The chaos of “The Great Resignation” shows no signs of abating, as more than 4 million workers voluntarily left their jobs in February 2022 alone. And, research shows as many as two-thirds of them didn’t have another job lined up. Evidence indicates many are putting in their two weeks’ notice in search of more money, flexible working hours, or work-life balance.
The business impacts of this shifting workforce are significant, adding up to near-constant turnover and staffing shortages. In fact, that’s why 79% of workers indicated they would be willing to switch to an employer who offers earned wage access (EWA)1. In industries with higher turnover, such as restaurants and hospitality, responding to this desire for control could be especially important for recruiting and retention.
But there are tools that many businesses are not fully utilizing. Financial health benefits like earned wage access, direct deposit, financial education and budgeting tools can create a win-win: a more financially stable workforce, and payoffs for recruiting and retention. According to a recent Netspend survey of nearly 2,000 U.S. workers, 77% said they would appreciate having faster access to their earned wages2.
The financial well-being of employees is often dependent on how they can manage their personal finances. Better control over their lives, including how and when they are paid, is a trend that will continue to play out in workforce dynamics. Earned wage access is part of the equation. But this payroll benefit shouldn’t be offered alone; it should be part of a larger financial wellness package that can help employees take more control over their financial lives.
In fact, the demand for wage solutions that balance the real-world needs of today’s workforce is growing. Industry data indicates 55.8 million earned wage access payments totaling $9.5 billion were facilitated in 2020. Instead of employees having to consider utilizing options like a credit card or a loan to cover short-term payment needs, earned wage access solutions can provide employees another option to cover unexpected expenses between paydays.
Employers can accelerate access to earned wages and provide workers with multiple ways to tap into their funds. By replacing cash and paper checks with digitized payroll vehicles, such as prepaid or payroll cards, employers can help workers and others gain access to their income whenever and wherever they need it. Plus, they won’t have the additional time-consuming burden and expense of check cashing fees.
Adopting earned wage access provides benefits to both an employer and employees. It can give employees more control over how and when they get paid — and many earned wage access solutions get employers up and running quickly, enabling them to gain an edge in this competitive hiring market.
Whatever your size or industry, we make payments simpler. We provide modern technology, fraud management, and customer service, so you don’t have to. You’ll benefit from the full Netspend network of integrated partners. Banks. Card networks. And one of the largest money movement, cash-in and retail distribution networks.
About the Author: Andrew Garner is Senior Vice President and General Manager of Business Partnerships at Netspend, and is responsible for the company’s innovative suite of payment solutions for employers including earned wage access, paycard, digital tips, disbursement and incentive product sets including all sales and business development efforts, implementation, account management, operations and strategy. Garner is a graduate of the University of Kentucky with a Bachelor of Business Administration in Finance.
1 Visa Earned Wage Access Preferences Study, 2019, Page 11 https://usa.visa.com/dam/VCOM/global/run-your-business/documents/visa-earned-wage-access-insights-report.pdf
2 Netspend, “Power of the Pivot: Embracing Three Major Pandemic-Driven Trends”, April 2021, Page 4 https://www2.e4.netspend.com/l/533722/2021-04-09/h4ygm4?li_fat_id=1aac4863-dc55-4bf9-901d-e9241510e7f8