company of Employee Benefits News, certain demographics are more eager for these kinds of workplace benefits, especially those who face inequalities and unmet gaps between classes such as economics, race, and gender.

Hispanic respondents indicated an increased need for access to earned wages, more so than anyone else in the labor market. The demographic had the highest use case for buying food with the funds, at 30%, compared to 17% for whites. Thirty percent of white respondents indicated that their primary use of Earned Wage Access would be to balance cash flow, compared to 16% of Hispanic respondents who gave the same answer.

Read more: Does your payroll need a makeover? How Access to Earned Salary Can Help Employees Take Financial Control

This embrace of earned wage access demonstrates its emerging importance in a marketplace and its ability to create some financial flexibility for workers and help them avoid more predatory solutions like payday loans.

“Access to cash is very important, and some of the archaic payroll processes such as bi-weekly payroll can lead to reliance on payday loans, which is simply not in the best interests of employees” , says Sanish Mondkar, founder and CEO of Legion. , an AI-powered workforce management company. “For employers, the ability to offer instant pay for access to earned wages is starting to be seen as a huge benefit – and it’s something we believe will increase employee loyalty.”

Read more: Provide access to CFPB-compliant earned wages for your employees

Employee loyalty is a coveted quality in a tough talent market that is forcing companies to scramble to recruit staff and workers. Extending support to access earned wages to the most vulnerable populations can not only strengthen workers’ financial security, but also improve business outcomes.

“Frequent staff turnover, or lack of ability to fill vacancies, has a direct impact on a company’s productivity and profitability,” explains Seth Ross. Ross is the general manager of consumer services at HR software provider Ceridian, where he also manages the company’s Dayforce Wallet offering, an on-demand payment solution. “By fundamentally changing the concept of the traditional payday, employers can play an important role in providing immediate financial support to employees who need it most, empowering workers to take control of their personal finances while creating business value.”

Read more: Tackling Rising Healthcare Costs with Earned Wage Access

Since its launch in May 2020, Ross says Dayforce Wallet has shown promising returns to its clients.

“Our clients are seeing positive impacts, including a 5% increase in hiring rates and a 9% reduction in the time it takes to fill a vacancy,” he said. “Our customers have also seen a 42% lower voluntary turnover rate among employees using Dayforce Wallet compared to non-wallet users. These numbers continue to reinforce and validate the value proposition of earned wage access. »

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