Earned Wage Access: A Win-Win for Employees and Employers Alike

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In what comes as no surprise to anyone who has been to the grocery store recently, inflation ticked up again last month above analyst predictions with the Consumer Price Index (CPI) rising 0.4% over the previous month and 3.5% over the prior year. That comes on the heels of news that nearly half of Americans consider themselves “broke,” according to a MarketWatch guide.

The American worker is facing unprecedented challenges to make ends meet. The ability to pay bills on time and avoid dreaded late fees is becoming a seemingly insurmountable hurdle, especially for millions of American hourly workers. The debt trap is real for so many and sadly, inescapable. According to a recent quarterly report on household debt and credit from the Fed, total household debt grew by $212 billion, rising to $17.5 trillion in the fourth quarter of 2023.

So where can workers turn for help?

A recent study by Transamerica Institute cited in a recent issue of Harvard Business Review notes that 77% of workers view financial wellness programs as an important benefit yet only 28% of employers offer them. For employers that are continuously challenged in retaining their top talent, offering meaningful, relevant financial wellness benefits that can have an immediate positive impact, can be a game-changer.

A study from Willis Tower Watson shows that 78% of employees said they’re more likely to stay with an employer because of their benefits program. So with high inflation and a fluctuating economy, a benefit that can help workers pay bills on time can be a win-win for both employer and employee.

One such benefit that has proven to be beneficial to both employer and employee is earned wage access (EWA). Offered by America’s forward-thinking employers, earned EWA provides employees with the choice and control over their pay and increased flexibility to manage their finances. With EWA, employees can access their earned wages before a scheduled payday, allowing them to take care of bills, save, spend, and invest on their own schedule.

In fact, according to research from Arizent commissioned by DailyPay, nearly 7 in 10 users who previously paid late fees do this less often or stopped completely since they started using DailyPay. At the same time, 93% of employers say DailyPay, which comes at no cost to employers, provides a valuable addition to their suite of benefits. With DailyPay, employees have no-fee and lol-fee options to access their pay instantly or on the next business day.

Teleperformance, the leading global digital business services company serving many of the world’s best brands, saw a need for financial flexibility for their employees and financial literacy education. They also saw the value in leveraging EWA technology to get a leg up on the competition in delivering top talent.

Providing employees with access to their earned pay from day one, without having to wait for a scheduled payday, is empowering. For Teleperformance, the results were striking – having implemented DailyPay’s earned wage access solution in April 2021, over 69.8% of Teleperformance’s U.S.-based employees have enrolled in the financial wellness benefit, enabling pay transparency and flexibility.

The time is now to arm employees with the tools they need during uncertain economic times so they can avoid falling into the endless cycle of debt. One such tool can be as simple as leveraging innovations in payment technology to get money into employees’ hands when they need it most. Bills can be paid on time, debts can be settled, and your employees can avoid more expensive financial solutions to make ends meet.

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