The age of the biweekly pay period seems to be drawing to a close, with workers increasingly preferring to receive their wages as they earn them rather than waiting days or weeks before they can access their pay. A survey found that a record 60% of working Americans wanted their employers to give them access to wages each day.
Implementing this earned wage access (EWA) is a key way to improve employee loyalty, and it offers companies increased visibility into their cash on hand, helping to improve overall money mobility. This month’s PYMNTS Intelligence examines the benefits of instant payment systems for corporates as well as their employees and freelancers.
Just a few years ago, payday was a concrete date every two weeks, but now some employees can make it every single day. It is popular among those who have the opportunity, as 56% of those with EWA said they had used it.
For employees, the benefits of EWA are self-evident. Almost three-quarters of Americans said they are stressed about their finances, with many reporting they live paycheck to paycheck and must turn to high-risk options like payday loans to resolve unexpected expenses. EWA removes this need by ensuring that workers’ money is available as they need it, rather than forcing them to take out loans.
Corporates, meanwhile, are growing more aware of EWA’s benefits. Almost two-thirds said EWA can be a low-cost way of recruiting and retaining employees, as 75% of millennials said EWA availability would influence their acceptance of a job offer. Additionally, 96% of corporates that offered EWA said their employees liked it, that it helped them attract talent and that it improved their employees’ sense of financial security.
Gig workers and contractors are more likely to face financial insecurity than their salaried counterparts due to the part-time nature of their work. Compounding that issue is the reality that they are much more likely to be paid late. Three-quarters of gig workers said they want to be paid by their employers more often than the traditional bimonthly pay period to offset these financial challenges.
The recruitment benefits for corporates could be significantly enhanced if instant payroll was extended to gig workers and contractors, as these individuals look for work more often than salaried workers and are more likely to be enticed by these benefits. Happier employees are more productive ones, so any expense of offering instant payroll would likely be offset by increased revenue.