Sponsored by: ADP
Financial stress is a real employee concern these days. Prices are higher across the board – gas, food, housing. There is also a looming recession on the horizon. So how can employers help alleviate some of this stress?
As the modern workplace continues to evolve, so should the ways employees get paid. Many employers are now offering employees the option to access their wages at much-needed times through Earned Wage Access (EWA) vs. having access to their pay only at the designated pay cycle. This benefit offers employees much-needed financial flexibility and peace of mind. For employers, it can improve employee retention, satisfaction, and productivity by helping employees redirect their mental focus on work rather than financial stresses.
So, it’s really a win-win for both employees and employers.
Our Guest: Michelle Young
On this latest episode of #WorkTrends, I spoke with Michelle Young, Vice President of Operations for ADP’s Employee Financial Solutions Group. Michelle is an innovation expert and a trusted advisor to corporate executives in orchestrating business and fiscal strategies with B2B and B2C models.
Let’s talk about financial wellness. A very hot topic right now. Looking at this through the lens of ADP, how do you define financial wellness in the workplace? Michelle:
That’s a great question and very on point right now. When we at ADP think about financial wellness, we immediately go to the source of pay. That’s where we can promote confidence. We can help our employers offer their employees flexible pay methods that are beyond standard pay cycles. Like earned wage access, which, if you haven’t heard, is a very hot topic right now. It really helps to align unexpected expenses with income.
Reducing Employee Financial Stress
Employees can avoid spending money on overdraft fees, late fees, or even payday loans with earned wage access. And that further increases their ability to save and reduce financial stress.
Sometimes, when unforeseen expenses don’t align with income, such as a medical bill or a home repair, it can make any employee, even financially responsible ones, feel helpless. And that often directly impacts their performance in the workplace.
What is Earned Wage Access?
What can employers offer employees around earned waged access? Or, EWA for short. Let’s talk more about what EWA actually is and how it works.
Promoting financial wellness ties to our EWA story. So EWA earned wage access is a valuable financial wellness benefit that allows employees to access a portion of their income that they’ve already earned. As opposed to waiting until the next pay cycle.
How Are Employees Using Earned Wage Access?
Employees use their earned wages in various ways, varying by demographic and age segment.
Employees ages 18 to 24 tend to use it to reduce the stress of not having enough cash until payday. Maybe to buy groceries, pay off a loan, or even rent. As we move up, the 25 to 44-year-olds typically use it for family-related expenses or to pay bills. The 45 to 64-year-olds are also using EWA for emergency-related expenses or paying bills and use it for an emergency medical expense, which typically impacts the Gen Xers and the Boomers with more frequency.
ADP Research Key Takeaways
There were a lot of really juicy findings in the ADP Earned Wage Access Research Study done in December 2021 to January 2021 timeframe, What are some key takeaways?
There is broad interest in EWA from workers in every age group, every education level. Seventy-six percent of workers across all age groups say it’s important for their employer to offer it. And 82% of employers that don’t offer it are interested in actually offering it. Additionally, 59% of millennials would give priority to a job with an employer that offers earned wage access. And 75% say that the availability of VWA would, in fact, influence their acceptance of a job offer.
I hope you found this episode of #WorkTrends helpful, I know I did. To learn more about the EWA metrics, download ADP’s latest white paper: “Earned Wage Access: Tapping into the Potential of Flexible Pay for Today’s World of Work”