Do employers have a responsibility for the financial well-being of their employees?
Remarkably, more employers (59%) than employees (50%) say yes to this question, according to MetLife’s 2018 U.S. Employee Benefits Trends Study. Even so, only 18% of companies currently offer financial wellness programs, workshops and tools to their employees.
This dearth of resources is about to end as 67% of companies plan to expand their well-being initiatives over the next three to five years to address non-physical aspects of well-being such as financial health.
In light of this growing focus on employees’ financial wellness, here are five voluntary benefits set to trend upward in 2019 and beyond:
- Financial education resources, including guidance by professionals. Most employees want to make their own financial decisions—but they want to be better educated about finances in general and they want at least some counsel from experts. This was clearly validated by PwC’s 2018 Financial Wellness Survey of full-time U.S. employees. It asked participants which benefit they would most like their employer to add, and their top response was a financial wellness benefit with access to unbiased counselors. Be sure the resources you offer address “the basics” such as debt counseling, budgeting and retirement planning. Consider using a variety of educational channels including online tools and resources, onsite workshops and seminars, and phone consultations with financial coaches. If you want to go beyond the basics, customized financial action plans and resources are excellent options.
- Student loan repayment benefits. These benefits (including debt refinancing programs and employer contributions to loan balances) will be especially popular among companies looking to attract younger workers and recent graduates. But, as a recent SHRM article pointed out, it’s not just youngsters who owe on student loans. In the U.S., more than 44 million people collectively owe $1.5 trillion in student loans.
- Employee discount programs. A high-quality discount program gives employees access to national and local discounts from a variety of trusted brands, helping them save money on major purchases (a home, a car, vacations, etc.) as well as on everyday items (groceries, clothing, health club and gym memberships, school supplies, restaurants, and more). The best programs also help reduce employees’ child care and senior care expenses, which many families experience simultaneously.
- Installment loans and credit. These voluntary benefit offerings keep employees from making bad decisions such as taking out cash advances on their credit cards or taking payday loans when they face unexpected medical expenses, emergency home repairs, and the like. By providing them with low-interest loans they can pay off in reasonable installments or giving them access to credit at a reasonable rate, employers can forge strong bonds with workers and earn greater loyalty.
- Life event financial support. Another key way to help employees is to provide them with financial tools related to major life events— for example preparing for a baby, buying a new home, sending a child to college, or supporting an aging loved one. These life events are some of the most stressful your employees will ever face, and they represent significant money management challenges. Helping employees resolve them is a great way to raise loyalty and engagement levels.
Why Employees’ Financial Wellness Matters
The majority of U.S. workers (54%, in fact) are stressed about their finances. So offering financial wellness benefits could give you a decided edge in attracting and retaining talent. Indeed, the PwC Survey found that 68% of Gen X workers, 67% of Millennials and 50% of Baby Boomers are more likely to be attracted to another company that cares more about their financial well-being.
Talent attraction and retention aren’t the only business benefits of helping employees improve their financial health. As the PwC Survey report states: “Our research is showing that financial stressors are not only negatively impacting employees, but are costing employers. Stressed employees are found to be less productive, take more time off to deal with financial matters, are more likely to leave the company for higher compensation, and are more likely to cite health issues caused by financial stress. These findings evidence a direct correlation between an employee’s financial well-being and a company’s bottom line.” In short, helping employees remove financial stressors is every bit as good for your business as it is for your people.
The fact is, employers are already adopting a more holistic view of financial wellness. According to last year’s Health and Well-Being Survey, conducted by Fidelity Investments and the National Business Group on Health (NBGH), 90% of employers now consider financial well-being to be one of the top three components of an employee’s overall well-being (physical and emotional health are the other two).
But as the MetLife study makes clear, this altered outlook hasn’t yet translated into widely available resources for employees. If you act soon to implement financial wellness benefits, 2019 could be a breakout year for your talent strategy and your employment brand.
As always, if you’d like to learn more about implementing financial wellness benefits or other results-oriented work-life programs, contact us here or call us at 866-675-3751.