To attract, engage, and retain talent, enterprises need to ensure they are aligned with current trends, understand employee pain points, and redesign experiences — including payroll.
Work models have been through major shifts in recent years. Following trends such as flexibility in working hours, new forms of employment (permanent and contingent), and a diverse and globally dispersed workforce, there is now a larger focus on models that allow employees to work anytime, anyplace, and anywhere.
This leads to redesigning employee experiences — including payroll.
A recent study by Everest Group has examined the factors driving earned wage access (EWA) solutions, and the key considerations to keep in mind when rolling out such a solution to employees. As the study clarifies, EWAs allow employees to access a portion of their income ahead of the fixed bi-weekly or monthly payday. This is spurred by the need for control and financial flexibility for a better pay experience.
Several factors were noted to drive enterprises to revamp the payroll experience for employees.
Generational shift in the workforce: With the workforce currently comprising five generations, according to Everest Group, Millennials and Generation 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. The report believes, 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. Additionally, 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: In recent times, the proportion of the temporary workforce, such as contingent workers, gig workers, and freelance consultants, has increased in the overall talent mix. Part-time or hourly workers have also significantly increased in sectors such as healthcare, retail, and hospitality. More frequent payroll operations than the bi-weekly or monthly cycle may be better suited for these sections of the workforce.
Financial flexibility: Living expenses, education loans, housing, and a variety of other factors consume a substantial share of the paycheck for working individuals and can result in a liquidity crunch, especially if an emergency expense arises. EWA may help manage such unexpected expenses.
Sense of fairness: Above all, today’s workforce, whether Millennials or Gen Z, truly believes that it deserves access to the wages that it has already earned.
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