With the holidays upon us, restaurants and hospitality organizations are jumping on earned wage access (EWA) as a fee-free way to combat the labor shortage we've seen organizations face in 2022. EWA allows employees to receive a portion of their earned wages the same day they work at no cost to the worker or employer and helps close the gap during financially tight times between traditional paydays.
In 2022, our Wages and Wellbeing study found that 79 percent of working Americans would be more interested in applying for a job that pays them the same day they work – 30 percent higher than in 2018. And more than half (56 percent) of working Americans would stay a month to over a year longer at a job if they could get immediate access to their earned pay after each day’s work at no cost, ultimately saving organizations thousands of dollars annually.
Eighty-seven percent of Gen Z have reported that they would be more interested in applying for a job that pays them the same day they work – the highest percentage of all generations thus far. And with Gen-Zers set to hold up to 36 percent of the workforce by the end of this year, employers will need to take note of their demands to recruit and retain this generation.
With responsible on-demand pay, employers can give all employees more control over their financial wellness and simultaneously reduce the pressure on payroll professionals caused by increased turnover and new hires.
In the next year, employees at all levels and across industries will continue to seek new options for access to their pay, with earned wage access (EWA) leading the charge. Because EWA was created first out of need, as an alternative to predatory lending, and the high fees associated with this practice, there hasn’t been a strong demand for choices. As on-demand pay becomes ubiquitous – and it will – there will be more of an emphasis on optionality.
With another 60 million or so candidates for EWA in the United States alone, we’re early in the market's growth. As EWA companies are required to pivot to modify their revenue structures and invest more in the technology required to support an increased level of optionality, the field will likely begin to narrow.