The youngest segment of our workforce is in a tough spot. They entered the workforce (many with college loans) during a time of rising inflation and housing costs. It is no surprise that Gen Z (Ages 18-26) is facing ever-growing mounting debt. Between 2021-2023, research shows that Gen Zers saw their overall debt burden rise 179%, the biggest change of any generation during that period. By way of comparison, Millennials saw a rise of only 88% during the same period.
According to EY’s Gen Z Segmentation study, more than half of Gen Z workers (52%) say they are concerned about not having enough money. A recent report also shows that 52% of Gen Z has to borrow money to make ends meet.
With the continued rise of the gig economy, many are turning to apps like DoorDash, Uber, Fiverr, and others to make ends meet. Almost half (46%) of Gen Zs are pulling double duty and currently have either a full- or part-time job in addition to their main one, a Deloitte survey shows. A study from the Upwork Research Institute showed that 52% of all Gen Zers and 44% of all millennials freelanced in 2023.
A popular byproduct of the gig economy is flexibility. Employees are empowered to work- and get paid- when, where, and how they want. Many gig jobs enable employees to turn work into immediate cash, with access to pay on a daily basis. Not having to wait until “payday” provides workers with the critical liquidity needed to pay bills on time, and the flexibility to match the timing of their spending to their needs and preferences. Going back to a traditional 9-5 schedule and pay cycle is less appealing to workers who have had a taste of what this freedom looks like.
People juggling multiple jobs face a conundrum: urgent needs can mean choosing between going to the job you love and putting dinner on the table tonight. According to a new survey from Harris Poll and DailyPay, about 3 in 4 Gen Z hourly workers like or love their job. A good amount of those polled are driven by a sense of accomplishment and working toward career goals.
But, just like money can’t buy love, loving your job won’t pay the bills either, not when they are due tomorrow and payday is next week. This leaves workers with no choice but to turn to alternatives like gig work when they’re in a crunch. When a bill is due tomorrow, workers may have no choice but to call in sick or miss a shift in favor of the more immediate payoff of a quick gig. Workers who need access to cash today have more options than ever before, options that may require them to miss work or moonlight. Rising absenteeism has a negative impact on the consistency and quality of service a company is providing.
Forward-thinking employers are leveraging advancements in work technology to bring workplaces into the new age of flexibility.
The employer-sponsored benefit of earned wage access empowers employees with additional choices and control over their earned pay at the end of every shift. This allows them to pay bills, spend, save, or invest on their own schedule. These employees are marrying the job they love with all the best parts of gig work. It’s the best of both worlds, and a win-win for the employer.
Gen Z employees came of age in an “in-demand world.” Waiting for the pay they have already earned to hit their bank account does not align with their needs or expectations for how the working world should work. A recent DailyPay and Harris Poll survey notes that 8 in 10 (81%) of Gen Z hourly workers agree, and say having on-demand pay (or earned wage access) would help them pay bills on time. Meeting employees where they are benefits employers in recruiting and retention, with earned wage access keeping employees coming to work more consistently, increasing the frequency at which they want to work, and sticking around longer.
A study from Arizent/Employee Benefits News and DailyPay shows that 30% of employers say they’ve seen a reduction in employee turnover since implementing earned wage access. In fact, more than half (55%) of employees with earned wage access say they pick up at least one extra shift per month. So instead of calling out sick to get cash that day, they are finding that their best option is the one right in front of them: the job they already have and love, where they can work today and get paid immediately thanks to Earned Wage Access. Your day job can create the same instant gratification of a gig, amplified by a worker’s constantly updating “available balance.” Finishing work for the day is doubly satisfying when you see your balance going up, like a leaderboard for your wallet.
Employers have gone to great lengths and expenses to bring out the best in their employees to make it easier to be great at their jobs. They have invested in programs to help employees’ mental health and their financial well-being. Emerging work tech tools such as earned wage access, help employers to arm their employees with the tools they need to live their best lives and stay ahead of financial responsibility.
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