Nearly 80% working professionals in the country would prefer the flexibility of getting a portion of their salary before the month end. It’s a sentiment that has further strengthened since the pandemic and its impact on the economy. In fact, about 60% professionals would consider earned wage access (EWA) as one of the criterion while choosing their next stint. EWA is a fintech product that allows employees to opt for advance payment of a portion of their salary before the month end.
The findings are part of ‘Earned Wage Access in India: The final frontier of employee well-being’ report by Refyne, an earned wage access solution provider, and Ernst & Young. The report focuses on financial well-being of employees, and the willingness of employers and employees in adopting EWA. The report’s findings were based on the responses of 3,010 employees across India.
The report acknowledges that inflation, job losses, low salary hikes, low liquidity, medical expenses, and overall economic impact from the pandemic has impacted overall financial health of white collar workers. So it’s not surprising that 81% believed they needed more cash flow during the current pandemic. Just 38% respondents felt happy and in control of their financial well-being. What’s interesting is that even among high income groups, that comprised nearly 60% respondents earned over ₹1 lakh a month, they too were unable to stretch their salary to meet monthly expenses.
Since the second wave, especially, over 70% respondents faced unexpected high expenses, perhaps owing to medical costs. Over 80% respondents drained their salaries before the end of the month, while 34% spent through their pay before reaching middle of the month. This has resulted in financial stress that in turn has affected their motivation and productivity.
While people dipped into their personal savings to tide over financial challenges, about 41% respondents, who fell short of funds, resorted to taking loans from family, friends or using credit cards. Only 13% respondents reserved sizable amount their salary into savings. With the option of EWA, 38% respondents felt they could mitigate unexpected expenses and plan their finances better.
“The need for a better quality of life, evolving mindset and impact of the Covid-19 pandemic is creating a fundamental shift in the way employees think about and manage their finances. Employers have a critical role to encourage responsible and disciplined financial behaviour among employees,” said Chitresh Sharma, CEO and co-Founder, Refyne.