Great Resignation may lead employers to offer financial wellness perks
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American workers are financially stressed and employers are starting to listen.
Whether it’s a response to the Covid-19 pandemic, the looming loss of employees during the Great Resignation, or something else that’s been brewing for a long time, recent surveys of corporate financial wellness benefits have increased.
This year, 46% of employers in Bank of America’s Workplace Benefits Report said they offer the programs, compared with 40% in 2020. The financial firm surveyed a national sample of 1,363 full-time employees.
Meanwhile, a survey by the Society of Human Resource Management and Morgan Stanley at Work found that 26% of HR professionals said they added benefits or expanded existing benefits to help employees manage their financial stresses since the beginning of Covid-19 .
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That still leaves almost three quarters who didn’t. Still, most employees want the benefits, SHRM and Morgan Stanley found. The survey was conducted in June and included 1,205 human resources professionals, 1,000 working Americans, and 1,000 unemployed Americans.
In addition to more traditional benefits like 401 (k) retirement savings plans, the perks in question include financial coaching, student loan assistance, emergency savings assistance, and financial planning.
Offering these benefits could be critical to recruiting and retaining employees at a time when many workers say they want to quit. A separate survey by the SHRM found that 52% of workers are considering such a move.
“When I look at it from a human resource goal, I want to attract talent, retain talent, and enable people to be their best.” [and] Increase productivity, “said Krystal Barker, head of financial wellness at Morgan Stanley at Work, based in New York, who supports the company with its financial wellness programs.
“Financial wellness has the ability to do all of this.”
For example, a large manufacturing company that works with Morgan Stanley at Work faced a lot of competition for its mid-level executives and was concerned about the loss of employees. The company has put together a financial wellness package that includes individual financial planning.
“Financial wellbeing was a nice bonus,” said Barker. “It is now becoming apparent that this is a must-have advantage.”
Officials at health care provider Northwell Health realized this back in 2018, said Diana Grubard, the company’s director of benefits. And it’s something that helps the company stand out during the current Great Resignation. Financial wellness benefits for Northwell Health’s 77,000 employees were rolled out earlier this year after being delayed by the pandemic.
“Our consistent long-term focus on wellbeing enables us to differentiate ourselves in this environment,” said Grubard. “It’s what we use to attract and retain our talent.”
Doctors perform a liver transplant at North Shore University Hospital in Manhasset, New York. The Northwell Health hospital system provides financial health benefits to its employers.
Northwell Health, which recently made headlines with the layoff of 1,400 unvaccinated employees, offers digital training such as videos or articles, financial webinars, and financial planning that enable employees to meet with professionals individually.
The benefits are clear and outweigh any costs the program incurs, Grubard said.
“Think about how you feel when you are financially stressed and how this leads to anxiety, depression, weight gain and underlying medical conditions, leading to more absenteeism and lower productivity,” she said.
“We need our bedside staff,” she added. “We need them to provide the best possible care for our patients and the community.”
It’s a win-win situation.
Professor at the George Washington University School of Business
The data support this view.
High financial stress workers are twice as likely to be sick when they are not, with 48% of stressed workers being sick compared to 24% of non-stressed workers, a Lockton Retirement Services survey of 613 people across the country found.
Added to this is the time that is spent on personal money matters during working hours. Low-financial workers spend an average of six hours a week at work dealing with financial issues, compared to an hour a week for those with high financial literacy, according to the TIAA Institute-GFLEC Personal Finance Index 2021.
When you multiply the time you spend working on finance by your wages, companies will see the value of a financial education, said Annamaria Lusardi, professor at the George Washington University School of Business and founder and academic director of Global Financial Literacy GWSB Center of Excellence.
“It’s a win-win situation,” she said.
To create a robust financial wellness program, employers need to take a holistic approach that helps not only retirement planning but also helps in building emergency savings, debt management and financial literacy, among other things, she said.
“A good program starts with building blocks,” noted Lusardi, a member of the CNBC Invest in You Financial Wellness Council.
For example, 40% of non-retired adults don’t have enough savings to cover the cost of living for a month, according to the TIAA Institute-GFLEC Personal Finance Index.
Certainly there were financial pressures and fears long before the Covid-19 pandemic. A 2018 study by the Investor Education Foundation of the Financial Industry Regulatory Authority found that 53% of Americans said their finances are unsettling and 44% think discussing their finances is stressful. The pandemic has exacerbated this for many, especially women and people of color.
“After a pandemic, we need to be even more careful about our finances,” said Lusardi. “Most of us really suffered from this pandemic.”
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