The COVID-19 pandemic has led to an unprecedented economic downturn, with many businesses struggling to stay afloat. During times of financial hardship, it’s essential for companies to support their employees’ financial wellness. One solution that has gained popularity in recent years is earned wage access (EWA).
EWA allows employees to access a portion of their earned wages before payday, providing them with more control over their finances and helping to reduce financial stress. In this blog post, we’ll explore five ways that EWA can benefit businesses during a recession.
1. Cash flow Management
During a recession, many employees may be struggling to make ends meet. In fact, a recent survey found that 78% of workers are living paycheck to paycheck. For these employees, unexpected expenses or emergencies can be incredibly challenging to manage.
By offering EWA as a benefit, businesses can provide employees with more control over their cash flow. This can help employees avoid expensive overdraft fees or payday loans, which can further exacerbate financial stress.
2. Reduced Financial Stress
Financial stress can have a negative impact on employees’ physical and mental health, as well as their job performance. In fact, a recent study found that financial stress costs employers an average of $5,000 per employee per year in lost productivity.
By offering EWA as a benefit, employers can help alleviate some of this stress and support their employees’ overall well-being. Employees who feel financially secure and supported are more likely to stay with their employer long-term, which can help improve retention rates and reduce the costs associated with high turnover.
3. Improved Employee Retention
Employee retention is a key concern for businesses, especially during a recession. In fact, a recent survey found that 69% of employers are concerned about retaining their top talent during the pandemic.
Offering EWA as a benefit can help improve retention rates by supporting employees’ financial wellness. Employees who feel financially secure and supported are more likely to stay with their employer long-term, which can help businesses weather economic uncertainty.
4. Increased Productivity
Financial stress can also impact employees’ productivity and focus at work. In fact, a recent study found that employees who are financially stressed are 4 times more likely to report being distracted at work.
By offering EWA as a benefit, employers can help their employees stay focused and motivated, which can lead to increased productivity and better business outcomes. In addition, employees who are less financially stressed may be less likely to take time off work or call in sick, which can further improve productivity.
5. Competitive Advantage
Offering EWA as a benefit can also help businesses stand out in a competitive job market, especially during times of economic uncertainty. In fact, a recent survey found that 79% of employees would prefer to work for a company that cares about their financial wellness.
By offering EWA as a benefit, businesses can attract and retain top talent, which is essential for companies looking to thrive during a recession. In addition, offering EWA can help businesses differentiate themselves from their competitors and establish a reputation as an employer that values their employees’ financial well-being.
In conclusion, offering EWA as a benefit can provide numerous benefits for businesses during a recession. By supporting employees’ financial wellness, businesses can improve retention rates, increase productivity, and establish a competitive advantage. As the economic uncertainty continues, businesses should consider offering EWA as a way to support their employees and ensure their long-term success.
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