Why are we paid at the end of the month or after 30 days of work?
Simply put, the 30-day pay cycle is a construct that was conceptualised during the Industrial Revolution and we have kept this ever since – because the arrangement suits companies and their cash flow. This may benefit companies but this does not assist their employees – so why is it still so prevalent?
At SmartWage, we are challenging the 30-day pay cycle and proposing a solution that has gained enormous traction over the past months – the notion of employees having access to their wages as they are earned.
Increased cash flow for employees helps them make better financial decisions and manage debt. The largest contributor to employee absenteeism in South Africa is lacking funds to travel to and from work. The increased cash flow for employees allows for your employees to feel more valued at work and see the value they bring to the company. These employees are able to be proud of the work they do through seeing their hourly rate and the contribution they make to the company.
We partner with employers to offer their employees access to earned wages. We integrate with any payroll software, ensuring that transactions are seamless, secure and fully auditable. Using their cell phones, your employees can access their earnings and use our interactive financial education tools. SmartWage manages the entire journey from on-boarding, to transactions and queries. Our technology and customer-centric approach makes wage-access simple.
Our service allows employers to retain all the business benefits of a 30 day pay cycle, while still offering their employees earned wage access.The 30-day pay cycle is an outdated construct that is being challenged due to popular demand and Ww believe that it needs to be urgently modernised. Here’s why:
Through allowing employees access to a portion of their earned wages, this directly decreases financial stress and increases employee wellness and productivity.
By having access to earned income, employees don’t have to rely on payday loans and other expensive unsecured debt to get to their next payday. Simply put, you’ve earned it so why shouldn’t you have access to it? Getting paid as you work means you have the liberty to do the things you need, without having to worry about it or compromise your financial health.
With decreased employee stress, companies see an increased retention rate and boosted morale due to financial security and additional employee benefits.
In a country where R140 billion in debt is taken out each month, and with more than 80% of employees not being able to make it to month end without incurring debt, it is clear that this is a very pressing matter. We predict that challenges to the 30-day pay cycle will become more prevalent and influential as the Covid-19 pandemic continues to place pressure on our economy and our workers. Additionally, employees will start to question the abstract concept of not having access to the money they have earned when needed but rather being restricted to a month-to-month payment cycle.
To understand more about how earned wage access works, get in touch with us.