For folks struggling to keep up with bills and pay for daily necessities throughout the pandemic, waiting two weeks for a paycheck isn't always an option.
Earned wage access, which allows workers to receive real-time earnings before their scheduled pay date, has become increasingly popular throughout the COVID-19 pandemic as millions of employees were placed under economic strain. According to an
Hispanic respondents indicated an increased need for earned wage access, more than anybody else in the workforce. The demographic had the highest use case for buying food with the funds, at 30%, compared to whites at 17%. Thirty percent of white respondents indicated that their primary use of earned wage access would be to balance their cash flow, as opposed to 16% of Hispanic respondents who gave the same answer.
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This embrace of earned wage access demonstrates its budding importance in a market, and its ability to create some financial flexibility for workers and help them avoid more predatory solutions like payday loans.
“Access to cash is very important, and some of the archaic payroll processes such as bi-weekly pay can lead to reliance on payday loans, which are just not in the interest of the employees,” says Sanish Mondkar, founder and CEO of Legion, an AI-powered workforce management company. “For employers to be able to offer instant pay for earned wage access, is starting to be viewed as a great perk — and it is something that we believe will increase employee loyalty.”
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Employee loyalty is a coveted quality in a challenging talent market that’s left businesses scrambling for staff and workers. Extending earned wage access support to the most vulnerable populations can not only strengthen workers’ financial security, but boost companies’ bottom lines, as well.
“Frequent employee turnover, or lack of ability to fill open positions, has a direct impact on company productivity and profitability,” says Seth Ross. Ross is the general manager of consumer services at
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Since launching in May 2020, Ross says Dayforce Wallet has shown promising returns to their clients.
“Our customers are seeing positive impacts, including a 5% increase in recruiting close rates and a 9% reduction in the time it takes to fill an open position,” he says. “Our customers also found 42% lower voluntary turnover among those employees using Dayforce Wallet than non-wallet users. These numbers continue to strengthen and validate the value proposition of earned wage access.”