Earned Wage Access: Still a mystery benefit, survey says

Earned wage access (EWA) — designed to give employees faster access to their wages — is an underused and often misunderstood benefit, according to a new survey of more than 150 human resources leaders.

Instant Financial, a provider of on-demand pay solutions, partnered with HR Dive’s studioID to determine how companies perceive and use EWA to attract, retain, and engage employees, and the results are compiled in a new report titled “Earned Wage Access: Is HR Sleeping on This Valuable Benefit?” The survey also explored some of the challenges employers face when implementing EWA; about one-third of all respondents expressed confusion regarding eligibility, payroll integration, and buy-in from senior leadership.

“This survey highlights the opportunities that exist for organizations to adopt EWA, yet also brings to light how misconceptions can lead to a lack of program success,” Tal Clark, chief executive officer of Instant Financial, said in a statement.

Additional findings from the survey:

• In addition to helping companies attract, keep, and motivate employees, 45% of executives said they offered EWA in order to be leaders in their field, and 43% said they offered it to match the EWA offerings of their competition.
• Among the missed opportunities to optimize EWA are better linking EWA to diversity, equity, and inclusion goals, addressing the perceived stigma of using the benefit among salaried employees, and better understanding the impact of EWA within an organization.
• For 71% of respondents, the primary reason they don’t use EWA is that employees haven’t asked for it. But, as researchers noted, this may simply mean there’s a lack of awareness among employees about the benefit.

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• Human resource leaders are divided about who should pay for earned wage access: the employer, the employee, both, or neither. Not all EWA providers offer the same fee structure, with some (including Instant Financial) providing no-cost access to companies and their workers.
• Respondents who don’t offer EWA said they held off because of the following challenges: determining which employees were eligible (39%), integrating EWA into the payroll system (32%), getting senior leadership buy-in (32%), and affording it (31%).