Putting Earned Wage Access to Work for Recruiters
Learn how to turn a flexible payroll option into a recruiting magnet.
In a competitive labor market, employees have more leverage to make demands and seek better opportunities. For employers, these dynamics introduce hiring and retention challenges that can impact the ability to stay competitive and profitable. To address that challenge, employers are increasingly turning to new incentives to attract and retain talent that go beyond traditional salary and benefits offerings, to include more flexible ways to pay employees that can contribute to their financial wellness. Rather than looking at options like earned wage access (EWA) as a payroll option, HR professionals are being strategic by making it integral to their recruitment strategy.
How EWA works
EWA is a voluntary offering that allows employees who opt-in to access their earned pay prior to payday. Employees who choose to opt in can tap into their earned pay so they can pay bills on time and meet unexpected expenses--without having to pay late fees, overdraft fees, or resort to predatory payday loans. As a complement to a broader financial wellness program, employers can leverage an EWA program to help employees head down a path to feel more in control of their finances.
How EWA contributes to hiring and retention
When it comes to hiring and retaining employees, research shows that financially stressed workers will prioritize prospective employers that demonstrate concern and support for their financial wellness. A recent PwC survey found that 76% of financially stressed employees are likely to look elsewhere for an employer who cares about their financial wellness.
With more employees than ever living paycheck-to-paycheck, EWA helps employees overcome cash flow issues without incurring additional debt in the form of interest payments.
"We're doing really well," says Najm Ali, vice president of payroll, HRIS, and compliance for National Express, a transportation company, that has many hourly workers they employ and market EWA to. "Our drivers are signing up at an overwhelming rate. What we have seen is a majority of our biweekly employees signing up, because they want access to their wages faster. Some of them are using it as a weekly payday, so I'm proud of what we've done so far."
A recent ADP survey of employers and employees said broad interest in EWA from workers in every age group at every education level:
- 75% of workers across all age groups say it's important for their employer to offer EWA
- 82% of employers that don't offer EWA are interested in offering it
- 59% of millennials would give priority to a job with an employer that offers EW
- 75% of employees say that the availability of EWA would, in fact, influence their acceptance of a job offer
EWA real-world results
According to a recent PwC survey, Financially stressed employees are twice as likely to search for a new employer.
When employers offer EWA to their employees, real-world results bear out its benefits to both recruitment and retention. A recent ADP Webinar shows how employers are leveraging EWA to boost recruiting and retention and their results:
- Nearly double the number of applications
- An 87% increase in employee satisfaction1
- An average of 45% reduced turnover1
- Open positions were filled 52% faster1
National Express experienced similar results, and they've now emphasized EWA as an essential part of their marketing strategy:
"With EWA, now we see drivers staying longer, and we are attracting more drivers," said Ali." We also promote it on our buses with banners that say, "Come over to National Express. Start today, get paid tomorrow." That's been how we've been marketing it, and it's been effective. We have seen an uptick in the retention piece, and also in recruitment."
Implementing EWA best practices
If your organization has set meaningful recruitment and employee retention goals but has failed to achieve them, implementing a strategic EWA program can help.
Here are three important things to consider when adopting an EWA solution:
- Your EWA provider should be able to easily integrate into your payroll systems and processes already in place to ensure efficiency and an optimal user experience.
- For employees, simple enrollment with fast access to pay and clear visibility into pay balances helps promote flexibility and transparency.
- To leverage EWA strategically, the offering should be effectively communicated as part of the employer's recruitment and employee financial wellness programs.
With an EWA program in place that is easy to administer by your existing payroll team, easy to use by your employees and effectively communicated by your HR team, your business can help both candidates and employees embrace the underlying values reflected by EWA and your financial wellness program.
Learn more
To learn more about EWA, launch our on-demand webinar anytime: "Offering Earned Wage Access: Strategic & Compliance Considerations."
1 DailyPay Internal EWA Data
