See how top employers in South Africa are empowering their workforce and boosting productivity by implementing Earned Wage Access
Is your employees’ financial stress negatively impacting their work?
Research shows 75% of South African employees are living paycheque to paycheque while up to 70% cannot pay all their bills on time. And it has a dramatic impact on their general wellness and ability to perform at work.
Landmark research by Visa on employee health, engagement and financial wellness related to economic pressures and earned wages showed some 84% of employees are deeply worried about their finances even while at work – while a further 68% say the resulting financial stress impacts their health.
The reason? Since less than half of South African employees have an emergency fund, unexpected expenses drive an inordinately large number of people to take on debt – both formal (which already has high repayment terms) and increasingly unsecured credit, to a point where the average household spends as much as 62% of its monthly income to repay debt.
These workers typically resort to taking out uninsured credit or loans from illegally operating loan sharks (by some estimates up to 40% of SA households), which charge exorbitant interest rates of up to 50%, further increasing financial stress.
The good news is employers can help employees break this destructive debt cycle and get employees back to performing their best with innovative and empowering tools like Earned Wage Access.
What is Earned Wage Access?
Earned Wage Access (EWA) is a zero-cost benefit companies can offer to employees that allows them to access a portion of their earned wages before their official payday. This is done through simple-to-integrate and easy-to-use software that also allows employers to set controls and limits on how much employees can access.
Unlike traditional payroll systems that distribute wages on a fixed schedule, EWA provides flexibility by enabling employees to tap into a portion of wages they’ve earned up until that date as needed.
EWA is not a loan, but a tool designed to help employees manage their finances more effectively and avoid the pitfalls of payday loans or other high-interest credit options.
How Does it Work?
Setting up Earned Wage Access typically involves the provider integrating with an employer's payroll system. Here's a step-by-step breakdown of how it works:
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Data Extract and Profile Setup: The employer simply provides a monthly payroll data extract of employee information (names, bank details, net salary, and phone numbers).
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Request: Employees can request access to a portion (normally 25%) of their earned wages through our easy-to-use WhatsApp channel.
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Control & Oversight: As an employer, you can set controls on how much your employees can access, limiting the number of withdrawals and amount per withdrawal or the total net salary amount. This ensures you have oversight and control at all times
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Transfer: Once the request is approved, the requested amount is transferred to the employee's bank account, usually by the evening or the next business day. As an additional benefit there is also an “instant” option that will clear within 5 minutes, in case of an emergency.
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Reconciliation Sheet: At the end of the pay cycle, Jem provides the employer with a reconciliation sheet containing a list of all withdrawals. This sheet is simply imported into any payroll system as a new type of deduction.
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Repayment: The accessed amount is then deducted from the employee's next paycheck, ensuring a seamless repayment process.
With EWA via Jem HR, there’s no extra cost or tax impact whatsoever to the employer. 
The Benefits of Earned Wage Access for Employees
EWA gives employees the benefit of financial support in an emergency, as well as reducing financial anxiety and improving well-being.
Providing access to their wages as they earn empowers them with the security of immediate financial relief for unexpected expenses or emergencies, without having to resort to high-interest loans or credit cards. This promotes financial stability, while the inherent flexibility helps employees manage their finances more effectively.
Furthermore, EWA helps alleviate financial anxiety, improving overall well-being, job satisfaction and ultimately productivity. In fact, research shows that 95% of employees appreciate and want to work with an employer who offers Early Wage access. And 89% tend to work longer for such an employer.
The Benefits for Employers
Employers who offer an Earned Wage Access benefit can benefit from better employee retention and increased productivity, as well as reduced admin and risk in manual loan management.
Creating such a much-needed function for employees demonstrates an employer's commitment to their employees' financial well-being, leading to increased loyalty, higher job satisfaction, and lower turnover rates.
What’s more, providing EWA as a benefit also enhances productivity. Financial stress is a major distraction for employees, affecting their focus and productivity. By reducing financial stress through EWA, employers can create a more focused and productive workforce.
Furthermore, by formalising Earned Wage Access as a benefit, employers reduce the admin and risk in managing any advances and loans manually. 
Continue on to Part 2 of our comprehensive guide to Earned Wage Access in South Africa to unpack some of the common misconceptions of EWA, and learn what steps you should take to choose a provider.
