Staying ahead of the curve is crucial for any employer. One trend that's recently gained significant traction is Earned Wage Access (EWA). In the UK 15% of all employers now offer it and in some industries, such as Care and Retail, this number is even higher. It’s continuing to grow.

This guide aims to demystify Earned Wage Access and explain why it should be on your radar.

What is Earned Wage Access?

Earned Wage Access is a financial tool that allows employees to access a portion of their earned wages before their official payday. Instead of waiting for the traditional pay cycle, employees can withdraw a portion of their earnings as they earn them. This service is typically facilitated by an Earned Wage Access provider, which integrates with an employer's payroll system to offer this flexibility without disrupting existing processes.

Why has Earned Wage Access Gained Momentum?

1. Responding to the Cost of Living Crisis

With the ongoing cost of living crisis, employees are increasingly finding themselves in need of more immediate access to their funds. Traditional pay cycles don't always align with life's demands, and unexpected expenses can crop up at any time. Earned Wage Access provides a lifeline, offering the financial resilience and flexibility employees need to manage their finances more effectively.

2. The Competitive Labour Market

In today's competitive labour markets, attracting and retaining top talent is more challenging than ever. Employers are under pressure to offer compelling benefits that stand out from the crowd. By providing Earned Wage Access, companies can demonstrate their commitment to employee wellbeing and financial health, making them more attractive to potential hires and helping retain existing staff. In fact, Level has helped clients reduce staff turnover by 50%, read more about this here.

3. Financial Wellbeing

Financial stress is a significant concern for many employees, affecting not only their personal lives but also their productivity and engagement at work. By offering Earned Wage Access, employers can alleviate some of this stress, enabling employees to better manage their financial responsibilities and focus on their roles.

Why Should Employers Care About Earned Wage Access?

1. Enhancing Employee Financial Resilience

Offering Earned Wage Access can significantly bolster an employee's financial resilience. By giving them control over when they access their wages, employees can better manage cash flow, reduce reliance on high-interest loans, and avoid late payment fees. This not only supports their financial wellbeing but can also improve overall job satisfaction and loyalty.

2. Improving Talent Acquisition and Retention

In a labour market where skilled employees are in high demand, offering Earned Wage Access can set your organisation apart. It's a tangible demonstration of a company's commitment to supporting its workforce, which can be a decisive factor for job seekers. Additionally, existing employees who feel valued and supported are less likely to leave for competitors.

3. Boosting Employee Productivity and Morale

Financial insecurity can be a significant distraction, impacting an employee's focus and performance at work. By alleviating some of this pressure, Earned Wage Access enables employees to concentrate better on their tasks, leading to increased productivity and improved morale. Happier, more focused employees contribute to a more positive workplace culture and greater success for the organisation.

Conclusion

Earned Wage Access is more than just a trendy perk; it's a strategic tool that addresses critical challenges in today's workplace. By enhancing financial resilience, improving staff attraction and retention, and boosting productivity, Earned Wage Access offers tangible benefits for both employees and employers. As employers, considering Earned Wage Access as part of your benefits package could be a game-changer in supporting your workforce and achieving organisational goals.