Over 1 million Australians started new jobs between November 2021 and February 2022. In what is termed the “Great Resignation”, post-pandemic Australians are reconsidering their employment salary, benefits and flexibility leading to a significant reshuffling of the workforce. Although the Great Resignation in Australia has been much more gradual compared to the US, its implications remain important for businesses seeking to hire and retain the best talent. In June 2022, the Australian Bureau of Statistics found that 31% of businesses struggled to recruit workers, suggesting that employers need to change their internal processes to adapt to the workplace of the future.
In a survey conducted by ngs super, 48% of Australia’s workforce is worried about their finances with more than one third citing their finances as a major cause of stress. This is particularly the case for the nearly 50% of Australians living paycheck to paycheck as large and sudden expenses can lead to them requiring high interest-rate loans which can only worsen their financial situation. To make matters worse, 9 in 10 employees do not want to talk to their employers about their financial stress, according to a recent report by EY. Therefore it is no surprise that compensation and benefits are among the most important factors that employees look for when seeking new employment.
In response to increased demand for talent, many companies have been introducing earned wage access (EWA) services, such as those offered by Paytime, to improve the flexibility of pay for their employees. EWA allows employees to access their wages as soon as they are earned rather than waiting for their next paycheck that may be weeks away. By simply signing on to a mobile app, employees can withdraw their earned wages with 0% interest, no roll overs and no late fees. Additionally, no information is shared with credit reporting agencies (because Paytime is not a loan, it’s more akin to ‘payroll on-demand’, which means that employee credit scores are never affected.)
There are 3 main reasons why EWA services help to keep businesses relevant in the eyes of employees searching for a new job.
1. Employee Retention and Attraction of New Talent
The increased flexibility of pay given to employees of companies that implemented EWA significantly improves its employee value proposition. In a survey by Harris Poll in August 2021, 78% of employees said that EWA services would increase their loyalty to an employer. This is further supported by statistics collected by other EWA companies such as PayActiv, which reports that employees using their service see a 19% reduction in turnover. For employees concerned about the rising cost of living and inflation, EWA can be a deciding factor when choosing between potential employers.
2. Employee Productivity
It is estimated that 39% of Australians spend two or more hours during the working week thinking about their finances, taking away valuable time that they could be focusing on their work tasks. This is equivalent to over $4,000 in annual productivity losses on each employee due to financial stress. EWA helps to overcome this issue by reducing employee financial burden leading to 75% of employees noting a reduction in unplanned absences from work and 87% reporting an increase in their motivation.
Additionally, the availability of EWA makes additional open shifts (driven by other team members falling sick, or taking leave) feel like a direct opportunity to earn more, leading to employees filling shifts 2x as quickly and working 20% more hours.
3. Employee Mental Health
In a survey by Earnin in 2020, 77% of employees noted an improvement in their mental health and 82% reported feeling less stressed following the implementation of EWA in their companies. Mental health initiatives have become increasingly important for employees measuring their satisfaction with their employer. Due to the high number of employees reporting financial stress as the number one source of mental distress, EWA serves as a way for employers to help relieve this burden.
EWA services help to attract and retain talent while improving employee productivity and mental health in the changing post-pandemic environment. You can learn more about EWA and its benefits here.
Click here to find out more about Earned Wage Access as an employee, or click here for an information page to send to your employer.
