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Having access to pay as needed, rather than just on payday, is an enticing prospect for many employees.
About three-quarters of employees say it’s important that employers offer earned wage access (EWA), aka on-demand pay, according to ADP data from December 2021 to January 2022. Over one-third of Americans either want to or already have access to their pay as they earn it, according to PayrollOrg’s 2023 “Getting Paid In America” survey.
“For today’s workforce, transparency into the payroll process, the ability to access earned wages faster and more frequently, and options for self-service technology are critical to maintaining a strong employer-employee relationship,” Tom Hammond, VP of corporate strategy and product management at Paychex, said in a press release.
Financial stress can negatively affect an employee’s work life, where it “can lead to increased absenteeism and tardiness, stress leaves, higher claims on benefit plans, employee turnover, decreased morale, as well as lower quality work, avoidable errors, and inabilities to focus on projects,” according to research by financial planning firm Savology. “Having employees who are financially stressed is proven to impact the bottom line, too.”
Employees aren’t the only ones in favor of EWA: More than nine out of 10 say offering earned wage access has helped them with retention, the ADP reported. Retail employers have already hopped aboard this train, with giants like Target, McDonald’s, and Walmart betting early access to pay will keep employees around for a while.
“Position your business as the employer of choice by offering the benefits [employees] prioritize,” the ADP report says. “A majority of employees want EWA. When offered the option, nearly eight in 10 will take advantage of EWA.”