Employers across the United States are working in earnest to rebuild workforces as the demand for services increases across a wide variety of industries. A record 9.3 million U.S. job openings were reported by the Labor Department in June 2021 and many of these open positions are in industries that traditionally employ hourly workers.
Despite the positive influence the job market is having on our nation’s economy, many of these positions are going unfilled, as hourly-rate employers face tough hiring dynamics they’ve never encountered before. These challenges are driving many employers to offer highly competitive compensation and benefits packages that have not likely been seen in the history of their industries.
Understandably, wage rates have always been a significant factor for employers trying to attract hourly workers. However, in today’s employment marketplace, how workers get paid is just as important, or even more so, when it comes to employment preferences and selection.
According to a recent Netspend survey of nearly 2,000 U.S. workers, 77% said they would appreciate having faster access to their earned wages. Not surprisingly, 37% even said they would be willing to change employers to get this benefit.
Why are workers demanding faster access to earned wages?
It’s no secret. The pandemic has strained nearly all types of businesses and required many of them to reevaluate the way payments are accepted. Meanwhile, their staff members were managing other types of financial pressures during the heart of the pandemic’s first wave. Netspend’s research revealed hard facts about the financial stability of hourly workers, reporting that 57% of these workers felt insecure about their financial situation, and the number continues to grow.
This sentiment, of course, is impacting employers in many ways. For example, Netspend’s research also brought to light a direct correlation between worker financial stresses and employer retention rates. Almost a third (31%) of the financially insecure workers in this survey reported they’d been compelled to quit a job due to financial pressures.
Only 58% of this same group said they would continue working in their job for the next year; a number that contrasts starkly with the 87% of financially stable employees who plan to stay in their current job.
Of course, added pressures such as payment delays or unexpected expenses only serve to intensify the stresses these workers are feeling. And, with simple goals of trying to keep up with bills and maintain psychological balance during such uncertain times, it’s understandable that hourly workers value faster access to earned wages more than ever.
This provides an opportunity for employers of hourly wage earners to re-think not only what competitive hourly rates they offer prospective employees, but perhaps more importantly, how they will pay them, including on-demand access to the funds they have earned in the current pay period.
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 these unbanked 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.
Continually raising wages to unprecedented levels is unlikely to be sustainable in the long term. Employers who want to gain an edge over their competition in this unusually saturated job market should be offering prospective workers meaningful benefits that support a path to financial stability and health. Especially, those employers who rely on workers that get paid by the hour can benefit significantly by gaining easier and faster access to earned wages.
To see more data on what hourly workers want and how financial health impacts recruiting, hiring and retention, download the research e-book for all industries.
Learn how Netspend Earned Wage Access works.
1 CNBC, “Job openings set record of 9.3 million as labor market booms”, June 2021
2 Netspend, “Power of the Pivot: Embracing Three Major Pandemic-Driven Trends”, April 2021 Page 4
3 Netspend, “Power of the Pivot: Embracing Three Major Pandemic-Driven Trends”, April 2021 Page 4
4 Netspend, “Power of the Pivot: Embracing Three Major Pandemic-Driven Trends”, April 2021 Page 2
5 Netspend, “The Restaurant Recovery: Three Pandemic Trends-Turned-Opportunities”, April 2021 Page 4
6 Netspend, “The Restaurant Recovery: Three Pandemic Trends-Turned-Opportunities,” April 2021, April 2021 Page 4