Why Early Access to Salaries is Crucial to Achieving Employee Financial Well-Being
Employee satisfaction is inextricably linked to workplace productivity and long-term business performance. The financial well-being of Indian employees has been widely discussed, but there are hardly any studies on the subject. The majority of employees are still paid on a monthly basis, which leaves them financially unguarded. It is also difficult for them to meet their immediate needs. There is largely a requirement for innovation in how employees are compensated over the years.
Early access to wages is the need of the hour and a fundamental foundation of employee financial well-being. The intention is to bring them to a point where their obligations are met and where they can make choices. Living paycheck to paycheck exposes employees to financial risks such as payday loans and short-term credit facilities, creating a debt spiral. Employee motivation and retention drops dramatically due to poor financial health. The financial strains and emotional stress caused by a lack of funds can lead to hijacking, seeking opportunities, and a noticeable lack of work motivation. None of this bodes well for productivity.
Timing is everything
But what if an employee could get their compensation sooner? It would certainly relieve some of their financial stress. EWA, being a relatively new and unique concept for the Indian market, clearly differentiates itself from consumer loan, payday advance and payday loans. It is a fintech product that allows employees to access a portion of their “worked” but unpaid wages before payday without affecting the payroll process. One of the leading EWA players in the industry deploys multi-pronged go-to-market strategies with no hidden costs. It offers unique and hassle-free refund options that allows the user to skip the cumbersome EMI process and thus simplifies the whole process.
Employees are enthusiastic about the EWA concept. According to recent reports, more than 70% of respondents see EWA as a deciding factor in their next career change. EWA helps retain employees and attract new talent. It helps people better align their income and expenses while reducing their reliance on high interest credit plans. Unlike payday loans (advanced salary) or payday loans, EWA does not require the employee to borrow. EWA also provides clients with additional liquidity to manage unforeseen or urgent needs, as well as to enable investment planning and financial well-being. Earned Wage Access frees employees and businesses from the traditional payroll cycle.
A win-win innovation
EWA has the ability to increase employee morale and productivity. It creates an environment of trust in the workplace. Employees who believe they are in control of their finances are less likely to worry about their finances, are more motivated to come to work, and are significantly more productive.
In a global economy, we must look beyond industrial age conventions and assembly line methods that bear little relation to the way business – and life – is done today. We need to broaden the scope of financial well-being beyond insurance and social security benefits. It’s a hobby for modern companies to include access to earned wages as part of their employee value proposition. EWA is a revolutionary approach to improving payroll, a tremendous opportunity to be future-ready, and a versatile solution to promote employee retention and lifestyles in the post-pandemic era.
(The author is Mr. Akbar Khan, CEO of Rain and the opinions expressed in this article are his own)