In 1975, direct deposit programs were introduced as a convenient way for employers to pay their employees without issuing physical checks. This was groundbreaking at the time, and direct deposit soon became the standard method for payroll management. Nearly 50 years later, we have reached a point where the evolution of technology has influenced change in nearly every aspect of human life. So why not how we get paid?

Today’s employees expect more from their employers and more flexibility in how they get paid. For example, 60% of American workers believe that all employers should offer earned wage access (EWA) to their employees. Younger generations are even more receptive to this idea, with 83% of workers aged 18 to 44 years old believing they should be able to access their earned wages at the end of each workday. 

From paycards to EWA, improved payroll methods are emerging. And although employee demand for these features is rising, many payroll and business leaders have yet to take the leap. Let’s change that.

 

The Major Benefits of EWA

EWA is a pay delivery system that allows employees to access their wages instantly, without having to wait for payday. There are a multitude of benefits of this feature for both employees and employers, including these four major benefits:

 

1. Streamlined Payroll Operations

EWA streamlines payroll operations for employers by reducing the need for paper checks or manual wage advances. Ultimately, employers can save time and money by eliminating the administrative work associated with traditional payroll management, leaving time for other tasks.

EWA is changing the way we approach payroll. It completely alters the cyclical nature of waiting for payday to pay bills or other necessary payments. Ultimately, this increase in financial wellness and decrease in financial stress among a company’s employees would not only improve their quality of life, but also the company’s operations. As more companies report their EWA success stories, employee demand for this feature is only increasing.

 

2. Improved Financial Wellness

Instant Financial’s Wages and Wellbeing survey of today’s workforce identified that 54% of Americans worry multiple times a week about whether their funds will last until their next payday. One of the most notable benefits of EWA is an increase in financial security and wellness—allowing employees to take control of their finances, follow best practices, and make better financial decisions. That same survey even noted that more than 50% of the American workforce would be likely to avoid major financial pitfalls if their employer offered EWA.

 

3. Increased Employee Retention and Productivity

A decrease in financial stress for employees has been shown to increase company-wide employee productivity, attendance, engagement, and employee satisfaction and retention. In fact, 62% of surveyed employees said that they are more likely to stay longer at a job that offers EWA. What’s more, 62% of respondents stated that they would feel more valued as an employee if their employer provided the feature.

 

 

4. Improved Competitiveness in the Job Market

Offering EWA can give an employer a leg up while searching for top talent in today’s competitive market by improving the perception of the company among hiring prospects. For instance, 79% of surveyed American workers would be more interested in applying for a job that offers EWA than one that doesn’t.

Companies that do not offer this benefit are already at a disadvantage compared to those that do. And as more companies adopt EWA, employee expectations continue to rise.

 

BONUS: Instant = Optionality for Tips, EWA, Payroll

Giving your employees instant access to their earned wages, tips, or their entire paycheck, responsibly with Instant, is a great alternative to traditional pay methods. Giving employees the option to choose how they get paid means they have complete control over their wages and can choose what they do with their money. Instant offers a Visa® debit card, allowing employees to freely use the benefits of EWA. They can shop anywhere that accepts Visa, withdraw cash from an ATM, or transfer their earned funds to a bank account, all while continuing to help them avoid check cashing locations and other predatory alternatives.

Additionally, for electronic tips, employers don’t have to manage cash payments to their employees. Instead, they can utilize easy, safe, digital options to pay tips directly to employees electronically at the end of every shift. This is especially valuable as there continues to be an increased demand from employees for pay options and flexibility. 

 

It’s Time to Make the Change

Adopting EWA is essential for employers who want to stay competitive in the job market, where expectations are rising higher than ever before, and rightfully so. EWA is becoming a necessary perk that potential employees expect from their employers, much like unlimited paid time off or competitive health insurance.

Many payroll specialists and business leaders may be hesitant to implement EWA due to the perceived effort it would take to completely rework their company’s payroll operations. However, EWA is easy to implement into a business.

EWA providers typically offer solutions that integrate with existing payroll systems to further ease implementation. Instant Financial, for example, integrates directly into a company’s existing payroll and time and attendance solutions, and is compliant with all state wage and labor laws. Set-up is seamless, with zero disruptions to existing processes and no additional work for the company. With Instant Pay, employees can track their pay and spending in the app and claim a portion of their pay after each shift to make a purchase or transfer wages to a bank account. Combining this with the Instant Card, employees can access their pay instantly, make purchases anywhere Visa® is accepted, and access thousands of surcharge-free ATMs.

Payroll needs an upgrade. It needs a solution that meets the expectations and improves the financial wellness of today’s workforce. It needs flexibility and options. Join the revolution. A payday revolution. For more information, reach out to Instant.

Tal Clark is CEO of Instant Financial.

 

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