3 Guidelines for Establishing a Financial Wellness Program
The cannabis industry will add 200,000 new workers over the next five years. Keeping the good ones can be a challenge. One of the ways both small and large companies in all industries try to limit turnover is to take care of their employees with benefits that go beyond the paycheck.
While it is legal for cannabis companies to offer employee benefits, they are often overlooked due to their rapid growth and non-corporate culture. This is a mistake. More than half of the larger employers in all industries now offer financial wellbeing Programs to ease the pressure on their employees, while small employers like cannabis companies recognize the problem but have only recently started putting their own programs in place.
The COVID-19 pandemic has exacerbated the financial plight of a significant number of small business workers, who typically earn less than workers in larger companies and are more likely to suffer from cutbacks and layoffs during the pandemic. Pew Research recently found that 44 percent of Americans surveyed believe it will take three years or more to reclaim ground lost during the pandemic. One in ten people have doubts that their finances will ever recover.
Financial wellness programs are as relevant to small cannabis companies as they are to large ones, realizing a return on investment of up to 3.1 percent based on a reduction in employee-related costs for productivity and absenteeism alone. More importantly, many of the services that can be offered under such a program are non-taxing on employers’ resources.
Following a few key guidelines will result in effective strategies that will not only help employees better cope with the causes of financial stress, but will also position companies for future success.
1. Put together a task force made up of key stakeholders with their own interests
This starts with the executives of the HR department and the company pension scheme, but the members of the pension scheme are also essential. The best programs combine ideas from both teams to understand the causes of financial stress and come up with solutions. Maintaining silos only blocks the development of programs that get to the heart of the problem.
2. Carry out employee analyzes in advance so that the solutions are brought to the point
It’s easy to assume that Gen Z employees and millennials are burdened with college loan debt. But how do older Millennials and Gen Xers deal with taking out an initial mortgage loan or refinancing? And which groups are most in need of advice on budgeting, saving and retirement planning? The most effective performance programs are precisely tailored to the specific needs of employees. Employee analyzes provide the insights needed to get there.
Some approaches include:
- Data showing employee usage of current hard and soft benefits such as health insurance, voluntary benefits, sick days, and vacation days can be good indicators of program development.
- Well-structured, confidential employee surveys can identify specific financial health concerns and what type of employer support is most valued.
- Persona analysis is of enormous value, as it creates a far more comprehensive profile of employees than generation segmentation. Improved insights into the needs are obtained by looking at the employee groups not only according to age, but also, for example, according to the length of stay in the workforce and in the company, the level of employment in the company and the patterns of performance loyalty.
3. Find solutions that meet the needs
Putting together a suite of solutions that address the financial pressures employees face doesn’t have to break the bank. Many of them may be hidden, which is a good reason to conduct an examination of what is already in the range of services but has never actually been mentioned. Think about employee support programs (EAPs). These are usually not exhausted, which is a missed opportunity. Financial wellness services such as financial advice are usually part of the EAP’s mix of services. Legal services can be another overlooked voluntary service. They can be pulled out and repackaged under a new program.
The types of services that can be included in a program depend on the employee analysis. Typically, however, needs and services fall into different buckets. These include training courses, which can be online and interactive, or workshops or one-on-one counseling, and employer matching programs such as 401 (k) s and student loan repayment plans.
Other solutions offer financial assistance such as paycheck prepayments that help employees avoid the high rates of payday loan. Many of the most urgently needed services do not cost an employer anything, but just providing access that employees couldn’t get on their own can make a big difference in their financial situation.
With cannabis still considered illegal at the federal level, there are a limited number of benefit insurance companies willing to provide employee benefits to the industry. Working with a power broker specializing in cannabis businesses will be critical to success.
We are emerging from a difficult year that has created new burdens for many Americans and exacerbated existing ones. As we continue the recovery process, cannabis companies have an opportunity to counter the pressures their workers are facing through financial wellness programs. Businesses will find that such programs are win-win for both workers and bottom line.
Daniel Bryant is the founder and president of retirement and personal wealth at Sheridan Road Financial, a division of Hub International. He is also a visiting lecturer, entrepreneur, philanthropist, Iron Man, and author of The Financial Wellness Mandate. He is also the chairman of the Sheridan Road Charitable Foundation and a board member of YPO, The Art Institute of Chicago, Hopkins Center, and Oz Arts.
Heather Garbers, CVBS, is vice president of volunteer benefits and technology at international insurance broker Hub International, where she is responsible for sales and volunteer benefits strategy. She works with clients to develop optimal registration and communication solutions that improve employee understanding and engagement with volunteer plan options.