Despite rising employment and hiring, the average American worker is still struggling (and for many, the great recession of 2008 never really ended). Recent reports suggest more than a third of Americans cannot pay their bills on time and have related signs of financial vulnerability, to the point where some full-time employees are working second jobs to make ends meet.
It’s no surprise that according to the latest benefits trends, financial planning resources are ranking highly among employee-sought benefits—and employers are recognizing that. They’re also observing that their employees’ financial stress can lead to underuse or reduction of retirement/savings funds, as well as rising costs in everything from health claims to absenteeism.
While health benefits typically get the most attention in terms of awareness, education, and available resources, the financial category is owed the same consideration. Here are some tips for employers to encourage financial wellness this year:
Identify the pain points causing financial stress
What are those major financial problems that are preventing full use of the benefits you provide? For benefits teams who want a deeper dive on what their employees care about, pulse surveys can be a great tool to do so.
Understanding the personal goals across your workforce will help you create more relevant and tailored financial programs. Plus, you’ll gain more insight into the barriers people are facing in using benefits to address their pain points.
Here are just some of the challenges your employees might be facing:
- Rising student debt: With the typical student borrower taking out $6,600 in a single year, U.S. college students are averaging $22,000 in debt by graduation, according to the National Center for Education Statistics. Employers have seen recent incentives to offer student-loan benefits from an affordability perspective, and even better, these benefits appear to be an important retention tool. And student-loan repayment support isn’t just a benefit for twenty- and thirty-something workers—the number of workers taking student debt into retirement is growing, too.
- Caregiving costs: Companies can lose significant employee productivity due to child or elder-care emergencies. Companies like Starbucks are responding to this by launching new programs of backup care benefits for childcare and eldercare. Without programs like these, many employees are not only having to spend extra funds on such care, they’re likely to use sick time for care emergencies, leaving them in a bind when they’re actually sick themselves.
- Commuting/residential cost headaches: A recent study noted that one in four American workers have left a job due to a pricey commute. The rising cost of living near major urban employment areas is making the term “super commuters” gain notoriety. What might be the solution? Workplace flexibility options in terms of expense support for scheduling and commuting.
Create flexible opportunities for counseling and training
In addition to the aforementioned challenges, financial literacy is a widespread problem. No matter how well educated both your entry-level and experienced hires may be, their levels of financial knowledge can vary—which in turn, can affect their ability to manage said finances and financial benefits. This can be especially hard to address when so many different financial needs exist in your workforce.
As a result, more employers have begun budgeting for tailored financial-counseling services. Some programs are specifically linked to increasing retirement contributions, while others may be related to buying a home or managing student-loan debt. It’s important to have a variety of financial goals and priorities in mind, because everyone has unique challenges and circumstances.
For instance, if a worker is living paycheck to paycheck, encouragement to direct funds to their 401(k) might not resonate. Similarly, an employee struggling to pay off their student loans may need a different course of action than one preparing to send their kids to college.
Ensure your programs are flexible so that any one of your employees can feel comfortable attending and confident they’ll get the information they need.
Little nudges can go beyond benefits and toward real learning
You’ve heard us talk about nudges before. When it comes to driving people toward better benefits usage, we send relevant messages (little nudges) at the right moments to inspire life-changing action—and the same approach can be used to empower learning.
Big data could help determine which financial resources are relevant to which people, based on their circumstances. For example, you could use our digital notification center to reach a targeted group of employees about an upcoming financial-wellness webinar that’s specifically applicable to them (like an educational overview of the home-buying process).
Learning what financial stress means for each individual is extremely valuable, because it allows you the opportunity to offer real assistance that can help employees for a lifetime. Such knowledge goes beyond a paycheck and builds that loyalty that lets organizations thrive—and enables financially healthier employees.