Earned wage access is just one weapon in the fight for financial wellness

Employees struggling to stretch their paycheck can benefit from earned wage access, yet employers have been slow to offer this in-demand benefit.

Currently, earned wage access is offered by just 5% of large U.S. companies with a majority of hourly paid workers, according to the Society for Human Resource Management. However, that figure is expected to jump to 20% by 2023.

By allowing employees — especially hourly workers living paycheck to paycheck — the chance to access the money they have already earned ahead of payday, employers are helping to alleviate significant financial burdens caused by COVID-19, while retaining employees and offering a competitive recruiting advantage.

Read More: Does your payroll need a makeover? How earned wage access can help employees take financial control

“The world we're living in has significantly changed the way in which employers and employees do business together,” says Brian Radin, president of Comdata Prepaid, a company that helps businesses and employers create payment programs. “Employees have the upper hand on employers, which is very different from the traditional relationship of here is the job and if you don’t want it we’ll get someone else to do it. It’s an employees’ market.”

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Earned wage access is a major component to improving employee financial wellness, but it can’t do all the work on its own, Radin says. Employees need their companies to truly invest in their financial well-being, and that means providing more than just one helpful tool.

“Employees have a paternalistic view when they look at [their employer] to help ease [financial anxiety],” he says. “Earned wage access is a competitive tool, but it's not the only thing employers can do.”

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Radin says employers can raise their minimum wage and add better employee benefits that provide financial education and even coaching.

“All of those things together are what most employers, especially larger employers, are having to figure out,” Radin says. “But this is one way to make yourself as a business more competitive and give your employees more peace of mind.”