Offering competitive employee salaries was a proven way to gain candidate interest in the past. Now, employers must offer comprehensive and customisable benefits to spark interest among potential candidates. Wages are the monthly salary payment credited to employee accounts on payday. With changing financial needs, employees need cash support throughout the month, not just at the beginning. Earned wage access (EWA) is a modern fintech product that provides access to part of accrued and unpaid salary for employees before payday.
Employees are looking beyond salary when choosing their employer. Millennials want a better quality of life, and they expect their employers to offer financial flexibility. EWA allows employees to tap into their earned wages to pay their bills on time. With immediately available cash support, workers don't have to worry about overdraft fees, late fees, or payday loans. Due to the increasing popularity of EWA, employees now offer EWA access benefits to provide better financial security for employees. More than 82% of employers are willing to provide EWA benefits for employees, as per an ADP study.
The concept of EWA is still new in India. Indian employees are used to getting paid at the beginning of a month. However, according to Earned wage access survey, young professionals are looking at flexible pay options because 80% of them exhaust their salary before the month's end. It causes undue financial stress because employees are worried about unexpected expenses before payday.
In the same survey, 77% of Indian employees feel positive about EWA. They are more likely to use the benefit if they can access accrued wages before the payday. Employers, too, are willing to offer this benefit to empower employees and improve their financial wellbeing.
The primary purpose of EWA is to improve employees' financial wellness with an instant source of liquidity that they can use to manage their routine and unexpected expenses. When employers offer EPA, employees need not seek microcredit lenders to get loans. Some of the EWA benefits for employers are:
Financial worries are a major cause of stress for employees, and 82% felt relieved after getting EWA benefits. The EWA solution is usually designed to access a percentage of earned wages for a minimal fee. This enables employees to improve cash flow management on their salary instead of paying high interest for a loan. On-demand pay also allows employees to stretch and extend their budget when needed. Some of the EWA benefits for employees are:
One of the major challenges that employers face with EWA benefits is the ability to provide access to accurately calculated employee wages. Even though this benefit doesn't cost anything for employers, the administrative burden of disrupting payroll processing is one of the major pain points. Tartan now provides a futuristic EWA platform called Earned wage access Infrastructure Stack that provides robust insights and data to offer EWA benefits at scale.
Companies can leverage this stack to create a financial EWA product that connects instantly with over 50 payroll providers. This stack is also integrated with more than 10 work platforms, thus automating EWA benefits without disrupting the existing payroll system.
Tartan EWA Infrastructure stack supports all types of employees and accurately calculates wages based on clock-in and clock-out times. Companies can quickly implement EWA solutions without huge money and time investment.
Employees offering EWA benefits to their employees have a competitive advantage as 75% consider it as an important benefit to consider to accept a job offer. With layoffs across industries, employers must adapt financial wellbeing programs that empower employees. The EWA benefit doesn't cost employers anything extra; they simply extend access to earned wages. However, it will help employees during their time of need. Instant access to funds and quick approval without huge interest rates is beneficial for employees with a sudden need for cash loans.
Tartan is a full-stack API company with payroll connectivity platforms for real-time employee and income verification. The new EWA Infrastructure stack is a platform to customise financial product APIs to support EWAbenefits for any organisation, regardless of size. By automating payroll connections and integrating with existing systems, Tartan enables employers to provide a custom EWA solution for their employees quickly.
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