How EWA Platforms Can Help Employees Make Good Financial Decisions

Building a productive working environment

Prior to Covid-19, one of the top financial concerns in the U.S. workforce was related to paying back student loan debt – a common financial pain point for the last few decades.

Since the pandemic, however, the same workforce - those young and old - have been forced to refocus much of their long-term financial concerns to increased pressure over trying to make ends meet. In fact, we are hearing from human resource professionals who report many employees are being forced to draw against their 401ks to alleviate financial hardships.

In an economy that looks less and less stable, it has become clear that U.S. employees – and workforces everywhere for that matter – need assistance when it comes to budgeting for life’s unexpected costs.

That’s why it’s my belief, and that of the AnyDay team, that employers, HR professionals, professional employer organizations, and workforce management companies have an opportunity to support employees with financial wellness tools. And in doing so, can support their own business objectives with increased retention and more aggressive recruitment efforts.

We see this in the form of a comprehensive earned wage access solution. By adopting an earned wage access solution, employers can guide their employees towards proper financial management - in both good times and bad. And ultimately, create a path that benefits them both.

Nearly 80% of the U.S. population currently lives paycheck-to-paycheck. This staggering number means that we have a major issue with spending management, as a large segment of these employees is paid more than a decent living wage. Let’s break it down:
 

Perhaps the most staggering figure, however, is that only 32% of employees actually have a budget at all. This is where Earned Wage Access platforms come into play. They create a structure for employers to help combat the mismanagement of spending by enabling employees to access their accrued wages before payday arrives. This can alleviate huge amounts of stress when it comes to bill payments and other necessary costs, as it allows an employee to learn more about their spending and devise strategies to manage their budget more effectively.

In addition to greater flexibility when it comes to wage disbursement, many earned wage access providers also frequently include a budgeting and savings function and advice section for those using the platform.

Access to these tools can help with cash-flow management and create a structure for employees to create a strong financial foundation to build upon. And the indirect benefits to the employer here are enormous.

The employer ultimately can employ a tool that is a key part of their benefits package, allowing them to work with the employee and guide them towards proper financial management. And with this well-thought-out financial decision-making comes less stress. And with less stress comes productivity. In short, employees who make good financial decisions, have a budget, and can save when possible are typically happy and hardworking members of an organization. Unfortunately, 53% of U.S. employees claim that financial stress distracts them from their day-to-day tasks. Having the option to use an earned wage access platform may be the difference between helping a hardworking, well-intentioned employee alleviate stress and succeed in their lives and careers, or maintaining an environment where professional and personal growth is stagnant.

In closing, it’s clear that earned wage access solutions offer an effective method when it comes to guiding employees towards better financial management. The tool itself offers a new way to be paid that better meets the demands of today’s modern working world. It also provides an increasingly important platform where employees can access pay when they need it most, learn about their spending, and make informed financial decisions. And by supporting employees in their financial lives, employers are investing in their own well-being.