Several reports from 2017 conclude that anxiety about individual financial wellness is rampant among the majority of today’s workers. With student debt higher than ever, employers are starting to offer various financial wellness programs. Here are a few ideas of simple programs to implement in your company.
The problem of distracted or anxious employees is not new, but recent surveys suggest that the main source of anxiety in the workforce today may not be what employers have traditionally addressed. Several reports from 2017, including the PwC Employee Financial Wellness Survey and the Center for Financial Services Innovation, conclude that anxiety about individual financial wellness is rampant among the majority of today’s workers.
With striking statistics showing anywhere between 53% and 85% of American workers being impacted by these concerns, employers are wondering how to most effectively address this anxiety and ultimately increase productivity and job satisfaction.
Already many employers, particularly mid- and large-size companies, are recognizing this as a serious issue. As Forbes noted last year, the National Business Group on Health and Fidelity Investments reported that 84% of the companies surveyed within that demographic offered some kind of financial wellness program to their employees, up 8% from the prior year. And while the argument is often made that larger companies possess the capital resources to offer a wider array of benefits, today’s reality is that many of these solutions are within the reach of companies of all sizes.
Here are a few of the top trends to consider if you’re looking to implement a financial wellness program:
So, where to start? The most common step many businesses take towards supporting their employees’ financial wellness is offering a 401(k) plan. Among other benefits, a 401(k) program offers the potential for employers to claim tax credits, and therefore the popularity of this approach remains high.
According to sources such as The Washington Post and The Wall Street Journal, we’re seeing the trend of employer matching continue to grow in popularity. Matching refers to the arrangement in which an employer contributes to the retirement savings account of an employee, who makes a similar contribution, usually to a 401(k) plan.
As competition to attract and retain employees gets tougher, this benefit becomes less a matter of if and more of a matter of when. Financial institutions continue to show flexibility in what they’re offering companies as smaller sized firms gain more prominence in the marketplace. Consultations are free and knowledgeable advice is usually just a phone call away. The United States Department of Labor also provides a basic toolkit for businesses who have yet to offer 401(k) options.
Taking 401(k) retirement planning to the next level requires engagement. And while employers should rightfully hesitate in direct financial counseling, plan administrators are typically more than willing to discuss these matters with employees either in group or one-on-one settings. The responsibility of the employer is to help their workforce understand what options are available for their 401(k) arrangements as well as facilitate communication between the money makers and those charged with stewardship of their retirement funds. The simple act of scheduling optional information sessions during the workday can go a long way in showing employees that financial wellness is a true concern and not just a paragraph in the employee welcome packet.
Student loan assistance
Now more than ever, student loan assistance is the at top of many employees’ minds, particularly as the skills millennials bring to a wide variety of companies are held in higher value.
Nationally, seven out of ten 2015 college graduates left school with substantial student loans. The same study found the average national student loan debt to be $30,100– up 4% from just the year before. This is why resources such as Student Loan Hero have gained traction as an offered benefit.
Not only can companies use pre-taxed dollars to help pay employees’ student loans, but many other companies are already beginning to offer these loan forgiveness programs to give them a competitive edge. According to an American Students Assistance Survey, 76% of participants reported that a student loan repayment agreement would be a deciding or contributing factor to accepting a job.
Society for Human Resource Management suggests that this financial wellness benefit may both increase productivity and reduce stress. On top of it all, resources exist to set up the benefit easily and efficiently for most companies.
A diverse workforce means a diverse amount of financial concerns beyond just student loan anxiety. Recognizing this, many companies have turned to third parties to provide financial education services for their employees. Often times, organizations can utilize pre-existing partnerships with their financial institutions, who are beginning to offer these classes.
Alternatively, some companies have turned to private financial advisors who possess the expertise to provide advice and support. The result is a highly personalized approach to financial counseling that can address individual concerns that sweeping retirement and student loan programs may not cover.
Considerations for implementing a financial wellness program
Regardless of the focus on student loan forgiveness or individual financial wellness, certain key ideas should be adopted by a company in order to ensure success at any level. CFSI states that it’s essential that the company understand the need for this benefit both by management teams and senior leadership. Another crucial aspect is keeping a pulse on employees regarding their specific financial needs and concerns.
A workforce that consists primarily of millennials will most certainly have different financial goals, desires, and anxieties than a multi-generation workforce and understanding the company demographics at a financial level is critical for success. The CFSI also points out that continued engagement, visible measurement, and a management-wide commitment to improvement were all equally essential in implementing an effective financial wellness program.
Most importantly, employers should find a way to embrace the challenge of developing a financial wellness strategy. Research suggests that anxiety about money matters only increases if left unaddressed. The opportunity to offer support solutions by your company will not only keep you up with trends but may be essential in the competition for attracting and retaining quality employees.
Want more benefit ideas? Check out: Employee Benefits: Here’s what Top Talent Wants