HR Strategy

Money (That’s What I Want): The Growing Popularity of Earned Wage Access

November 24, 2022

Many people are still adapting to or recovering from all the changes that have occurred over the past few years. For employers, it’s become clear that employee wellness is key to a successful workplace. But one aspect of wellness that often isn’t talked about is financial wellness.

According to the FP Canada 2022 Financial Stress Index, 38 percent of Canadians say money is their biggest concern. This isn’t surprising when you consider 44 percent of Canadians live paycheque to paycheque, according to a Canadian Payroll Association (CPA) study. Needing money immediately but knowing the next payday is far away can create a lot of stress and mental insecurity.

One of the ways workplaces are addressing this is through earned wage access, also referred to as on-demand pay. Earned wage access is becoming an increasingly popular option in workplaces, with benefits to both employees and employers.

Let’s take a closer look at what earned wage access is and why so many organizations are adopting this new way of pay.

What is earned wage access?

Earned wage access (EWA) offers an option for workers to access money sooner than the usual payroll schedule. Rather than waiting for their next payday, employees can access their income as they earn it.

For example, if an employee works an eight-hour shift on Monday, they can access the money they just earned the following day or even as soon as their shift ends.

Why is earned wage access growing in popularity?

For employees, EWA is a great perk because it gives them more control over when they can access money, providing greater financial flexibility. This means they can better align their pay dates with their personal financial obligations.

How can earned wage access benefit your organization?

1. Supports employee wellbeing

Overdue bills or unexpected expenses (like home or auto repairs) can lead to increased stress and anxiety. But many people don’t want or know how to talk about money. In the same CPA study mentioned above, 47 percent of respondents said they’re uncomfortable talking about debt and other financial issues with a colleague or peer.

EWA empowers employees to take greater control of their finances while preserving their privacy and dignity. It also allows them to remain focussed on their job and worry less about financial stressors.

Reducing financial stress and promoting mental wellness in the workplace requires ongoing efforts. Giving employees the option of on-demand pay shows them that you’re looking out for their wellbeing. There are also other ways you can continue to support your employees. For example, providing financial wellness training and other wellness training programs can help employees get a better handle on their finances and overall wellness.

2. Boosts workplace productivity

The mental stress and anxiety of financial difficulties can take a big toll on productivity. In the CPA study, 46 percent of workers admitted that financial stress affects their workplace performance. Some employees have even turned to taking on multiple jobs to make ends meet. Reducing financial burdens can help employees improve their focus and productivity at work.

It’s also important to understand that financial struggles do not affect everyone equally. A compensation and benefits strategy that is developed with diversity, equity, inclusion, and belonging in mind can help address inequities so that all employees can do their best work.

3. Improves employee loyalty and retention

EWA is quickly becoming a popular recruitment and retention tool for companies in today’s competitive labour market. Employees who feel more secure about their finances will be less likely to seek other opportunities, particularly if they also feel cared for by their organization. Maintaining a positive work environment that focusses on financial and mental wellness can also make your organization stand out to job seekers.

Is EWA right for your workplace?

Earned wage access can be a useful tool for improving the welfare, productivity, and retention of employees. But it isn’t something to implement without careful research and planning. To get started, download our FREE Guide to Earned Wage Access! This comprehensive guide, compiled by our HR experts, outlines what to consider if you want to implement earned wage access and how EWA can benefit everyone in the long run.

Download now!