6 Ways to Acquire Top Talent With Employee Financial Wellness
How much should an employer be involved in employee financial wellness? Reducing worker financial worries can reduce stress in the long run — and increase productivity.
The number one stressor for employees is typically money. In a study by the American Psychological Association, 64% of Americans stated that money was a significant source of stress, and 38% have less than $1,000 in savings.
In other words, financial well-being is a huge problem for employees across industries. And when they bring that stress into the workplace, productivity and motivation are affected.
But it’s not just current employees who struggle to manage their finances. Almost 70% of job candidates scan job descriptions for salary information, and 63% care about benefits.
That’s why many HR professionals who want to acquire top talent and retain their look to crafting aggressive benefits packages. And employee financial wellness benefits can go a long way in providing a competitive edge for companies looking to stand out from the crowd.
64% of Americans stated that money was a significant source of stress, and 38% have less than $1,000 in savings.
6 ways to make a difference in employee financial wellness
There are several ways that an employer can contribute to their employees’ financial wellness.
To build the program that makes the most sense for your organization, you may first want to send an employee financial wellness survey to gauge worker needs and expectations. For example, if you already offer solid salaries and benefits, you may only need to provide optional financial planning services.
After reviewing your survey results, you can use these 6 potential options to help employees improve their financial well-being and engagement.
1. Financial planning benefits
4 in every 7 Americans are financially illiterate and cannot manage their own finances.
While often underestimated, financial planning benefits are one of the best ways to promote financial wellbeing. According to one study, only 24% of Millennials understand basic financial planning concepts.
But it’s not just the younger generation who lack financial confidence. Another report revealed that 4 in every 7 Americans are financially illiterate and cannot manage their own finances. What’s why even if you are offering a competitive salary with a robust benefits package, some employees still have difficulty managing their financial situation.
Financial planning benefits organizations like Origin highlight the fact that companies lose approximately $1,900 per financially stressed employee due to lost productivity.
With financial planning options, employees can work alongside a finance expert to optimize their budget, strategize debt reduction, plan for retirement, and improve their overall financial stability through financial planning offerings.
2. A more substantial (401)k strategy
For decades, the staple of financial wellness has been retirement plans. Employers primarily match contributions to an employee’s 401(k) plan. And this is still a strong benefit in its own right. As Americans are saving less, they may need more help to meet their retirement saving goals.
“One of the best things an employer can do for their employees is investing in a good 401(k) plan,” says Jon Green, founder of the registered investment advisory firm, Encompass Advisors.
But what makes a good 401(k)? According to Green, a good 401(k) plan has several options for employees to invest in. This type of plan tends to be a bit more expensive, but a better diversified 401(k) gives employees more flexibility.
In lieu of a highly-diversified plan, employers can also:
- Contribute to their employees’ 401(k) through matching
- Allow employees to qualify for their plan quickly
- Provide short vesting periods.
While vesting or long-qualification periods are often used to lock in employees, your workers might feel ripped off if they have to leave the company early due to unexpected events. This can lead to a dent in reputation and a lower talent pool in the long term.
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3. Indirect financial benefits
Some organizations also offer additional benefits that can indirectly affect an employee’s financial stability. The cost of fertility treatments, mental health appointments, and higher education all strain personal budgets and can rapidly diminish savings. By providing a college scholarship, daycare, subsidized mental health services, and other similar services, employers can reduce financial stress for their workers.
4. Flexible spending plans
A flexible spending plan for benefits can take the burden of choice from the HR department.
“Providing flexible plans is effective because not every employee has the same needs. This way, they can choose which benefits are more relevant to them,” says Green.
A fresh out of college worker will probably want student loan repayments, but a single mother with two children will hope for a daycare option.
In this strategy, the employer doesn’t have to pay for everything. But employees still get relevant benefits that can help them maintain financial stability.
5. Quality and relevant insurance
Finally, providing inclusive and quality insurance packages can dramatically reduce financial stress. Whether you decide to take on an High Deductible Health Plan (HDHP) or a Health Savings Account (HSA), or any other healthcare subsidy, providing financial support for healthcare can significantly help an employee retain financial stability.
Considering the fact that nearly half of Americans have admitted to skipping medical checkups and treatments due to cost, any additional assistance with healthcare can make a significant difference in employee health, financial stability, and engagement.
Of course, health insurance isn’t the only contender. Disability insurance can be just as beneficial, especially for workers in potentially dangerous environments.
“If someone is injured on the job and potentially can’t work again, life insurance isn’t going to cover that loss,” says Green. “Disability insurance can really make a difference to an employee’s financial wellbeing and reduce stress, even if they never use it.”
6. Financial literacy workshops
If you can’t find the budget invest in a full financial wellness benefit like regular financial planning or student loan support, it can help to start out with one-off financial literacy seminars and workshops. For example, you may ask a tax expert to give advice or bring in a fiduciary to help employees learn to organize their assets and inheritance plans.
Learn what your employees care about
Whether a successful financial wellness program involves student debt matching, retirement planning, or additional health insurance supplements, the most important thing is that your program works for your workforce.
But before doing anything, it can help to understand your employee’s well-being. And we have a checklist for that. Learn more tools to boost employee engagement, flexible work arrangements, and how to drive employee motivation in this guide for HR professionals.
