Employers have always offered benefits to attract and retain the best talent, especially during tough economic times, such as the Great Depression of 1929. The current two-pronged challenge of COVID-19 and the Great Resignation has employers again looking to their benefits packages to keep their top employees, especially for tech jobs. If you're in the market for that kind of gig, one of the more attractive new benefits you should make sure prospective employers offer is financial wellness.
Many employers think medical plans and retirement packages are all the financial help they need to provide. But the pandemic's fallout has the best employers adding new services. From the employer's point of view, the rationale is straightforward: Hiring new talent and keeping what they have means taking better care them. But according to an October 2021 benefits research study by the Employee Benefits Research Institute (EBRI), employers are also more concerned with their employees' overall well-being. Like big mother hens who write you a paycheck every couple of weeks. According to those numbers, the amount of employers who care usually hovers at around 25%. But the pandemic now has 34% of employers saying they'd rate their level of employee concern at 9 points out of 10. That's a lot of mothering.
There are less parental motivations, too. According to the EBRI study, the main driver behind financial wellness programs is overall employee satisfaction, which directly impacts new hiring, too. For current hires, employers are mainly looking to increase productivity (32%) and decrease financial stress (28%).
That last one is growing in importance. Another study from PwC that surveyed 1,600 full-time US employees found that 63% reported they were worrying more about their finances now than before COVID. Though millennials top the list at 72%, the concern cuts through all age groups. The survey also showed more workers were having financial difficulties, even though they were employed.
Respondents were four times as likely to have experienced an overall decrease in their household income and twice as likely to have used a payday loan or advance to make ends meet during the past year. They're also twice as likely to believe they'll need to postpone retirement. Those issues have respondents being four times as likely to admit that worrying has distracted them at work.
Those are compelling statistics for human resource execs trying to keep the workers they have and attract top talent at the same time, particularly for those high-demand and skill-gap-plagued technology roles. And if you're out there looking for a new job, especially an IT gig, finding out what kind of financial wellness benefits a prospective employer offers could be just as important as the healthcare plan.
What Does Financial Wellness Cover?
If a prospective employer says it's offering financial wellness with better healthcare benefits and a 401k plan, then you're being sandbagged. A competitive package here needs to address the money problems employees have now: Partners and spouses might have been laid off, children may require different kinds of care, and medical expenses might have suddenly spiked.
Financial wellness should tackle those problems head-on with initiatives for short-term pay flexibility, budgeting help, credit counseling, and even in-house credit programs, as well as caregiving assistance. Increased help with paying back student loans and housing costs are also popular incentives. The idea is for an employer to offer benefits that help across the complete picture of an employee's finances.
If you're an employer, and this all sounds soft and expensive to you, know that PwC's numbers show that companies offering financial wellness initiatives have seen the number of employees using them jump from 51% in 2012 to 88% in 2021. Want to make employees happier? This works.
That's borne out by how PwC's respondents changed their financial behavior during COVID-19. The study showed that 58% of respondents were saving more in general, roughly 10% of their overall income, while 72% have already socked away over $1,000 to deal with any upcoming emergencies. But even with that kind of positive behavior, the survey also showed that around 50% of its respondents would be embarrassed to ask for help with their finances, no matter which aspect was being scrutinized.
Younger workers, for example, are more worried about their day-to-day living costs, according to PwC, while older employees are more concerned with stock volatility. The sheer breadth of these worries makes this an obvious and valuable need you can fulfill for your employees right now—not just to attract and retain workers but also to help your workforce in a tangible way, before money really becomes a problem for them.
Start With Tech
One of the best ways to get employees using these programs is technology. Digital tools can help them overcome their initial embarrassment and let employers offer a high degree of personalization using automation rather than what might be more difficult person-to-person interactions. It also lets employees divulge more detailed information about personal finances, stuff they might be reluctant to provide in other ways. Employers need to ensure this data is protected and used only to help individual workers. But a digital portal should only be the on-ramp, not the entire solution.
PwC shows nearly one in five employees waiting to ask for help until they actually hit a financial crisis. For long-term help, fully one-third of PwC's respondents said the financial wellness benefit they'd most like to see would be access to an unbiased coach with whom they could form a long-term relationship. Being competitive here means designing a financial wellness program that works with employees continuously rather than just in times of crisis when options are more limited.