Best Practices for Driving Earned Wage Access Adoption
September 14, 2023
by Matt Cromar
In the rapidly evolving landscape of workforce management (WFM), businesses are perpetually seeking ways to balance operational efficiency and employee satisfaction. An emerging solution is InstantPay, commonly referred to as Earned Wage Access (EWA). While some companies are still apprehensive about adopting EWA, the undeniable fact remains, EWA is revolutionizing how companies and employees interact with their earned wages. It’s important first to understand the importance of EWA, then the advantages it brings for companies, and finally, some best practices to help drive its adoption.
Why Earned Wage Access is a Game Changer for Employees
Financial uncertainties and unexpected expenses can strike anytime. These types of expenses can have various adverse effects on worker stress and productivity and can often lead to termination. According to a recent study published by EWA provider Wagestream, in the last 10 years an “estimated 20 million American workers took up the option of being paid more frequently”. Workers accessed their wages to deal with financial stress, eliminate bank overdraft fees, and avoid expensive payday loans. A more flexible pay cycle with more inclusion of financial products that many workers have not traditionally had access to can positively impact their overall financial health and work life.
The Traditional payroll cycles often don’t align with these unanticipated financial needs. Here’s where EWA steps in:
- Immediate Financial Relief: EWA offers employees the flexibility to address unexpected financial emergencies without having to wait for their regular paycheck. This can be especially beneficial for workers who live paycheck to paycheck.
- Reduced Reliance on Predatory Lending: One of the main benefits of EWA is that it can serve as an alternative to payday loans, which often come with exorbitant interest rates and fees. Payday loans can trap individuals in cycles of debt that can be difficult to escape.
- Improved Financial Well-being and Job Satisfaction: Offering EWA can be seen as an employer’s commitment to the financial well-being of its employees. When workers are less stressed about their personal financial situations, they may be more focused, productive, and satisfied in their roles.
Benefits to Companies Offering EWA
If the perks for employees weren’t convincing enough, there are a variety of positive benefits through offering a comprehensive financial well-being program such as Legion InstantPay. In a recent webcast, Aldo Group Senior Operations Manager François Paquin discussed how Aldo Group offered EWA through Legion and saw results that include:
- Attracting Talent: In a competitive job market, EWA can be a unique selling point, attracting a broader pool of candidates.
- Reduced Absenteeism: Financial woes are a significant cause of absenteeism. By providing a solution, companies can ensure a more consistent workforce.
- Increased Productivity: A financially secure employee is more motivated and dedicated, resulting in better output and workplace harmony.
Aldo Group has seen early results proving how powerful EWA embedded in workforce management software can be. Late clock-ins for employees who activated Legion InstantPay were reduced by 66% during the first 6 months of the EWA program. In addition, newly hired employees are seeking employers who provide this benefit, with an adoption rate of 2x that of existing employees.
Best Practices for High EWA Adoption Among Employees
Implementing EWA is only the beginning, and driving its adoption requires strategic planning. Legion provides a tailored approach for our customers directly within our award-winning WFM app that employees are already familiar with to manage their schedule, availability, and work preferences. Employers should consider the following when looking to roll out EWA to their employees:
- Education and Awareness: Ensure employees understand the benefits of EWA. Regular workshops, information sessions, and easy-to-access resources can clarify doubts and break down misconceptions.
- Simplicity in Access: Access to earned wages should be straightforward and user-friendly. Any complications can deter employees from utilizing this feature.
- Transparent Fees: If any charges are associated with accessing wages instantly, be upfront about it. Hidden costs can lead to mistrust and lower adoption rates.
- Feedback Mechanism: Create channels for employees to share their experiences and provide feedback. It will help refine the EWA process and align it more with employee needs.
Legion makes it easy for customers to roll out an EWA program that takes advantage of the high engagement they already have from employees using the Legion WFM app. The same data and interfaces needed for EWA are already delivered with Legion WFM, and employee onboarding for InstantPay is embedded directly in Legion. Legion is completely transparent with fees, offering both a free and low fee option for employees.
How Legion Elevates EWA Adoption
Legion, with its innovative approach to WFM, is uniquely positioned to drive EWA adoption. Our embedded solution allows employees to easily opt-in to the InstantPay program, which can help drive benefits for the employee and employer alike. Some key operational outcomes employers can expect include:
- High Employee Engagement: Through its AI-driven app, Legion ensures employees remain informed and engaged. An engaged user is more likely to explore and utilize features like EWA.
- Improved Clock Hygiene with Timesheet Linkage: By linking EWA to timesheets, Legion makes the process seamless and promotes clock hygiene. It’s a subtle nudge, reminding employees about clocking in and out correctly.
- Filling Open Shift Offers: Knowing they can be paid immediately after clocking out is a significant incentive for employees to take up open shift offers, ensuring that demand is met without delay.
In conclusion, as we advance into an era of more flexible pay options, waiting weeks to access earned wages seems archaic. EWA is the future and mutually beneficial for both employees and employers. For businesses striving for a seamless transition to this model, solutions like Legion are paving the way, ensuring that the balance between operational efficiency and employee centricity is maintained. HR and Operations professionals, it’s time to embrace this change and lead your company into the future of workforce management. Contact us for a demo of our InstantPay solution.