On-demand pay, also known as Earned Wage Access, has been in existence for a number of years, but with increases in cost of living, real time payment methods are becoming more prominent in the media. Workers and employers are noticing the benefits and begin to ask the question, what is it and can it help my business and its’ workforce?
On-demand pay is quickly aligning itself as one of many workplace expectations from the younger generations. Almost 60% of millennials would give priority to a job offer with an employer that offers Earned Wage Access.
What is on-demand pay?
On-demand pay is a payment method that has been developed to give employees the flexibility to be paid as they earn. Normally, employees have to wait till payday. That could be every two weeks or at the end of the month. The money accrues, but the employee can’t access it.
In comes on-demand pay to the rescue! The employee can access their earned pay at the end of the day and use their money as they earn it.
On-demand pay is a method of paying employees’ wages as they earn them. In a time where the cost-of-living crisis is bigger than ever, this ability couldn’t be more relevant and necessary. On-demand pay is one of many ways to improve the wellbeing of employees.
On-demand pay would allow employees to take control over their finances. No more desperate attempts to scrimp and save and live paycheck to paycheck. This can reduce the likelihood of falling into debt and improve financial wellbeing. Getting paid as they earn would also help employees to budget for their bills and prioritise their needs.
Benefits to the Employer
When thinking about on-demand payments, the obvious benefits are for the employees. However, there are a lot of benefits for the employer as well.
There is a positive return on investment for employers who use Earned Wage Access from Income Group – calculate your cost saving here.
On-demand payments will also attract more applicants to advertised job roles as it will be a very enticing perk.
As well as grabbing attention, employers would also have a better chance at retaining the best employees. With perks like this on offer, it gives a reason for new and current employees to stay and show loyalty to the company.
It also has the potential to reduce stress and boost morale amongst employees. To not be worrying about surviving payday to payday would lift a weight off the workforce and build a happier, more productive team.
David Baga, the CEO of Even has said, ‘60% of employers report that financial stress affects their employees’ ability to focus and 65% of people think employers should do more to address the financial insecurity’. Just think how your workforce will improve with the flexibility and calm that on-demand payments will bring.
Why do we need it?
We live in a world where on-demand is now the norm. With things like Netflix, Amazon Prime, takeaway food and supermarket shopping where your food can arrive same day, we have come to expect things in an instant.
With everything at our fingertips, we have become complacent and want goods and services to arrive as soon as we decide we want them. Outdated pay cycles are now falling into that category.
Employees are starting to ask the question of whether it’s possible for them to get their pay sooner or even the same day as the work was done.