How to boost employees’ financial wellness
Financial worry is on the rise among Americans. Employees express slightly greater worries than they did last year about seven financial issues, with significant increases in concern about being able to pay medical costs in the event of a serious illness, according to polling organization Gallup. And, a recent Bankrate survey found that many Americans can’t even come up with $500 for an emergency expenditure. In fact, just 41% of adults would pay an unexpected expense using their savings.
These dire statistics are creating a growing emphasis on employee financial wellness programs. And for employers that don’t have one in place, now is the time to implement one.
Not only will targeting employee financial stress help workers, it will help employers, too. The latest financial wellness survey conducted by PriceWaterhouseCooper indicates that employers could be losing money by way of productivity and profitability due to the money problems weighing on employees’ minds. Employees feeling financial stress are more distracted at work — and may even spend time at work trying to solve their problems. On top of that, employees feeling financial stress are more likely to experience health problems as a result, and call in sick. They could even be driving up employers’ health insurance costs.
For employers who want to tackle these problems, here are some ideas to help employees improve their financial wellness.
Offer classes and workshops. One way to help employees get a handle on their money is to offer classes and workshops about financial concepts. Provide workshops on basic concepts like budgeting and helping employees understand their retirement plans.
Work with Certified Financial Planners and Registered Investment Advisors who can offer unbiased information and provide solid strategies and tips to your workers. Even offering an eight-hour financial management course can go a long way toward providing your employees the tools they need to improve their finances. It’s also possible to provide access to personal financial planning resources so your employees can receive the help they need when navigating their long-term money goals.
Provide free credit monitoring. Some companies include credit monitoring as one of their employee benefits. It’s possible to work with credit bureaus to allow employees access to their credit scores and reports. Providing this benefit, along with workshops and financial planning help, empowers employees to improve their credit.
Consider adding student loan repayment as a benefit. Among millennials and some Gen X employees, student loans are a major source of financial stress. Alleviate some of that by adding an option to put a portion of each paycheck toward student loan repayment. Student loan repayment as a benefit is growing in popularity, and you can attract talented workers by offering it as an incentive.
Add a 529 plan benefit. According to Gallup, 73% of parents with children under the age of 18 worry about the cost of college. While a student loan repayment benefit can help your younger employees feel less stress about their finances, a 529 plan benefit can do the same thing for older Gen X employees and baby boomer employees worried about paying college costs.
Automate enrollment in retirement plans. Rather than wait for your employees to sign up for retirement benefits, automatically enroll them. This encourages them to save for retirement without thinking about it. Automatic enrollment is quickly becoming the norm in 401(k) plans, with 67% of plans offering it. The most common auto-enrollment rate is still 3%, but recently we have seen a large movement toward 4%.
Also, make it easy for your employees to join your plan or increase the amount they withhold from each paycheck. Studies show that the faster an employee is able to enroll in your plan, the more likely they are to enroll and stay. Shorten your eligibility period and make entry more frequent. Once they see how their retirement accounts are growing, employees are less likely to be stressed about the future.