How to improve employee financial wellness
COVID-19 has accelerated the importance of providing tailored financial benefits to employees.
From healthcare costs to emergency savings, the COVID-19 pandemic has highlighted the challenge facing HR to find cost-effective ways to help employees with the financial hardships they face.
But after the pandemic, there is a real opportunity for employers to help their employees recover from some of the economic impact of last year, Purchasing Power’s Mike Wilbert said at the virtual Health & Benefits Leadership Conference recently.
Wilbert, chief revenue officer for the voluntary financial assistance provider, highlighted some “unfavorable” stats on employee finances found in the soon-to-be-released survey data from Purchasing Power. Specifically: 44% of respondents say they are more or slightly worse off now than they were before the pandemic and 38% say they had to make some changes to their spending habits.
Despite the daunting statistics, employers who set up programs to help reap rewards, Wilbert said. In fact, three in four workers say they are more likely to stay with their employer when they are offered more financial benefits, he said.
“I believe in the past, employees have not cared so much, or not at all, about financial welfare and support from their employers,” he said. “That has changed dramatically lately.”
So far, however, few employers have been listening. According to the company, in September only 20% of employers said they would add new financial wellness perks in the near future.
See also: The $ 400 Problem: Improving Employee Financial Wellbeing
“There’s an interruption,” said Wilbert. Employees say they will stay if they receive these perks, but at least in late 2020 employers say they are not seriously considering adding these perks.
For employers looking to help improve the financial wellbeing of their employees, several voluntary benefits can have an effect, even if they are small.
“The big thing is breaking the paycheck-to-paycheck cycle,” he said. “For low-income earners – most earn less than $ 70,000 after tax – the vast majority of their expenses exceed their monthly income, resulting in this paycheck-to-paycheck cycle.”
Some examples are:
- Low-Interest Installment Loans: These help employees avoid payday loans and high-interest credit cards.
- Deductible Financing: These low-interest programs are particularly attractive given the increasing popularity of health insurances with high deductibles and can cover the deductible and can be repaid through wage deductions.
- Employee purchasing programs: These give employees access to products and services through payroll deductions.
- Student Loan Repayment Programs: These programs can help employers to repay loans or help workers find ways to refinance that debt.
“The impact of COVID-19 on employees’ lives and their finances has really shown the value of volunteering because there are so many different needs across all of the different demographics a typical employer has,” said Wilbert. “By offering a range of voluntary benefits, employers can enable employees to tailor their benefits to their specific needs.”
He advised working with service brokers to identify and address the specific needs of your employees. And don’t forget to tell the workers about it once they’re in place.
“Ultimately, we need to communicate these benefits as often as possible,” said Wilbert. “The more we can communicate these benefits and how they are used, the greater the likelihood that they will be used by our employees who need them.”
Conference sessions are available on request through June 11th. Sign up here if you haven’t already. Click here to view this entire session.
Nick Otto is Senior Digital Editor at HRE. He is a professional communicator with more than a decade of proven track record in newspaper and specialist publishing. He has spent the past five years covering employee benefits and holds a bachelor’s degree from the University of Florida. He can be reached at [email protected] or follow him on Twitter @Ottografs.