Everyday is payday with Earned Wage Access

By Alex Kim

As a business leader, proving success can be very straightforward - organisational efficiency, growth, and profitability are all good indicators of a job well done.?

However in big businesses with hundreds or thousands of employees, profitability and growth might not always be indicators of financial stability for all levels of the workforce.

The livelihoods of low-income and daily wage earners are often overlooked under the umbrella of ‘minimum wage’ and ‘fixed hourly rates’.?

While employers may be keeping up with standard payment policies, on a real-life level this plays out differently. Low-income workers might be equipped to manage day-to-day expenses, but many are also just one unexpected expense away from financial ruin. An accident or illness could be what pushes these workers over the financial edge.?

But why should the bosses care about how each employee manages their finances? Put simply - their financial stability indirectly correlates to your success. It’s not about focusing on pay rises (although, this can help), but rather looking beyond base wages in order to ensure you’re providing a happy and stable workplace for all employees.?

Protecting low-income workers, the heart of big business?

“I’m so sorry to ask, but my motorbike broke down and I don’t have enough money to get it fixed, due to a leak in the roof earlier this week. If I don’t fix my bike, I won’t be able to go to work. Is it possible to get an advance on my salary?”?

The hard truth is, It’s difficult to imagine a manager on the factory floor or in an F&B establishment who hasn’t experienced a version of this story at some point in their career.?

Among the low-income workforce, stress caused by financial instability and burdens is one of the leading causes of resignations and absenteeism. A hard-working employee who, despite his or her best efforts, is not equipped to tackle a personal financial rainy day, is less likely to develop loyalty towards the employer, resulting in rapid moves from organisation to organisation.?

This financial instability has a knock-on effect. In Malaysia, 88% of the workforce has borrowed money from informal lenders, be it an employer, family and friends, or other forms of money lenders. This is concerning, as informal lenders are often associated with high interest rates, putting low-income workers into even more stressful situations. In addition, 55% of Malaysians are underbanked, meaning they have no access to traditional forms of financial opportunities, such as loans and credit cards, leaving them unequipped to deal with financial emergencies.?

No matter what industry we’re talking about, daily wage earners - those who are most at risk of falling into these financial traps - are at the heart of big corporations, and keep the organisation running at the ground level. If they’re not looked after, protected, and able to be financially independent, this can lead to high levels of absenteeism and employee turnover, which ultimately affects business reputation, service, output and quality.?

Ensuring that these workers have access to emergency funds when needed can play a big part in increasing worker happiness, retention rates and productivity.?

It’s time to re-think payday?

While it’s unrealistic to look at raising wages across an organisation, it is possible to re-think the functionality of payday at all organisations. When faced with financial emergencies, it is often the unexpected nature of the expense that is causing the problem.?

Access to earned wages early or mid-month could make a huge difference for workers suddenly faced with unexpected expenses. As they have already worked their hours, there shouldn’t be any issue in allowing employees to access the funds in an emergency situation - and why shouldn’t workers be allowed to access money they have already earned to help overcome a financial emergency??

This is precisely what earned wage access (EWA) solutions do. It’s about giving? workers access to money they have already earned - bearing no risk to the employer, but providing all the support to the employee.?

In addition to this, EWA services that are partnered with major banks, such as Paywatch, not only empower employees to proactively manage their financial challenges, but also bridge low-income employees with the banking system, opening more doors for future financial aids and opportunities.?

By taking a small step and re-thinking payday, employers are taking a huge burden off their low-income employees, creating a more loyal and productive workforce in the long run.?