Texas Employers: How To Attract Employees and Increase Employee Retention with Earned Wage Access

If your company is having trouble with employee retention and recruitment in 2021, you’re far from alone. 

In July 2021, 49% of small business owners reported that they couldn’t fill job openings, according to the National Federation of Independent Business.[1] Further, so many workers are rethinking life and quitting their jobs post-pandemic in what’s being called “The Great Resignation.” [2] Not to mention, 95% of CFOs recently surveyed by CNBC said it was harder to fill open positions in Q3 of 2021, while 90% were planning to raise wages to remedy the problem. [3]

Maintaining a strong and loyal workforce has become a major challenge. However, before bumping up your payroll or investing in costly employee benefits, there’s a cost-free option to consider that both attracts employees and increases employee retention — it’s called earned wage access (EWA). 

Learn more about how EWA works and why it’s especially important for employers and employees in Texas. 

What is Earned Wage Access (EWA)?

Earned wage access is an employee benefit that offers on-demand payments without any costs for employers. With Pronto Pay, EWA plugs into your payroll system, seamlessly enabling employees to access their accrued pay at any time. They can log in to a user-friendly mobile app, make the request, and pay a small flat fee per transaction.

How Texas Employers Can Attract and Retain Talent with EWA

Earned wage access gives employers a new, cost-free way to differentiate your company and incentivize employees to work for you. Meanwhile, it gives employees the freedom to access the money they’ve already earned on their terms, which, as you’ll see below, can mean massive savings to their bottom line.

After implementing earned wage access, businesses have seen remarkable ROI, including reducing turnover by 25 to 50%, lowering absenteeism by 26%, and improving productivity by 25%. [4] Why are they seeing these results? The benefit helps to enhance employee financial wellness, reducing the levels of stress they experience, leading to improved overall well-being and an improved ability to focus at work.

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How EWA Enhances Texas Employee Financial Wellness 

Consider that 39% of U.S. adults can’t pay for unexpected costs of $400. Further, 78% of U.S. [5] workers live paycheck to paycheck, and 36% fall short on expenses between pay periods. This is a prominent problem in Texas,[6] a state with the 14th highest poverty rate[7] in the Nation and a minimum wage of just $7.25 [6].

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78% of U.S. workers live paycheck to paycheck

When ends don’t meet, many employees turn to predatory loan options, which can quickly put them in a downward debt spiral. Unfortunately, Texans face the steepest payday loan rates in the Nation, with a typical APR of 664%. [8] That means if an employee takes out a payday loan of $400 for 14 days, they will pay $101.87 in interest! [9] With earned wage access, the fee would be minimal, similar to an ATM fee.

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As you can imagine, EWA is an immensely valuable employee benefit that provides an easier, more affordable way for employees to meet their financial obligations. It’s no wonder 95% of employees say they want on-demand pay while 89% say they would switch jobs for this type of benefit. [10]

Incentivize Your Workforce with Pronto Pay

Earned wage access is a win-win for both employers and employees. It doesn't cost you anything as the employer and gives employees an affordable way to access their paychecks early. Additionally, employees gain more financial freedom and flexibility; it's another good reason to remain loyal to your company. 

Ready to join the many who are enhancing employee financial wellness, and in turn, attracting and retaining their talent? Fill out the form to learn more about earned wage access with Pronto Pay!

References

[1] P.    Davidson, "Breaking down the big US labor shortage: Crunch could    partly ease this fall but much of it could take years to fix," 7    September 2021. [Online]. Available:    https://www.usatoday.com/story/money/2021/09/07/labor-day-2021-when-worker-shortage-end/5674223001/.

[2] A. HSU,    "As The Pandemic Recedes, Millions Of Workers Are Saying 'I    Quit'," NPR, 24 June 2021. [Online]. Available:    https://www.npr.org/2021/06/24/1007914455/as-the-pandemic-recedes-millions-of-workers-are-saying-i-quit.

[3] "Pandemic    unemployment benefits are ending, but for big companies, labor shortage    worries aren’t," CNBC, 1 September 2021. [Online]. Available:    https://www.cnbc.com/2021/09/01/unemployment-benefits-are-ending-job-market-hiring-worries-arent.html.

[4] T. B. a. S.    Kumar, "The Power of the Salary Link," Harvard Kennedy School |    Mossavar-Rahmani Center for Business & Government, 2018. [Online].    Available:    https://www.hks.harvard.edu/centers/mrcbg/publications/awp/awp88.

[5] A. Nova,    "Many Americans who can’t afford a $400 emergency blame debt,"    CNBC, 20 July 2019. [Online]. Available:    https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html.

[6] "State    Minimum Wage Laws," 30 September 2021. [Online]. Available: https://www.dol.gov/agencies/whd/minimum-wage/state#:~:text=Texas-,Basic%20Minimum%20Rate%20(per%20hour)%3A%20%247.25,minimum%20wage%20rate%20by%20reference..

[7] "Texas    Poverty Rate Fourteenth Highest in Nation," [Online]. Available:    http://www.trelliscompany.org/wp-content/uploads/2018/08/SOSA5.pdf.

[8] M.    Leonhardt, "Payday loans can have interest rates over 600%—here’s the    typical rate in every U.S. state," CNBC.COM, 16 Feb. 2021. [Online].    Available:    https://www.cnbc.com/2021/02/16/map-shows-typical-payday-loan-rate-in-each-state.html.

[9] "Payday    Loan Calculator," OMNI Calculator, [Online]. Available:    https://www.omnicalculator.com/finance/payday-loan.

[10] PowerPoint    Presentation (visa.com).

 

 

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