Employee satisfaction is inextricably linked to workplace productivity and long-term organizational performance. The financial well-being of Indian employees has been widely discussed, but studies on the subject are scarce. The majority of employees are still paid monthly, leaving them financially unsupervised. It also makes it difficult for them to meet their immediate needs. There is much room for innovation in the way employees are rewarded over the years.
Early access to wages is the order of the day and a fundamental foundation for employee financial well-being. The intention is to get them to a point where they can fulfill their commitments and make decisions. Living paycheck to paycheck exposes employees to financial risks such as payday loans and short-term credit facilities, creating a spiral of debt. Employee motivation and retention drops dramatically due to poor financial health. Financial strain and emotional stress caused by lack of money can lead to distractions, search for opportunities and a clear lack of motivation at work. None of this bodes well for productivity.
timing is everything
But what if an employee could receive their compensation sooner? It would certainly ease some of their financial burdens. EWA is a relatively new and unique concept for the Indian market and is clearly different from consumer loans, salary advances and payday loans. It’s a fintech product that allows employees to access a portion of their “worked” but unpaid wages before payday without disrupting the payroll process. One of the industry’s leading EWA players employs multi-pronged go-to-market strategies with no hidden costs. It offers unique, hassle-free repayment options that allow the user to avoid going through the extensive process of EMIs, thereby simplifying the entire process.
The employees are enthusiastic about the EWA concept. According to recent reports, over 70% of respondents consider EWA a crucial factor in their next career move. EWA helps to retain employees and attract new talent. It helps people better align their income and expenses while reducing their reliance on high-yield loan schemes. Unlike salary loans (salary advance) or payday loans, EWA does not require the employee to borrow money. EWA also provides clients with additional liquidity to meet unforeseen or urgent needs and enables investment planning and financial well-being. Earned Wage Access frees both workers and companies from the traditional pay cycle.
A win-win innovation
EWA possesses the ability to increase employee morale and productivity. It creates a trusting environment in the workplace. Employees who believe they are in control of their finances are less concerned about their finances, come to work more motivated and are significantly more productive.
In a global economy, we need to look beyond the conventions of the industrial age and assembly-line methods that have little bearing on the way business – and life – is done today. We need to expand the scope of financial well-being beyond insurance and social security benefits. It’s a pastime for modern businesses to include access to earned wages as part of their employee value proposition. EWA is a breakthrough approach to improving payroll, an excellent opportunity to be future-proof and a multifaceted solution to boost employee retention and lifestyle in the post-pandemic era.
(The author is Mr. Akbar Khan, CEO, Rain and the views expressed in this article are his own.)