Express news service
NEW DELHI: If a person could accumulate their daily earned salary, would that ease their financial pressures? About 38% of those polled in a survey answered yes to what may seem like a hypothetical question but is not.
A bank-like setting, where you can see and withdraw the money you’ve earned, or as it’s called, Earned Wage Access, is a fintech product that allows employees to access a portion of their accumulated salary but unpaid at any time before payday.
Employees, according to a Refyne survey, seem delighted with the new concept. While 77% of those surveyed are positive about this concept and are ready to rate its use, 28% said they would use an EWA product. Notably, 59% of those surveyed would see EWA as a deciding factor for their next job.
The report further found that the greatest interest in EWA exists among Millennials. Employees believe EWA will help them with more cash flow to manage unexpected expenses, investment planning, and improve their well-being. financial.
But what about employers?
Refyne, which claims to be India’s first and largest EWA platform, established in 2020, has onboarded 120 clients in the past year. months of growth with new clients as well as increasing adoption by staff of existing partners as employers can clearly see the benefits for their employees (both full-time and on contract) with the Salary Access solution won from Refyne.
“For employers, Refyne is a free, risk-free product that integrates seamlessly with any payroll and HRMS software. Refyne manages the capital for withdrawals of earned wages, which means employers’ working capital stays intact and allows them to maximize their cash flow. EWA also saves man hours for HR managers spent processing salary advances and associated paperwork, ”said Sharma, noting that Refyne has no direct competitors in the country and that its Indirect competitors include payday lenders, loan applications, loan sharks, and other informal and unregulated credit program providers.
Akbar Khan, who is the CEO of an EWA start-up, Rain India, says his company works with major corporate clients across manufacturing, IT, personnel, healthcare, hospitality and other sectors in India. He says there are only a handful of EWA Companies operating in India.
“EWA is a relatively new concept for the Indian market which clearly differentiates itself from personal / consumer loan, payday advance and payday loans. “
Before Rain launched its business in India earlier this year, they also undertook an in-depth primary research exercise of the salaried employee cohort.
“Some of the interesting information from the research demonstrated a strong product market for EWA and the need for a credible global financial wellness provider with deep local expertise. For example, 90% of respondents received their salary once, at the end of the month, while 20% ran out of funds in the first 10 days of the month, 40% in the middle of the month and 85% at the end of the month. month,”
Sumeet Doshi, Country Manager, UKG India, a company that recently partnered with Rain, says providing access to their own salaries is key to ensuring employees feel valued and supported and are able to take charge their own financial well-being.
“Our partnership with Rain India ensures that we continue to deliver on our commitment to providing meaningful and impactful solutions to our customers here in India. “
While employees seem intrigued, HR managers are concerned about integrating the EWA solution into the lifestyle or culture of the Indian workforce.
“The reason is that the flexibility to access wages on any day of the month will require a lot of administrative work. Another big challenge that HR managers foresee is the flight of workers. In western professional culture, the longevity factor is quite high. Employees stay in their company for a long time. In India, on the other hand, there are many sectors where attrition is very high, ”explains Vicky Jain, founder of the technology start-up RH uKnowva, explaining that such a change will require a major transformation of the culture of the company. organization because a whole.
Also, from a technical standpoint, the existing payroll infrastructure may not be configured to handle regular employee demands to pay, Jain said.
“While there is no doubt that EWA is a revolutionary approach to improving payroll, a fantastic opportunity to be progressive and forward-thinking, and a flexible way to support changing work habits and patterns. life of employees in the post-pandemic era, but implementing the same in Indian work culture would not be an easy task. The concept is still new and only time will tell if it will gain traction in Indian work culture, ”he added.
Earned Wage Access (EWA) is a fintech product that allows employees to access a portion of their accumulated but unpaid wages anytime before payday.
Millennial professionals show maximum interest in EWA.
Employees believe it will help them with more cash to manage unforeseen expenses, plan investments, and improve their financial well-being.
Employers fear that the flexibility of accessing wages on any day of the month will require a lot of administrative work.