For many of today’s employees, financial uncertainty in the wake of Covid-19 has become a major source of stress, affecting their ability to focus, both at work and at home. Several may seek guidance or assistance from employers to reach their short- and long-term financial goals. And, in the “new normal,” proactive employers will be poised to deliver financial wellness initiatives that keep their employees on track for their goals, de-stressed, and better able to concentrate on their day-to-day work.
What Kind of Financial Wellness Support do Employees Seek?
According to Bank of America’s 2020 Workplace Benefits Report, 62% of employers feel "extremely" responsible for their employees' financial wellness, up from only 13% in 2013. That’s a major leap. And, compared to 61% of employees in 2018, only 49% of 2020’s employees rate their financial wellness as “good” or “excellent.” That’s a growing decline.
What’s more, PwC’s most recent Employee Financial Wellness Survey found that nearly 40% of employees have less than $1,000 saved for emergency expenses. And 58% admit they’re stressed about their finances, which is a leading cause of distraction at work.
To help employers tackle this growing source of workplace stress and cater to employees in need, a number of financial wellness tools are available. In fact, 83% of employers believe financial wellness benefits lead to greater productivity in the workplace. But which ones?
Student Loan Paydown
Student loan repayment lets employers help their employees pay down student loan debt through direct payroll contributions. With 54% of younger employees opting for a student loan payment assistance program over a 401(k) plan, and 45 million Americans owing over $1.4 trillion in student loans, it’s obvious why this benefit is becoming so popular. It’s widely used in industries like engineering and tech, where employees are often saddled with hefty undergraduate and graduate student loans.
Childcare benefits are becoming an essential factor for many working parents, especially as pandemic-driven homeschooling and scarcer access to childcare are the new norm. With the right childcare benefits, i.e. on-site daycare, childcare center discounts, paid leave, tuition assistance, flexible work schedules and dependent care assistance programs; workers are freed up to worry less and focus more.
In the face of immediate financial concerns and obligations, many employees forego prioritizing their retirement savings. This is a topic that is important to communicate to all employees, not just those nearing retirement age. Encouraging employees to contribute to the retirement plan will not only be beneficial for their own financial planning but also provide a “vested” interest in the Company’s financial health.
Mortgage assistance programs can help employees move into a new home, refinance an existing home, or assist with the purchase of a second home or investment property. It’s a unique benefit that can help offset financial burdens for employees who may need to downsize to save funds, or acquire more space to accommodate working from home.
Long-Term Care Insurance
Sometimes, health insurance coverage can only take your employees so far. Long-term care insurance can help them prepare for whatever the future holds, whether they face a disability or chronic illness, require elderly care, or need help with routine daily activities down the line. By covering this long-term financial need, it can help employees stay calmer in the present.
Hospital IndemnityHospital indemnity insurance is a supplemental insurance plan designed to pay for hospital admission costs that may not be covered by other insurance. In a time when many employees are uncertain about how their health may be affected, this particular benefit can provide some much-needed assurance. In the event they are sidelined by a major illness, a hospital indemnity benefit can save them serious money.
How Can Employers Effectively Communicate Financial Wellness Benefits?
Getting clear and concise information in front of employees helps them handpick the best financial wellness benefit(s) for their unique situation. Here are a few things to consider when communicating financial wellness initiatives to employees:
Refer to the Right Virtual Tools
Benefits providers love offering handy interactive tools to their participants. Things like student loan payoff calculators, financial planning and budgeting resources, care cost estimates, etc. are right at your employee’s fingertips. Sending instructions for how to access them is an easy way to help them help themselves.
Educate with Easy-to-Understand Information
The easier it is for employees to understand information, the more likely it is for them to actually take action. Instead of handing out complex plan documents and wordy instruction manuals, break benefits instructions down into down bite-sized content and distribute it across well-established communication channels.
Motivate Motivate Motivate
A little encouragement can go a long way. Instead of simply flagging an initiative and moving on, see if you can stay in front of employees and even offer incentives for participating in certain programs. The more they know you’re in their corner, the easier it may be to take that first step toward better financial health.
Offer Resources for Ongoing Support
Offering ongoing support is another crucial way to show your organizational commitment to financial wellness. Let employees know the lines of two-way, face-to-face communication are always open, and allocate dedicated staff to answer questions in person, via telephone, e-mail, text message, chat, or even social media.
Communicate Consistently & Keep Channels UpdatedOn the same thread, being accessible on all levels is key to rolling out a robust financial wellness plan. The employee audience might be deeply segmented, with some preferring e-mail communication, others opting for text, those who check in via intranet and people who prefer a video tutorial or webinar. Communicate the same messages across all channels consistently and keep the content up to date.
When it comes to employee’s financial wellness, HR and mid-level managers have the tools and capacity to create meaningful, positive change. It starts with researching the right programs, continues by constantly assessing what employees need, and is maintained with clear, concise communication across every channel.