Over the past few years our world has turned upside down, affecting all industries, and Human Resources is no exception. Health insurance, a 401K and a little extra time off are no longer sufficient benefits to attract and retain talent. As trends evolve and Gen Z continues to join the workforce, employees are demanding enhanced benefits like work flexibility, generous compensation, additional paid time-off and wellness resources.
Protecting Employee Health
Ultimately, protecting employees’ mental and physical health is productive for your company’s bottom line because healthier, happier employees produce better results. Taking care of employees’ health often starts with setting them up for financial success. In an Immediate market report conducted in 2020, we found that employers are significantly overestimating their employees’ financial wellness, and more than 80% of employees said they’re facing financial struggles that negatively impact their mental health.
By diverting employees’ focus, mental health negatively impacts work performance, leading to potential safety concerns and impacting your company’s bottom line. In 2021 The World Health Organization estimated mental health disorders cost the global economy $1 trillion due to unproductivity. If financial stress is adding to employees’ mental health, why not offer them earned wage access (EWA) to help mitigate added stress? EWA gives employees on-demand access to their wages that have been earned but not yet paid. Instead of turning to predatory payday lenders or credit cards with extremely high APRs, EWA provides employees with a responsible financial resource when unexpected expenses arise. Life doesn’t wait two weeks.
Boosting Recruitment and Retention
EWA can also be a powerful talent acquisition and retention tool to make your company stand out among competitors. A recent study by The Harris Poll found that 80% of workers would prefer to have their pay automatically deposited in their bank accounts as they earn it. In our market study, we also found that 80% of employees would prioritize an employer that offered an EWA solution when seeking new employment, indicating its power in recruitment. As we’ve seen, labor shortages nationwide are continuing to affect all industries. We’re facing a “Great Resignation,” so it’s imperative that employers can not only react to employees’ evolving needs, but also that employers go the extra mile and offer benefits like EWA, enabling them to recruit and retain top talent.
EWA is a newer benefit but quickly becoming a necessary benefit for some, and I fully expect it will be a standard practice in the next few years. Allowing employees to access the wages they’ve earned will benefit their mental health, improve job performance and assist you in recruiting and retaining talent, separating your company from its competitors.
Matt Pierce is Founder & CEO of Immediate, a fintech startup in Birmingham helping businesses to recruit, retain and engage employees with on-demand pay solutions. Immediate is committed to improving the financial well-being of one million American workers over the next three years by providing on-demand access to earned wages and financial wellness resources.