Why Gen Z Won’t Wait for a Scheduled PayDay

By Ryland Costello and Samantha Shepherd

Remember the days when we would wait until a designated time for our favorite TV show to come on? Or how about when we had to call a taxi service to schedule a ride? Or fill out a check, buy a stamp, and mail a letter just to pay a bill. Well, if you are a member of Gen Z, you likely have no idea what I’m talking about. Because if you are in this age demographic, you live in an on-demand virtual world that includes everything from how you eat to how you pay bills. You would be challenged to identify an area of your life where advancements in technology have not eliminated useless friction or needless waiting. 

Think about how at the touch of a button we can do just about anything to make our lives better or easier. Medical advice? Check. Buy concert tickets? Of course. Grocery shopping? Yup. What about an obvious one, accessing your earned pay? I mean, it’s your money… you’ve already earned it. And without access to it, you might not be able to pay bills on time. 

Many forward-thinking employers have already recognized the importance of meeting the needs and expectations of their employees, in particular Gen Z, by offering earned wage access. In fact, a recent ADP survey revealed that over 8 in 10 (82%) of Gen Z and Millennial workers believe that they should have more of a say in deciding when they access their pay.

Having choice and control over your earned pay is not just a ‘nice to have’ for the youngest members of our workforce; It’s essential. The data shows the economic challenges Gen Z is facing. For example, according to data highlighted by CNN from the Federal Reserve Bank of New York, about one in seven (15.3%) Gen Zers credit card usershave maxed out their credit cards. Not surprisingly, Gen Zers are more delinquent on their bills than they’ve been in three years, according to the New York Fed.

With the rise in inflation and uncertain economic times, many Gen Zers are even staying at home to live with their families. Fifty-four percent of 18-25-year-olds have chosen to live with their parents given the current economic climate, according to research from the Harris Poll and DailyPay. 

However, with earned wage access, Gen Z’ers are empowered to take control of their finances and pay bills on time, without having to wait for a scheduled payday. In fact, over 8 in 10 Gen Z hourly workers note having earned wage access helps/would help them pay bills on time. Notably, 74% say earned wage access would help them avoid using payday loans and the same proportion avoid paying late fees. 

A report from ResumeLab shows that 83% of Gen Z workers consider themselves to be job hoppers. By meeting the needs of Gen Z workers, employers can better position themselves in hiring and retaining their younger employees, which is critical in staying competitive with a continued tight job market for many industries. Financial wellness benefits such as earned wage access can play a role. 

For example, an ADP report reveals that 75% of employees, in all demos, say that the availability of earned wage access would influence their acceptance of a job offer. In fact, a recent ADP Webinar revealed how employers are leveraging EWA to boost recruiting and retention and their results: Nearly double the number of applications. Research from DailyPay/Arizent also shows 30%of employers say they’ve seen a reduction in employee turnover since implementing earned wage access. 

A recent ADP Market Pulse survey of over 1,500 business leaders and HR decision makers found 61% of mid-size businesses believe offering earned wage access is important to attract new employees. 63% believe it is important to offer this benefit to retain new employees as well. 

Netflix, Lyft, Uber Eats, and Expedia and prime examples of how technology innovation has disrupted nearly every facet of our lives so we can do things quicker, easier, and often cheaper. For Gen Z in particular, there is no going back to the antiquated, less efficient ways things were once done. This is now true for the way they are paid.

With each passing day, the Gen-Z employee is increasing as a percentage of the overall workforce. Currently, they make up over 1 in 4  global workers. Just like earned wage access, they are not going away, but instead will someday represent the majority of US employees.  Forward-thinking employers will recognize that earned wage access will not be a choice – it will be the standard way we are paid.