What impact does Rain have on businesses?

If you've heard of Earned Wage Access and the ways that it can benefit you, you probably have a few major questions about how it affects your business day-to-day.

As a provider of Earned Wage Access for more than three years, we often hear people ask what impact it will have on their business. The truth is, it has a huge impact and no impact at all. How can it be both?

On one hand, it will improve hiring, help you compete with the gig economy, and reduce turnover as well as improve employee motivation and increase productivity. On the other hand, there will be zero disruption to your payroll, timekeeping, or taxes. 

Positive Impacts of Using Rain

Increase in Job Applications

Employers across different industries that are using Rain have seen an overall increase in job applications. You may be wondering how Rain has any impact on hiring. As an employer using Rain, you can be at the forefront of offering this employee benefit. 

Right now, offering Earned Wage Access to your employees is a competitive advantage. Soon, you'll be behind the curve without it, as your competition grabs the most qualified candidates. 

With Earned Wage Access, you are encouraging applicants because they know they will have access to their earned wages sooner. For applicants that want on-demand pay, offering this benefit through Rain is an additional reason to seek employment somewhere they will have the financial flexibility of Earned Wage Access. 

Competing with the Gig Economy

Much of today's labor market is characterized by short-term contracts and freelance work, rather than long-term roles, due to more flexible payment patterns. 

Offering Earned Wage Access gives you the opportunity to compete with the gig economy by giving your employees the ability to get paid as often as the employee chooses. This can be a huge incentive for an employee that needs money as soon as they start a new job rather than waiting until their first payday. 

Decrease in Employee Turnover

Studies estimate that employee turnover rates for hourly employees can range from 49% for service industry professionals to 150% in quick-service restaurants. 

Offering Earned Wage Access can help employers decrease their turnover rate. Employees are less likely to leave a job that offers Earned Wage Access for one that doesn't offer this benefit, meaning they turnover less frequently. This can save you time and money. 

One of Rain's large clients in the quick-service restaurant industry has seen these results firsthand. 

A study Rain conducted found that after one year, employees at this company who used Rain were 10 times more likely to still be with the company than those who did not use Rain. These employees using Rain were retained at a rate of 71% while employees not using Rain were only retained at 7%. 

Increase in Employee Motivation and Productivity

Employees that have access to their earned wages show greater motivation and productivity. When employees are less stressed about their financial situation, they are less stressed at work, miss fewer shifts, and have an increased interest in picking up additional shifts to access their wages. 

Recent studies conducted by PwC and Kronos Incorporated found that one-third of employees are distracted by finances at work and three-fourths of employees would prefer to work for an employer that offers them financial planning tools.

Promoting financial wellness improves the productivity of your workforce, saves you money in the long run, and helps you motivate your employees. 

No Impact on Your Business

No Change to Payroll or Timekeeping

Rather than replacing your existing payroll and timekeeping systems, Rain partners with them to ensure that implementing Earned Wage Access is painless. Rain will collect limited data that will allow the Rain app to reflect an updated balance of earned wages, without any change to your current payroll system. 

At the end of each pay period, you will reimburse Rain only after you have successfully withheld the funds from the employees' paychecks. This means that Rain will function as a third-party line-item deduction and never interrupt your payroll process. 

No Change in Taxes

When an employee takes a payroll advance from Rain, we function as a third-party service provider NOT as the entity paying the employee's wage. 

You can be assured that the paycheck will go from you to your employees, with only a line-item deduction in between, similar to a garnishment. Rain will always align the timing of our reimbursement with the pay period the employee accessed their funds, and there will be no change in the timing of the tax liability for you or your employees. 

No Legal Obligations

Rain will have no legal impact on you as the employer or on any of your employees. All advances that go from us to an employee are non-recourse. In other words, we will never report any employee to collections. 

If there is a rare case where an employee's paycheck is not sufficient for reimbursement, Rain assumes all liability. This leaves you free of liability for losses. 

Is Earned Wage Access right for you?

When considering Earned Wage Access providers, think about what your business needs and who can offer that to you. Providing this service through Rain will help your business in hiring, retention, and more. 

Connect with a business representative today at contactus@rain.us to explore how Rain can bring you greater benefits by providing your employees peace of mind.