How earned wage access technology can help businesses increase employee retention

A business is only as strong as its team. No matter what the industry, the people within a company are the ones who really shape the success, or failure, of that organisation. The Covid-19 pandemic accelerated many workforce shifts that were already gaining traction, such as the desire to work more flexibly in terms of location and time. While many companies have taken stock of their office allocation, ability for hybrid working practices and policies that offer employees more flexible working hours, not all companies are able or willing to continue with flexible working.

Providing employee benefits
Earned wage access is a key benefit to address workforce requests for a culture of flexibility and enhanced benefits. Earned wage access allows an employee to have access to the salary that they’ve already accrued in any given month. It empowers employees with the option to be paid earlier or more frequently than traditional pay cycles, enabling them with flexibility to manage their finances. But why should an organisation even care about having a motivated and happy team? A study by Hays found that on average a company with a highly motivated team can increase its productivity by more than 40 per cent.

A survey by the firm Glassdoor, found that 87 per cent of employees want their employer to help and support them with their personal commitments. If an employee is struggling financially, simplified ways to help them better manage their cash flow through early wage access, can mean the difference between a stressed and distracted employee, and one who is highly appreciative and motivated to work for the business. If a business is looking for an employee who can adapt to adverse situations and manage stress better in the workplace, then the least they can do is help reduce financial stress in their personal lives.

Findings from PwC highlighted that more than half of employees are stressed, with six in 10 blaming financial matters for their worries. Similar studies have reported that more than a third of employees have let these money troubles impact their job productivity. FlexxPay compiled research highlights that a typical business with 1,000 employees wastes over $300,000 annually due to such productivity losses and low retention of dissatisfied employees.

This dissatisfaction is leading to employee churn across the region, with more people than ever before thinking of switching roles. An H1 2022 survey by recruitment consultancy Robert Half found 65 per cent of employees are looking for new roles, while 78 percent believe their business will have a hard time replacing them. Employee retention is vitally important for business stability and productivity, so providing beneficial options like early wage access can help.

In line with the improvements in motivation and morale that early wage access can provide, employers report that flexible salary on demand can also help decrease absenteeism by up to 20 percent. Equally important for businesses, salary demand requests are cumbersome for administrative teams. By deploying a digital way of automating and managing these requests, the average business can save up to 10 working days in HR and finance workload. It’s more critical than ever for employers to find ways to attract and retain talent, with flexible wage access proving to be a highly effective tool. We are witnessing the dawn of a new way of working. The flexible employer-employee relationship is here, and it is based on a work-from-anywhere culture, adaptable working hours and now, flexible access to salary whenever and wherever it is required. The simple fact of the matter is that employees are more likely to work for employers that offer earned wage access and are more likely to keep working for them.

Michael Trüschler is the co-founder and CEO at FlexxPay

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