UK 
United States
In the current cost of living crisis, many employees are finding it harder to manage unexpected expenses between paydays.
With inflation driving up everyday costs, from groceries to utilities, financial stress is at an all time high. Research has demonstrated that nearly 40% of UK workers find financial pressure the top cause of their stress outside of work, and this stress may bleed its way into their professional performance.
Earned Wage Access has emerged to ease the financial burden many are currently facing. This innovative benefit allows employees to access their earned wages before payday, offering flexibility and reducing financial pressure. In this article, we will explore how payroll teams can best implement Earned Wage Access to support employees during times of financial hardship.
What is earned wage access?
Earned Wage Access (EWA) is a financial service that allows employees to access a portion of their wages before official payday. This can assist with unexpected expenses, such as a car breakdown or an unexpected bill, helping to alleviate financial stress by avoiding overdraft or credit card use. Often, employers will offer EWA through an external provider such as Wagestream or CloudPay, which integrate with payroll systems and employees' bank accounts. Employees can request a percentage of their earned wages early, often via an app or through the payroll platform.
There are some limitations to this. Many EWA providers will set a limit on the payment amount. Wagestream, for example, only allows 50% of a person’s monthly salary to be withdrawn. Additionally, some EWA services can charge transaction fees or interest for using them, which the employer can choose to subsidise or make the employee responsible for.
How EWA can improve financial wellbeing
Being financially stable is a key aspect of overall employee wellbeing. Offering EWA can have significant positive effects, including:
Reduced financial stress: Accessing wages before payday can help employees cover unexpected costs, reducing reliance on high-interest loans and financial hardship.
Better financial management: Employees can better manage day-to-day expenses and allocate funds directly towards savings, promoting long-term financial stability.
Increased job satisfaction: Knowing they can access wages when needed enhances employees’ sense of financial security, fostering greater job satisfaction and loyalty.
These benefits can significantly boost employees' morale and productivity. With more control over their finances, employees feel empowered to manage financial challenges, in turn driving engagement and performance at work and aiding in business growth.
Choosing the right EWA provider
When it comes to implementing Earned Wage Access into a business, payroll teams must ensure that the service integrates seamlessly with existing payroll systems. Choosing the right provider is central to providing a smooth and positive experience for all employees. Payroll teams should consider:
Reputation and reliability: Ensure the provider is trustworthy and has a strong reputation for secure transactions and responsive customer support.
Technology integration: The provider should easily integrate with existing HR and payroll software, minimising disruption.
Costs and fees: Compare providers to understand any costs or fees associated with EWA and how they are structured.
User experience: The platform should be intuitive for both payroll teams and employees, offering easy access to wages and clear instructions.
Utilising consultancy services
Implementing Earned Wage Access can be a complex process, but with the right expertise, payroll teams can manage the change effectively. Phase 3’s payroll consultants can guide organisations through the selection of the right EWA provider based on their unique needs. We offer support throughout the setup process, as well as training for both payroll teams and employees to ensure they can use EWA services correctly. We’re always available for ongoing support to resolve any challenges that may arise.
Conclusion
In summary, implementing Earned Wage Access through payroll systems can be an effective way to enhance employee financial wellbeing. By reducing financial burdens and providing monetary control, it can strengthen the relationship between employees and the employer and enhance the overall satisfaction of both parties.
Considering implementing an Earned Wage Access service into your business? Phase 3’s payroll consultancy services are here to guide you through the process, offering expert guidance and ongoing support. Visit our website to help uplift your employees' financial wellbeing and improve your workplace’s overall success!
