What is Pay on Demand (Earned Wage Access)?
EWA allows employees to access a portion of their accrued wages before payday. For workers, it provides financial flexibility, reducing reliance on high-interest credit cards or payday loans. According to a 2023 survey (by the SIA), nearly 50% of UK employees have no emergency savings, leaving them vulnerable to unexpected expenses. By offering EWA, employers can alleviate financial stress and foster greater financial well-being among their teams.
The evolution of Pay on Demand.
Pay on Demand – otherwise known as Earned Wage Access (EWA) – is transforming how employees in the UK manage their finances and how employers approach payroll. The traditional monthly pay cycle, a longstanding norm, is no longer aligned with the financial needs of today’s workforce. Instead, employees are demanding more flexibility and businesses are recognising the strategic advantages of meeting these expectations.
As the battle to attract and retain talent intensifies, organisations are leveraging innovative tools like EWA to differentiate themselves and stay ahead in an increasingly competitive market.
Why earned wage access matters?
Traditional payroll cycles, often monthly in the UK, were established long before the digital era. Advances in payroll technology have made these cycles increasingly outdated, with many workers questioning why they must wait weeks for wages they have already earned. This delay effectively amounts to a zero-interest loan from employee to employer, a practice that is becoming harder to justify.
Technology driving EWA adoption
The UK is experiencing rapid growth in EWA adoption, driven by advancements in:
- Mobile apps: User-friendly apps provide employees with instant access to their earned wages and offer financial education tools.
- Secure payment platforms: Modern fintech ensures fast, reliable transfers directly to employees’ bank accounts, often within seconds.
- Data security: Enhanced encryption and compliance with UK data protection laws provide peace of mind for users.
Pay on Demand and employee wellbeing
Pay on Demand has emerged as an ethical alternative to payday loans. Leading providers in the UK follow a code of practice endorsed by the Financial Conduct Authority. This ensures transparency and ethical standards in delivering on-demand pay services.
For employees, Pay on Demand reduces financial stress and helps them manage their finances more effectively. For employers, the benefits are clear:
- Improved staff retention
- Higher morale and motivation
- Quicker recruitment processes
- A greater willingness among staff to take on overtime or additional shifts
A global leader in EWA
The UK is at the forefront of EWA adoption in Europe. The government has introduced the Employer Salary Advance Scheme, which aims to encourage responsible EWA practices while addressing the financial challenges faced by workers.
In sectors like retail and hospitality, where monthly pay cycles often leave workers financially stretched, EWA provides a much needed lifeline. With large employers and staffing agencies leading the charge, more businesses are recognising the benefits of integrating EWA into their payroll processes.
The future of EWA in the UK
The demand for financial flexibility is set to grow, with the global EWA market expected to increase at an annual rate of 17-20% by 2032 (Value Marker Research). In the UK, where workers are more accustomed to monthly pay, the potential impact of EWA is even greater. Employers offering this benefit can position themselves as leaders in employee wellbeing, enhancing their appeal in a competitive market.
Pay on Demand or Earned Wage Access is not just a payroll innovation; it’s a commitment to supporting workers’ financial health and fostering a fairer, more responsive workplace. For UK businesses looking to stay ahead, EWA offers a compelling opportunity to build a happier, more productive workforce.
Why Pay on Demand boosts employee retention
Employees who experience financial stress are more likely to seek alternative employment for better pay or flexibility. Offering Pay on Demand (Earned Wage Access) is a tangible way to show your organisation values employee wellbeing. By implementing mypod, employers can:
- Reduce staff turnover by alleviating financial worries.
- Create a workplace where employees feel supported, boosting loyalty.
- Encourage greater trust and transparency between management and staff.
- In competitive industries like recruitment/staffing, where turnover rates are traditionally high, access to EWA can make your company an employer of choice!
Gaining a competitive edge with mypod
Adopting Pay on Demand (EWA) isn’t just about supporting your staff. With mypod, businesses can:
- Attract top talent by offering financial flexibility as a key employee benefit.
- Differentiate from competitors who rely on outdated payroll cycles.
- Improve staff engagement, leading to increased productivity and morale.
- By promoting financial wellness in the workplace, companies can create a culture where employees feel empowered and supported, which ultimately benefits both individuals and the business.
