●        Nearly 74% of respondents find it difficult to cover all expenses with their monthly salary

●        More than 80% exhaust their salary before month-end, 34% before mid-month

●        6 of 10 employees consider EWA a deciding factor for their next job

●        About 63% who did not face unexpected expenses recently also want to use EWA

Bengaluru : “Earned Wage Access in India: The final frontier of employee wellbeing” is a latest report launched today by Refyne, India’s first and largest Earned Wage Access (EWA) solution provider, in partnership with Ernst & Young. The report analyses employee & employer preferences towards EWA and explores the state of workforce’s financial wellbeing, surveying 3,010 employees across India.

Earned Wage Access is a fintech product that enables employees to access a portion of their accrued but unpaid salary any time before payday. EWA is not a loan, therefore does not involve borrowing on the part of the employee and carries no cost to the employer.

Speaking on the launch of the survey, Chitresh Sharma, CEO and Co-Founder, Refyne said, “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. Our latest report ‘Earned Wage Access in India: The final frontier of employee wellbeing’ further iterates the unique economic situation that Indian employees are finding themselves in. For instance, of the employees surveyed, only 38% feel happy and in control of their financial wellbeing, while 59% of respondents who earn more than INR 100,000 per month confirmed falling short of money to cover their expenses with their salary.”

“Employers have a critical role to encourage responsible and disciplined financial behaviour among employees. We believe that EWA can serve as a medium for employees’ financial empowerment and nurture overall financial wellbeing in the long run”, he added.

The following findings offer an overview of financial wellbeing of Indian employees and how the EWA model can help elevate their financial health:

81% respondents felt the need to have more money in hand during Covid-19

Macro trends like inflation, job cuts, low salary hikes, or a once-in-a-century pandemic like Covid-19 contribute to expenses getting ahead of salary, shrinking cashflow for employees. The survey discovered that 81% respondents felt the need to have more money in hand during COVID-19.

Moreover, in the last 6 months, 73% respondents not only faced unexpected expenses but were also unable to meet them with their salary. More than 80% of respondents reported exhausting their salary before month-end, whereas 34% ran out of their pay before mid-month.

62% employees either unhappy or unsure about their financial status

The financial wellbeing of an individual is also determined by their ability to meet planned as well as unexpected expenses. About 62% of respondents surveyed are either unhappy or unsure about their financial status. The respondents attributed the cause of financial instability to multiple factors – 51% said rising expenses, 30% low salary hikes, 25% noted increasing debts, and 18% job insecurity.

The resulting financial stress impacts an individual’s life including work; 81% of respondents said that financial stress impacted them at the workplace, manifesting as lack of motivation, decreased productivity, or higher absenteeism.

41% fall back on loans from friends and family to meet unexpected expenses

Savings have traditionally been the most common way out of financial emergencies. However, Refyne’s research suggests that only 13% of respondents have the potential to put an appreciable amount of their salary into savings. Therefore, while ‘personal savings’ is the most common way of accessing funds to meet an unexpected expense for 47% of respondents, 41% resort to taking loans from family and friends and using credit cards for the same.

Low-income group 6x more likely to fall into debt cycle

Personal savings is a luxury restricted only to the high-income group (earning more than INR 1,00,000 per month). Though the chances of falling into a debt trap drops from 33% among the low-income group (earning less than INR 15,000 per month) to 5% among the high-income group, the potential to save considerably rises from 7% for the low-income group to just 30% for the high-income group.

77% feel positive about EWA, 59% consider it a deciding factor for their next job

The major financial benefits offered to Indian employees have been standardized over the years, prompting an innovative solution like EWA to emerge as a popular product in this space.While 77% of respondents feel positive about this concept and are ready to evaluate its usage, 28% said they would use an EWA product. Notably, 59% of respondents would consider EWA as a deciding factor for their next job.

63% who have not faced unexpected expenses in the last 6 months are also interested in EWA. The report further discovered that the highest interest for EWA exists among the millennial employees with 77% wanting to explore it.

Nearly 4 in 10 believe they’ll be able to better manage unexpected expenses with EWA

Employees feel that EWA will help them with more liquidity to manage unexpected expenses, investment planning and improve their financial wellbeing. 38% or nearly 4 in 10 respondents said they believe EWA will help them feel confident in managing unexpected expenses, and 34% said it would help them invest or save more regularly.

43% respondents using EWA covered expenses with their salary compared with only 21% non-EWA users

The report found that employees who use EWA are more financially stable among respondents. 43% of respondents using EWA are able to cover all expenses through their monthly salary in comparison to 21% of the respondents not using EWA. Moreover, 1 in every 2 employees using EWA feel happy and positive about their financial situation compared with 1 in every 3 employees who are not using EWA.