Many Kenyan households are struggling to make ends meet on monthly salaries, as the cost of living continues to rise at a pace that far outstrips income growth.
Faced with mounting financial pressure, some have turned in desperation to digital lenders and other third-party sources that offer quick loans, but at steep interest rates. These predatory lending practices often trap borrowers in cycles of debt, increasing stress levels and undermining productivity at work.
To address this challenge, companies in more advanced economies are rethinking how and when salaries are paid. Rather than waiting for the end of the month, employers are leveraging technology to calculate wages earned up to a given date and allow employees to access that income on demand.
This model, enabled by the integration of payroll systems with human resource management software, has proven beneficial for both employees and employers.
For workers, it means timely access to funds, reduced financial stress, and improved stability. For companies, it translates to higher workforce productivity, improved employee retention, and the development of more resilient and engaged teams.
A study by Harvard University found that companies offering earned wage access reduced employee attrition by 23 percent, an outcome that underscores the business case for on-demand pay.
To effectively harness human capital for growth, business leaders must look beyond traditional practices and embrace technology as a catalyst for workforce performance and engagement.
One such technology-driven solution is embedded finance, the integration of financial services into non-financial platforms like payroll or HR systems.
Embedded finance can be a powerful tool for supporting employees who are often excluded from conventional financial services, such as blue-collar and contract workers.
In sectors that are labour-intensive and operate on thin margins, employee financial emergencies frequently result in absenteeism, increasing operational costs as roles must be filled temporarily.
By enabling immediate access to earnings, embedded finance helps reduce such disruptions, offering stability for both employees and employers.
As this concept gains momentum globally, recognising its potential and creating favourable policy environments can unlock broader benefits—including enhanced financial inclusion and economic growth.
Stakeholders across both the public and private sectors should also prioritise capacity-building efforts to deepen understanding and facilitate implementation of embedded finance solutions. The future of work lies in how well businesses integrate technology into their core operations.
Organisations that invest in agile, real-time systems today are better positioned to lead tomorrow. When strategically implemented, embedded finance is not just a convenience—it is a transformative asset for sustainable business growth.
The writer is the Regional Vice President, East Africa, SeamlessHR
