The toll of the pandemic on frontline healthcare workers is almost unfathomable. It was a two-year barrage of patients, stress and fatigue that contributed to staffing shortages at a time when the need is greatest.
Employers are responding by reassessing every aspect of their offers to new workers, including how they perceive their wages.
IntelyCare, a Boston-based job placement service for nursing professionals, has begun offering Access to Earned Salary, a benefit that allows employees to receive the earned portion of their pay before the regular bi-weekly schedule.
“The power curve has shifted,” says John Shagoury, president and chief operating officer of IntelyCare. “Nurses have more control over whether and how they want to work. Having control over when they get paid helps with work-life balance.”
Read more: Too little, too late: 500,000 nurses will leave the bedside by the end of 2022
Earned Wage Access, also known as Early Wage Access or EWA, has gained popularity at the start of the pandemic. As a result, major consumer payment companies such as MasterCard and banking technology provider Fiserv entered into new partnerships with EWA companies in 2021.
EWA vendors say the product proves its value as a retention and recruiting tool.
IntelyCare, which has approximately 30,000 nurses on its platform, launched DailyPay’s EWA product in June 2021 through a partnership with Denver-based human resources outsourcing company ADP. Shortly after, IntelyCare reported a 300% increase in placements compared to 2020. EWA is not solely responsible for this growth, but it is an advantage in a job market in which professionals have a mixed unusual financial challenges and burnout, but lots of options for where to find a job.
“We thought of them who are struggling to pay their bills and make ends meet. Faster access to funds could make a difference for them,” Shagoury said. Healthcare staff access IntelyCare’s app to find shifts at hospitals, long-term care facilities and other facilities, while facilities also use the app to find staff. It’s a two-sided deal that Shagoury likens to an “Uber for nurses.”
Total employment of licensed practical nurses fell 20% between April 2020 and June 2021, according to a January 2022 study by Health Affairs. The employment of nursing aides fell by 10% and that of registered nurses by 1%. Total employment across all categories of nurses is still 10% below pre-pandemic levels. The shortage is large enough to create greater economic pressure on hospitals and other medical care providers.
Read more: Access to earned wages can be a critical benefit for small businesses and hourly workers
The decline is due to a lack of available staff, reports Health Affairs. For example, in Vermont, approximately 600 students graduate from nursing school each year, 9,000 that will be needed over the next seven years to fill vacancies.
A study conducted by Branch, a Minneapolis-based EWA provider, found that 86% of its client employers saw an average 38% increase in job applications when Branch was included in job postings. In a survey of 3,000 hourly paid employees in foodservice, retail and healthcare, 94% said access to early payment helps ease financial concerns; and staff enrolled in EWA stayed in their jobs 60% longer. Another 71% felt “more incentivized” to go to work with an employer who offered instant or up-front payment.
“In addition to providing free and instant access to earned pay, we’ve found that accelerating payments through other means and eliminating fees can also help workers, such as providing cashless tips right after each shift or the offer of rewards to earn money on daily expenses,” says Atif Siddiqi, Founder and CEO of Branch.
New York-based EWA company DailyPay launched a digital wallet in January that supports EWA disbursement. The wallet loads every day a user works. DailyPay positions the wallet as a means to mitigate overdrafts, as well as a retention game for its base of 500 employers, including Dick’s Tractor and Supply and Kroger. DailyPay’s wallet connects to over 6,000 financial institutions and supports bill payment, investments and digital payments. DailyPay’s banking partners include PNC, for which it supports real-time payday advances.
“So many people are focused on saving and building emergency funds,” says Jeenniey Walden, head of innovation and marketing at DailyPay. “Flexible pay lets people know whether they can take time off or need to schedule extra shifts.”
Read more: Access to earned wages is just a weapon in the fight for financial well-being
EWA companies have traditionally positioned their products as a safer alternative to payday loans, although consumer groups called for regulations that treat EWA advances as credit. Business models differ, but EWA companies generally charge fees under $10 per transaction. The Consumer Financial Protection Bureau has generally taken a lighter touch on EWA than on payday loans.
Gartner reports that EWA “has emerged as a cost-effective alternative that helps employees meet unforeseen urgent needs and, therefore, reduces financial stress.” Gartner adds that retention may also improve since workers are less likely to leave for another employer that does not have a similar benefit.
“If I look at three companies and one lets you get paid when you want and the others say you have to get paid every other Friday, there’s value in that,” says Matt Pierce, Founder and CEO of Immediate, an EWA Provider based in Birmingham, Alabama.
Immediate recently partnered with Automatic Payroll Systems, an HR contractor based in Shreveport, Louisiana, to offer a range of financial wellness products, including EWA. Instant also allows payday advances to be directly loaded onto prepaid cards which can be used to pay bills.
“As the big quit continues, it’s a way for companies to introduce themselves to people,” Pierce said. “That makes access to earned pay a very fast-growing space.”
The shortage of nurses mirrors employment problems in other fields. More than 4.5 million workers quit their jobs in November, a month that typically sees a surge in hiring before the holidays, according to US Bureau of Labor Statistics. Shortages should last until 2022 and impact categories that are favorable to payroll alternatives such as EWA such as catering, healthcare, utilities, and transportation.
“As the world tries to recover from the pandemic, we’re seeing more and more employers getting early access to salaries,” said Peter Mullen, senior vice president of PayActiv in San Francisco.
Yard workers, freelancers and contractors are EWA’s traditional sweet spot, and today they are joined by staff at quick service restaurants, home care providers and call centers, Mullen said. PayActiv has also increased its efforts to place its service in recruitment advertisements.
“An HR person can offer potential employees greater control and access to cash as part of their daily lives,” says Mullen.