⏰ Est. reading time: 5 mins

💡 What you’ll learn:

• Why today's clinicians are asking for pay advances
• Drawbacks of traditional pay advances
• How earned wage access differs from a pay advance

For many healthcare staffing firms, the concept of offering pay advances is nothing new. A clinician will ask for an advance on their earnings to cover their bills or an unexpected expense. Yet while pay advances can provide quick relief for financial needs, they can also come with strings attached—both for workers and your business. 

Let’s break down what pay advances are and some different scenarios where a clinician may request one. Then, we’ll delve into the alternatives to pay advances (like same-day pay or EWA) that can actually go farther in supporting your clinicians and your business.

3 Real-World Examples of Why a Clinician Might Ask for a Pay Advance

The travel nurse with upfront costs 

While travel nursing can offer clinicians more flexibility in their schedules or lifestyles, it often leaves them with additional logistics to handle themselves. Even before starting their contract, travel nurses often need to relocate to a new city or state on their own, which can mean footing the bill for some upfront costs. These may include: 

• Airfare or gas for long-distance trips
• Hotel stays during the move
• Moving expenses, including moving trucks or companies
• Tolls, meals, or other travel expenses
• Uniforms or new scrubs

These costs can add up quickly, and not every clinician will have the funds needed to cover these expenses before their first paycheck. They might ask for a pay advance to help cover these essential relocation costs. 

The recent grad just starting out

A nurse who is just starting out in their career might still be paying off student loan debt or grappling with first-time living expenses as they get their own place. They might not make as much money as an experienced clinician, and delays in payment could cause unnecessary financial stress. 

Even if a nurse does make a competitive wage, the current economic situation means that many Americans struggle with financial insecurity. According to recent statistics, roughly half of Americans who make $100k or more a year are still living paycheck to paycheck.

The nurse with gaps between assignments

A nurse dealing with payroll gaps may have had a longer gap between roles or contracts and is now catching up on a few weeks’ worth of bills. When a nurse begins a new assignment, it might be 2-4 weeks before their first paycheck. Even in travel nursing, where pay may be weekly, it can take a few weeks to get fully set up with direct deposit or other options. During that time, clinicians still need to pay their rent or past due bills. 

When nurses experience delays in payment like this, it can further exacerbate their precarious financial situation, causing undue stress. While they’re waiting for their first paycheck, they hope for a pay advance to help cover their essential living expenses. 

Fast Pay Is Crucial…But How You Deliver Fast Pay Matters

It’s clear from these examples that fast payments are crucial for today’s healthcare worker. Whether they’re in travel nursing, per diem, or other fields, being able to deliver timely payments can make a clinician feel valued, help them avoid financial pitfalls, and keep them loyal to your firm.

But here’s something you might not expect to hear: the way you deliver those payments matters. 

In addition to being difficult for many organizations to offer, pay advances can come with some significant drawbacks for both the clinician and your business. 

Drawbacks of Pay Advances

Extra administrative burden

Especially if your system isn’t built to handle these types of requests, having to manage pay advances places additional burden on your business, leading to additional payroll processes and steps to accommodate the ask. It may require overnighting a check (which can be costly, too), dealing with ACH deadlines, or any other off-cycle payment hiccups. There’s also additional administrative work to make sure the advance is repaid, leading to potential worker or payroll disputes.

Piles on unnecessary fees

When employees are charged fees or interest on the advances they take, it doesn’t actually solve their financial insecurity. Instead, it can push them further into a cycle of debt. 

Lowers morale

Instead of offering employees a benefit that shows you care, pay advances have the capacity to actually lower morale. Let’s say a nurse starts a new assignment and needs a pay advance for one of the reasons listed above. They may be temporarily pleased or relieved, but when they realize they then incur fees or interest for the ask, resentment might set in. 

Better Alternatives to Advances: Fast, Flexible Pay

It’s clear that clinicians want and deserve faster access to pay. But it’s also clear that pay advances aren’t an ideal solution for most businesses. Other options can deliver financial peace of mind to clinicians without putting them in a cycle of debt or requiring extra legwork on your part.

Earned wage access

Earned wage access may sound similar to a pay advance, but they are two separate concepts. Earned wage access (EWA) is when employees have the option to request part of their earnings ahead of time—typically up to 50%. This is money they have already earned by hours worked, and it does not come with interest. 

With Branch’s EWA, employees can request access to their earnings ahead of payday, and that amount is simply deducted from the following paycheck. There are no fees or interest to take an advance on what they’ve already earned.

Real-time payments

Offering same-day pay also has the power to change your clinicians’ lives. Available for both W-2 and 1099 workers, Branch allows you to pay clinicians on a faster pay cadence that works for you: whether that’s right after each shift, same-day, or multiple times a week. Workers can get paid right after an approved job or shift.

You can also send off-cycle payments with the push of a button, meaning that per diem pay, relocation stipends, and other payments can be streamlined. 

This type of fast, flexible pay means there aren’t gaps between payments, because workers can access their wages as soon as they’ve earned them. It allows your clinicians peace of mind while also streamlining processes for your payroll team. 

Just ask Tri-State Nursing, who switched to Branch to offer real-time payments to clinicians. Trisha Norris, Payroll Clerk for Tri-State, noted how beneficial it’s been to send payments with the push of a button; they chose to process payments every two hours.

“It’s been great for our temps, because now they don’t have to wait […] to be paid. Some of them rely on these fast payments for gas money to get to their next job; being able to offer them real-time payments is crucial.” -Trisha Norris

Happier Clinicians. Happier Clients. 

When you offer fast, flexible payment solutions like earned wage access or real-time payments, you not only offer a meaningful benefit to clinicians, but you have the potential to boost retention and engagement for your clients. 

(Check out this case study from Quality Clinicians about how offering Branch helped them cut down on no-shows.)

If you’ve been offering pay advances—or thinking about implementing them in the future—we invite you to learn more about Branch and the no-cost alternatives we have to offer. 

Learn more about Branch for healthcare

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