As businesses reopen and our economy begins its long recovery from COVID-19, many companies are looking to staff back up quickly. However, the workers coming onboard aren’t just facing the normal stressors of job hunting and being a new employee. They’re trying to recover from weeks, if not months, of lost income and general financial disruption. New employees are stressed, with bills and essential needs that can’t wait any longer. This is where you, as an employer, can help — by giving your new employees access to their own pay on demand.
The events over the past few months have destabilized almost every aspect of life for millions of Americans. People have had to change how they get around, how and where they eat and feed their families, how they care for and educate their children, and how they keep in touch with family and friends. It’s been a prolonged period of uncertainty and instability — especially when it comes to finances.
The fact is that many of the people you’re hiring right now were laid off, and have been out of work for weeks or even months. These are folks that need financial stability more than ever. For example, nearly half of lower-income Americans reported household job or wage losses during COVID-19. Back in April, 84% of Americans were already reporting that they needed another stimulus check because the first one wouldn’t sustain them even for one month. As of mid-June, the debate was still raging among congressional leaders about whether a second stimulus check would even happen. Most people didn’t have nearly enough savings to fill the gaps, and began turning to predatory solutions like short-term credit, overdraft fees, and payday loans.
Now imagine being in this precarious financial situation, excited to be starting a new job, but still not having access to the money you need right now. Payroll isn’t always a flexible experience for new employees, especially ones who are strapped for cash. New workers could be waiting up to three weeks, or even a full month, to be paid. The employees you’re bringing on board are trying to put their lives back together and can’t afford to wait that long — but there’s a simple benefit you as an employer can offer that solves this problem.
Traditionally if an employee needed money before payday, they could approach their manager for an advance. But this places a large burden on workers to share personal details and endure uncomfortable conversations. As a brand new employee who doesn’t want to “make waves,” this proposition is even less appealing. Many would just pursue other means, even if those options — incurring overdraft fees, taking out an expensive payday loan — just made things worse down the line.
Earned wage access (EWA) lets you offer your employees a way to get paid early whenever they need it without impacting your payroll and finance teams. Brand new employees could even get paid on day one if they needed to. When we surveyed our own members, we found that 53% of them use on-demand pay for bills, and 38% use it to pay for essentials like gas, rent, and groceries. For people who’ve gone weeks or months without income, and simply can’t keep waiting, this is a game changer: It could help get bills paid faster and avoid late fees or even service shutoff. It could ensure people have enough gas in the tank to make it to day two on the job. And even for employees who may not need it, the peace of mind itself is valuable; it’s a meaningful way for you, as an employer, to offer a backstop of certainty for your workers when so many other things are up in the air.
On-demand pay is a popular benefit even in normal times. At Walmart, Even’s money management app, which includes a way for associates to get paid early, is the third-most popular benefit — right behind 401(k) and health insurance. Helping employees reduce the stress that comes with financial shocks is a smart way to invest in their quality of life, and help them build financial wellness.
As an employer trying to re-scale your business, you’re looking for ways to hire good people as fast as you can. Your competition is too. To stand out as the top choice, you’ll want to give the benefits that offer concrete, valuable ways for people to make their lives stronger. A responsible earned wage access solution — that also helps your employees build savings and establish long-term financial resilience — will help you get there. To learn how we can help you ease financial stress for your employees quickly, get in touch.
Get updates around new research and findings in your email.