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The two-week or monthly pay cycle is still the norm for most employers, but the 12% that offer employees earned wage access (EWA), according to the 2023–2024 HR Systems Survey by Sapient Insights Group can expect to see some positive results. And some 3% of respondents have forecast that they’ll use EWA in the next 24 to 36 months.
A nontraditional approach to pay using EWA can positively impact employees’ overall well-being, which can translate to greater productivity and retention rates for employers.
Indeed, 93% of employers that offer an EWA benefit believe it’s helping improve retention, ADP research shows. Some have even said it has improved retention by 63%, according to a survey by EWA provider DailyPay.
“People should have access to their pay as they earn it,” Darlene Miranda, VP of customer engagement and advocacy for DailyPay, told HR Brew. “Life happens between paydays.”
Zoom out. Valor Hospitality, an Atlanta-based hotel company, started offering employees an EWA benefit in 2023 in response to employees’ requests for advances on their pay.
“Employees would have some kind of financial difficulty, but that’s not something we did—offer early pay,” Balencia Thomas, regional director of HR for Valor Hospitality, told HR Brew. “We had other options, like borrowing from their 401(k), but that’s going to cost [employees] in the long run.”
In order to help lessen employees’ financial stress, Valor Hospitality decided to offer EWA through DailyPay. In early conversations with employers like Valor Hospitality, DailyPay’s Miranda said they would get “stumped” on how to offer employees greater financial wellness support. Enter, EWA.
“Your employees [want to] feel like they’re in control, so they can comfortably manage their bills and their expenses and handle unexpected financial emergencies and so forth,” Miranda said. “Pay flexibility drives financial wellness, because it puts people in control.”
Once its EWA benefit gains traction, Valor Hospitality estimates that it could see a 20% rise in employee retention. While it is too soon to tell how the benefit is performing from a retention standpoint, Thomas said she’s already seeing improved employee engagement thanks to EWA.
“We’re not seeing as many call outs because employees are realizing that in order to have access to the money, they’ll have to have earned it, so they need to be here at work,” she said. “They’re more engaged because having this program has eliminated a lot of that [financial] stress.”