This fintech is improving companies' retention by 29% with earned access wages

Tate Hackert spent the majority of his adolescence working on fishing boats in Vancouver, Canada, socking away the surprisingly impressive income he made into his savings. By the time he was 16, he'd saved up enough money to take out a second mortgage for a friend who needed it, but didn't have the means to get one for themselves.

Hackert quickly realized that he was able to help more people who had fallen on hard times — so he did. Between the ages of 16 and 23, he lent out approximately $300,000 in short-term, small dollar loans to customers that he found online. Within the hour of publishing a Craigslist advertisement, Hackert would have over 300 emails from people asking for $1,000 to $2,000 to get them through the month.  

"I started realizing that for these individuals who are living paycheck to paycheck, the only real options that they had available to them were these egregious small dollar short term loans or to simply take a late bill payment and a hit to their credit," he says "I thought to myself 'there has to be a better way.'" 

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Hackert turned his highschool side gig into a full-blown business, co-founding ZayZoon in 2016, a fintech company that provides employees with earned wage access as a voluntary benefit.

"Fast forward a number of years and ZayZoon has helped pioneer earned wage access," Hackert says. "This concept of giving employees the ability to unlock the wages that they've earned but haven't yet been paid for yet." 

ZayZoon is an employer sponsored benefit that companies can add to their HR and payroll systems. Employees are granted access to up to 50% of their next monthly or bi-monthly paycheck instantly, for a low cost fee or sometimes free of charge. As a result, the 3,000 small-to-midsize employers ZayZoon works with have seen a 29% decrease in employee turnover and a 79% increase in recruiting, according to company data. 

"We always thought of ZayZoon as a tool that could help increase the productivity of the workforce — we didn't really necessarily think about it in terms of retention and recruitment," Hackert says. "But employers now see the need for a differentiating benefit, for providing an employee flexibility so they don't go across the street for 25 cents an hour more or the access to pay that can help that employee through a tough time." 

Seventy-eight percent of users said access to their earned wages helps them pay their bills on time and avoid late or overdraft fees, according to a recent survey conducted by DailyPay, a financial services company. Seventy-four percent said access to their earned wages has helped reduce their financial stress, and 70% of users said access to their earned wages has helped them avoid taking out a payday loan. 

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More and more employers are starting to recognize that they play a role in their employees' financial well-being, Hackert says. But giving employees a raise isn't necessarily easy in this market, harder still for small or medium sized businesses. Which is why they're looking for any benefit that can add value to their offering that can show employees they care.

"It's not just employees at corporate businesses," Hackert says. "We're seeing it in gig work or part-time work, they're also getting the option of getting paid on demand. And from my vantage point, it's just going to accelerate further."

But if it's so beneficial to both employees and employers, what's been keeping employers from normalizing it? 

"The biggest concern or the biggest objection that [we hear] when talking to an employer really comes down to the work involved — they assume there's going to be a very big lift," Hackert says. "But we've taken the integration time from what may take companies weeks or months to thirty minutes." 

The lift may be small but the benefit is big, according to Hackert. He recalls a situation where an employee was able to access the first half of their next paycheck in line at the store when they realized they would need some more funds for their groceries.

"This isn't just a product that is used by customers that don't have or don't make a lot of money," Hackert says. "Whether you're making $35,000 a year or $135,000 a year, if you're not budgeting correctly your bills can catch up to you. This is a solution for everyone."