How to Select an Early Wage Access Payment Partner
Employee retention is one of the main drivers of company profitability and credibility. As the job market becomes more competitive and new financial burdens are placed on employers and employees, attracting and keeping a committed workforce is more important than ever.
Fortunately, employers can now help to support employees through life’s expected and unexpected moments by including on-demand pay as part of their organization’s benefits package. This modern way to pay employees is more attuned to how people live, work and manage expenses, and it gives employees access to the wages they have earned in real-time rather than forcing them to wait until payday.
Four On-Demand Pay and Operational Considerations
It isn’t a secret that many hourly and salaried employees are one unexpected expense away from falling into financial hardship. While this widespread problem is understood by many, a viable solution to keeping avoidable financial hardships at bay has yet to be universally adopted.
Any change to operations can be daunting. From a new payroll provider to new software systems, a break in “how things always have been done” is sometimes enough to keep any change from happening at all.
This is why employers and their organizational partners must carefully determine how and when to make changes to something as critical as wage delivery. And much of the success of the “how and when” lies in the ability of the on-demand pay provider.
To help those looking to integrate an earned wage access solution into their organization, a 2019 study conducted by the research firm Gartner, Inc. outlined the following four attributes to look for in an ideal payment partner:
- They must be able to offer a customized earned wage access solution based on the particular workforce’s needs.
- This includes working with a payment partner to conduct staff surveys and to identify common emergencies faced by a workforce. With this data, human resources and operational leaders can determine how an instant pay solution will improve the employee value proposition as well as help with recruiting efforts.
- They should be payment-focused and equipped with a mobile solution.
- As a society, we are all accustomed to making transactions with the touch of a button. In order to make the process more convenient, payment providers should work to enable earned wage access as part of a native payroll app, compatible with both iOS and Android devices that make it easy for employees to quickly access their wages.
- They should offer programs that will be beneficial to employees.
- Vendors in this financial wellness space typically offer employees a mobile solution that delivers user-friendly education, coaching, and support to help employees develop new habits and practices. These include starting a savings plan, creating and following through on a budgeting process, and thinking concretely about retirement needs.
- They should be able to reconcile Workforce Management, Payroll and Accounting Solutions
- Depending on the provider, deployment may require integrating workforce management, payroll, and accounting solutions. It may also mandate a reconciliation for any earned wage access transactions to calculate and disburse the net pay remainder due to the employee.
Employee and Employer Need: What to Look for
It is important for application leaders to assess deploying an earned wage access solution that aligns with broader programs to improve employee retention, engagement, and financial wellness. Providing easy access to already-earned wages enhances the employee experience, gives them more power to manage their financial affairs, and reduces their stress in dealing with unexpected economic issues.
In looking quickly at key operational benefits for the employer and the employee, the following outlines how easy integration and deployment should work:
For the Employee
- Employee enrolls in a simple, one-time activation
- Easy-to-use dashboard shows earned wages available to the employee
- A simple, one-touch request gives employee easy access to accrued pay on-demand
- The employee can elect to have funds disbursed to their payroll card or deposited directly into their bank account.
- Net wages are reconciled and issued to the employee at the end of the pay period
- The employee dashboard includes value-added offerings like budgeting and financial wellness tools.
How Earned Wage Access Works for An Employer
- The employer dashboard enables the employer to set withdrawal limits, establish additional risk controls, and generate reports
- Payroll funds are held at an FDIC-insured partner bank
- Transfers are made to employee accounts from pre-funded employer reserve accounts
The AnyDay Solution
At AnyDay we fully understand this current need. With this knowledge in mind, we created an end-to-end, on-demand wage pay solution that brings instant pay to an estimated 1.5 million hourly workers in North America and Australia. It is the only vertically integrated service that allows for easy onboarding with little to no disruption to operations. Our solution is structured to give employers the choice of funding payments directly or through a low-cost working capital facility.