Demand for flexible pay solutions is growing: but payroll is behind the curveLONDON
– New report from Everest Group highlights the growing demand from employees for instant access to their earned wages
– 75% of staff across the globe are planning to move jobs, with more than half indicating that wellness and financial well-being impact their employee experience
– Employers could see talent attraction and retention hindered without flexible pay solutions
A new report by Everest Group has highlighted that people across the world want flexible access to their wages, but global solutions that meet this demand are in short supply.
The report – Global Earned Wage Access (EWA): Strategic Benefits for Employers and Financial Well-being for Employees [https://www.cloudpay.com/report/everest-earned-wage-access] – reveals that a combination of new demands from staff in a flexible world of work, the need for quick access to funds amid financial concerns and a desire for a consumerised experience, is driving a need for employers to provide access to earned wages as and when employees require it.
According to Everest Group, despite this demand, there is only a handful of vendors offering Earned Wage Access (EWA) solutions, with even fewer providing a global approach. This is indicative of a reluctance to change what may be viewed as ‘unbroken’ processes in payroll, or the lack of awareness of the availability of a global solution.
Failure to move with the times could be detrimental to hiring strategies. According to Everest Group, 75% of the global workforce are currently looking to change jobs. With 57% of respondents indicating that wellness programs including financial wellbeing have a direct impact on their employee experience, while 43% stated that process improvement was a strong influencer, future talent attraction and retention strategies could be hindered without EWA solutions.
CloudPay CEO, Paul Bartlett, commented: “The shift to more flexible payroll solutions has been gaining speed for some time, but it’s certainly accelerated in a post-Covid landscape where agile working options, combined with cost-of-living concerns, are rife. At CloudPay we’ve witnessed this evolution and have been adapting our global solutions as a result. It’s clear from Everest Group’s report that we’re only on the cusp of the adoption of Earned Wage Access and with a breadth of market drivers continuing to influence the market globally, this demand will only increase. However, there’s long been a reluctance across payroll to change processes that seemingly work.
“As the war for talent rages on, businesses need to ensure they are giving their people what they need, and to offer parity across a global workforce. According to this latest insight from Everest Group, people want more control over when and how they access their pay. Those who don’t provide this will lose out on top talent.”
This latest news follows recent data from CloudPay which revealed that the number of employers signing up for “on-demand pay services” has risen globally. This is alongside the number of withdrawals per month of earned wages that has more than doubled since October, with the average amounts withdrawn dropping from £97 to £66. This is indicative of employees increasingly accessing money they’ve already earned as and when they need it to cover daily costs of living.
The Everest Group report demonstrates that there are five key drivers of this global demand for payroll evolution:
– Generational shift in the workforce: Millennials and Gen Z will account for more than 65% of the workforce by 2025. These talent groups have different priorities and motivations and expect their employers to meet their requirements. While millennials are driven by purpose, Gen Z professionals desire flexibility and security, particularly financial security
– The need for a modern pay experience: Younger working-age populations are digital natives. They have grown up amid paperless transactions and quick resolutions at their fingertips. As consumers, they are habitual to instant gratification and have similar expectations from their employers – fast and flexible payments and a seamless digital experience
– New workforce models: The proportion of the temporary workforce, such as contingent workers, gig workers, and freelance consultants, has increased in the overall talent mix due to changing skill requirements, the need for flexibility, and the elimination of strict geographical boundaries. Part-time or hourly workers have also significantly increased in sectors such as healthcare, retail, and hospitality. Payroll operations that are hassle-free and more frequent than the bi-weekly or monthly cycle are better suited for this section of the workforce
– Financial flexibility: Living expenses, education loans, housing, etc., consume a substantial share of the pay check for working individuals and can result in a liquidity crunch, especially if an emergency expense arises. EWA is increasingly being used by such workers to help manage unexpected expenses, in addition to allowing them to align pay dates with their personal financial commitments
– Sense of fairness: Today’s employees believe that they deserve access to the wages that have already been earned. Enterprises that can offer this by redesigning the employee payroll experience will fare better in the war for talent – and innovative businesses are already beginning to reap the rewards.
Download your copy of the report here: https://www.cloudpay.com/report/everest-earned-wage-access
CloudPay is the only provider that guides global companies with vision and care toward the comprehensive pay experience their employees deserve. CloudPay connects all employee pay processes – including payroll, payments, and on-demand pay – through a unified solution. CloudPay experts implement best practices, navigate change, optimize operations, and improve employee experiences.
Contact: Vickie Collinge , 01582 790 705, firstname.lastname@example.org
Logo – https://mma.prnewswire.com/media/1918624/CloudPay_Logo.jpg