Earned Wage Access & Financial Wellness

On-Demand Pay and Savings [Why They Go Together] | Even

This is the fourth and final post in a series from Even that explains why on-demand Pay must include savings to improve employees' financial resilience.
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Three steps you can take right now as an employer

Savvy employers understand why saving money is so important to their employees’ long-term financial stability. What many people may not know is just how difficult it is for workers to save — or how to pinpoint what the first steps should be in an effort to help.

1. Understand your employees’ financial needs and challenges

In order to provide a solution that works, employers need to take the time to assess where their employees are — financially and otherwise. One in three employees admit to being less productive at work due to financial stress, which is one of many reasons it’s in businesses’ best interest to address this problem. But we also know that employees value employer support for financial issues. According to Commonwealth’s 2019 national survey of lower-wage workers, 76% said they were confident that employer-offered financial security benefits would promote company loyalty.

Benchmarking & Tracking Progress

The good news is that there’s no guessing required here, because employers are in a good position to get this type of data from their workforce. One science-backed way to do this is with the Employer’s Toolkit for Measuring Financial Health, created in partnership with the Financial Health Network. The toolkit contains everything you need to survey employees, calculate the results, and use information straight from the people you’re trying to help to provide the best solution.

2. Select the appropriate tools and approaches to address employee financial needs

There’s no single magic button that can address all employee financial needs. For example, while 401(k) plans are an important retirement benefit, PricewaterhouseCoopers has found that 27% of employees have withdrawn from their accounts to pay for unforeseen expenses well in advance of retirement. Another study found that 18% of workers have cut back on their 401(k) contributions, and 38% don’t participate at all. This is because when employees don’t have enough savings to handle small emergencies or expenses that come up before payday, they have to borrow from their long-term savings or use short-term credit. That makes it even harder to put away money for long-term savings.

Fluctuating working hours or unanticipated bills contribute to financial instability. For these employees earned wage access programs that allow workers to access a portion of their pay early can help them cover expenses while avoiding debt, late fees, or other penalties.

A lack of emergency savings is likely to increase reliance on overdrawn bank accounts, credit cards, and loans, all of which increase debt or carry additional costs.

But one of the most powerful things employers can do to support employee financial security is to help them build emergency savings, so employees can manage their own financial shocks without outside intervention. We know this is a significant challenge for many households: Commonwealth’s analysis of the Federal Reserve’s Survey of Household Financial Decisionmaking (SHED) found that nearly 60% of households making less than $60,000 would not be able cover an unexpected $400 expense with funds from a checking or savings account. This lack of emergency savings is likely to increase reliance on solutions such as overdraft fees, credit cards, and loans, all of which increase debt or carry additional costs. Employers should consider strategies that prioritize emergency savings as part of their approach to financial security.

3. Ensure the tools are accessible, easy to use, and encourage savings

For financial tools to be most effective, employees need to know they’re available, be able to access them, and find them easy to use. This is particularly true for employers who want to encourage emergency savings. Savings accounts are already an option for most people, yet they don’t necessarily lead to success. Similarly, there are many apps, tools, and strategies available to help people save money, but they can’t demonstrate efficacy. People stop using them after a few weeks or months.

Employers will also want to make sure any vendor or partner will help drive awareness among workers so that employees are excited to use it. “Getting started” also needs to be simple. A lengthy enrollment process or required training sessions is less likely to drive engagement than a simple system or a downloadable mobile app. Any solution you explore for your employees should be easy enough for employees to get started and stick with it — and then add enough value to their lives so that they keep using it, and start building their savings.

Finally, employers should be wary of any solutions that charge transaction fees every time an employee has to access their pay early to cover an unexpected expense. If vendors are benefiting from employees’ lack of savings, they are unlikely to encourage the kind of savings that would make early pay unnecessary.

“We’ve made substantial progress to increase the net disposable income of all our employees, and our work with Even will help drive further improvements. Together, we’ll help employees safely navigate cash flow challenges, stay on budget, build financial resilience and reach long-term savings goals.”

– Dan Schulman, President and CEO at PayPal, an Even customer

Help your employees save money now, and build financial stability later

Even’s responsible on-demand pay platform takes a holistic approach to employee finances. The app helps them get paid when they need it, so they can avoid predatory financial alternatives that make problems worse. But Even’s platform does far more than give employees access to earned wages: It helps them build savings so they can manage emergencies on their own, over time, without needing to access early pay through Even’s Instapay feature.

The proof is in the success of our members. At Noodles & Company, employees saved over $550,000 in their first year of using Even. Across all of Even’s employer customers— including Walmart, CoxHealth, Noodles, PayPal, and more—our members have saved more than $50 million, and have avoided over $150 million in interest and fees that would have gone to credit cards, overdrafts, or payday lenders. And 70% of our members say that using Even has had a positive effect on their financial health.

“I can save so easily with this app. I just choose to put 10% of my paycheck into a savings account and it’s like a whole other bank account. I almost always forget it's there. For someone who will easily spend their savings, this is perfect. I’ve never saved anything past $100 and now I have over $500!!!”

– Kiara, Even member


If you’d like to learn more about how we can help your employees build financial resilience in ways that could never be done with a platform which only offers on-demand pay, get in touch.

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