Employee satisfaction is inextricably linked to workplace productivity and long-term corporate performance. The financial well-being of Indian salaried employees has been extensively addressed, but there are hardly any studies on the subject. Most employees are still paid monthly, leaving them without financial protection. It also makes it difficult for them to meet their immediate needs. To a large extent, there is a requirement for innovation in the way employees are compensated over the years.
Early Wage Access is the need of the hour and a critical foundation for employee financial well-being. The intention is to bring them to a point where their obligations are fulfilled and they can make decisions. Living paycheck to paycheck exposes employees to financial risks like payday loans and short-term credit facilities, creating a spiral of debt. Employee motivation and retention drops dramatically due to poor financial health. The financial strain and emotional stress caused by a lack of funds can lead to distractions, opportunity seeking, and a distinct lack of motivation at work. 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 the financial stress on him. EWA, being a relatively new concept and unique to the Indian market, is clearly differentiated from consumer loan, salary 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 implements multi-faceted marketing strategies, with no hidden fees. It provides unique and hassle-free payment options that allow the user to bypass the heavy EMI process and thus simplify the entire process.
The employees are enthusiastic about the EWA concept. According to recent reports, more than 70% of respondents consider EWA to be a decisive factor in their next career move. EWA contributes to employee retention and attracts new talent. It helps people better align their income and expenses while reducing their reliance on high-interest credit plans. Unlike salary-based loans (salary advance) or payday loans, EWA does not require the employee to borrow. EWA also provides clients with additional liquidity to manage unforeseen or urgent needs, in addition to enabling investment planning and financial wellness. Access to earned wages frees both employees and businesses from the traditional pay cycle.
A win-win innovation
EWA possesses the ability to increase employee morale and productivity. Build an environment of trust in the workplace. Employees who believe they have control over their finances are less likely to be anxious 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 have little relevance to how business and life are done today. We must expand the scope of financial wellness beyond insurance and social security benefits. It is a hobby for modern companies to include access to earned salary as part of their value proposition to employees. EWA is an innovative approach to payroll improvement, an excellent opportunity to be prepared for the future, and a versatile solution to promote employee retention and lifestyles in the post-pandemic period.
(The author is Mr. Akbar Khan, CEO of Rain and the views expressed in this article are his own)