In recent years financial wellbeing has become a hot topic in strategic planning as employers become increasing aware of the impact of financial security on chronic stress their employees’ lives and work performance. A report conducted by the American Psychological Association (APA) states, “In fact, regardless of the economic climate, money has consistently topped Americans’ list of stressors since the first Stress in America™ survey in 2007”. The same report found that 72 percent of adults feel stressed about money at least some of the time and nearly one-third of Americans (32 percent) say that their finances prevent them from living a healthy lifestyle.
Employers are taking action to avoid detrimental business outcomes resulting from employee financial distress. After examining the research and best practices CBIZ Wellbeing Solutions has developed recommendations for incorporating employee financial wellbeing into your wellbeing strategy:
1) Leave assumptions about your workforce at the door: Recent survey data suggests that the desire for financial planning resources spans employees of all generations, from baby boomers to recent college graduates. A 2015 survey published by Quantum Workplace and Limeade found nearly 40 percent of employees younger than 25 said they wanted their employer to provide financial planning benefits. Don’t hinder your company’s ability to recruit the top young talent by believing in out dated public notions or assuming you already know what they want.
2) Conduct an audit of current financial wellbeing resources: Typically, employers have access to a variety of financial education tools through existing agreements with benefits providers (i.e., 401k, EAP, and medical providers). Speak with your partners to be sure you are aware of everything available for your workforce. Advertise these resources throughout the year to leverage your relationship with current benefit providers.
3) Offer a core benefits package that helps to mitigate financial exposure to insurable risk: Industry-leading companies not only offer, but educate employees on benefits such as life, disability, critical illness, accident and other insurance options. This helps to protect employees from the negative financial impact that can occur as a result of premature death, loss of income due to illness or injury and out-of-pocket medical and non-medical expenses. Alongside comprehensive health insurance and retirement plan benefits, employers who provide a robust benefits package report a competitive advantage in recruiting and retaining employees.
4) Maximizing employees’ retirement income should be a priority when designing a company’s retirement plan: Recent reports estimate Americans leave approximately 24 billion unclaimed 401k company match dollars on the table each year. Employers should embrace the mindset of a shared responsibility in ensuring their employees are optimizing their potential retirement income. Most plan administrators provide access to features such as automatic escalation of contributions, default investment options and investment calculators to help employees with retirement planning.
5) Utilize the power of peer-to-peer support: Depending on the industry, many employees have limited financial education. For advice on financial decisions they often turn to friends with more experience. For example, prior to purchasing a home a first time home buyer tends to ask home-owning friends and family for guidance before reaching out to a professional. Employers should leverage the exchange of knowledge through social networks to their advantage. Offer financial skills training and counseling with professionals in a classroom format. Not only does this provide employers the opportunity to connect with their population at the group level, it equips employees with the knowledge and resources they’ll need to provide sound advice.
By adopting these best practices and providing resources that empower employees to take control of their financial security, employers can help reduce their exposure to the negative business outcomes financially distressed employees and send a message of care and concern to their workforce.