Having embraced the 2030 Agenda for Sustainable Development, India can drive sustainable economic growth by providing access to earned wages to its vast employee base
Showing unwavering resilience and rebounding strongly from the lows of the COVID-19 pandemic, the Indian economy has been the best performing major economy in the world and is increasingly emerging as the preferred choice of multinational corporations for set up their manufacturing units. Although many factors are responsible for India’s newfound popularity, the country’s economy is undoubtedly supported by the 500 million workers, including 150 million white collar workers and 350 million gray collar workers. However, despite a host of initiatives taken by the Indian government to empower this burgeoning workforce by providing easy access to financial services, it is estimated that more than 70% of the country’s workforce lives check after check. To make matters worse, at least one in three workers resort to emergency borrowing through high-cost payday loans, usually provided by local moneylenders and loan sharks with little flexibility in repayment. As a result, over 55% of employees are burdened with financial stress as they lack access to cheap short-term capital and find their work productivity hampered by the constant struggle to make ends meet.
What is Earned Wage Access (EWA)?
Responding to the need for easy and cheap access to short-term capital, a group of companies have taken the initiative to introduce Indian labor and employers to Advance Wage Access (EWA) , a technology-enabled Fintech product that provides even those with no credit history. with instant access to their earned salary. Aiming to promote financial well-being, especially among the gray collar class, EWA provides employees with access to salaries that have been earned but not yet paid in accordance with the salary credit cycle. With each day’s pay credited to the employee’s EWA account and instantly viewable through a web or mobile app, they can track their income, expenses, savings on interest charges, and even earn reward points for transactions made with merchants or partner stores. Additionally, employees have full financial control via flexible repayment options to balance expenses and income and can build their credit history with additional coaching assistance provided for the uninitiated.
How EWA helps employees gain financial independence
By providing immediate access to funds that need to be deployed for unforeseen or urgent expenses, EWA helps workers meet these short-term needs without falling prey to loan sharks who can jeopardize their financial health. Through the 24/7 helpline and financial literacy-based training built into the respective EWA provider’s mobile app, employees can access a wealth of information provided by certified financial advisors and implement simple strategies to build a safer future. Additionally, EWA is a free and hassle-free, technology-based, on-demand wage access product that can play a pivotal role in ensuring financial inclusion for the more than 350 million gray collar workers based in the country today. today.
How employers can benefit from EWA and its impact on employee satisfaction
On average, EWA can help employees save up to 30% of their income that would otherwise have been spent on interest charges for their short-term loans. Moreover, it goes a long way in alleviating an employee’s financial concerns and allows them to devote more time and attention to their professional role. Organizations, for their part, could better understand the financial challenges facing their employees and work to provide additional financial wellness services that can increase overall employee morale.
Moreover, much like how group medical insurance coverage is sought by potential and incumbent employees, EWA could become a powerful retention tool for employers and distinguish employee-centric organizations operating in the Indian economy. today. Finally, with EWA services provided by some companies as a zero-cost plug-and-play model, organizations can easily adopt it and integrate it seamlessly into their existing human resource management system.
Despite these benefits, barely 5% of Indian companies have internal financial wellness programs, with most hesitating due to operational issues. However, by choosing to partner with fintech companies providing EWA as a technology solution, companies can forego any deployment of additional human resources for the administration of these services and enjoy the benefits of the technology stack that these companies offer. . Improved employee productivity, greater job satisfaction, and minimal operational expenses are just a few of the benefits EWA offers workers and employers. It is therefore safe to conclude that access to earned wages will play an important role in accelerating a financially sound economy for India.
The opinions expressed above are those of the author.
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