With unemployment rates at a 49-year low, one would assume that U.S. employees feel comfortable with their current financial situation. However, a recent financial wellness study from PricewaterhouseCoopers (PwC) indicates quite the opposite, with more employees than ever admitting to feeling stressed about their financial circumstances.
This is bad news for employers – especially since 35% of employees report that issues with personal finances have been a distraction at the office, which can negatively impact productivity and quality of work. That’s why it’s critical for employers to make financial wellness happen in the workplace. Here are five ways to get started.
Consider financial education
Why are employees increasingly stressed out by their financial situations? It may have to do with the fact that two-thirds of American adults can’t pass a simple financial literacy test. Without this basic foundation, it’s no wonder that employees are confused about their finances and consequently mismanage them. Employers may want to consider investing in classes to help employees navigate their personal finance decisions.
Such classes can cover a broad range of topics from managing debt to paying off credit cards to learning how to save for a big milestone like a home mortgage. Empowering employees with a basic understanding of financial management can help them feel more in control of their situation.
Offer financial counseling
If you want to take financial education to the next level, counseling is a good second step. Financial counselors can help people get out of debt, build up an emergency fund, and catch up on bills that have gone unpaid. The same PwC study found that employees want both to make their own financial decisions and to have an expert to validate their choices. Counseling provides a great opportunity for employees to call the shots on their finances, but with a little professional support.
Help employees plan for the future
The majority of current workers are putting their dreams of retirement on the back burner due to financial stressors. More than 80% of today’s employees believe they’ll still be working during retirement. If you break it down demographically: less than half of Baby Boomers and just one-third of Millennial and Gen X employees are confident about retirement. Not only are they not saving enough, but 27% of employees are actively withdrawing money held in their retirement plans to pay for other expenses. In the future, 49% are likely to dip into retirement savings.
There are many ways employers can support long-term saving. The first one is to offer 401k financial assistance, which is one of the primary ways employees are saving for retirement. You can offer 401k matching options to encourage employees to contribute a portion of their salaries. Or, if this isn’t within reach, you can invest in educational resources, so employees know how to leverage these retirement accounts most effectively.
Get creative with financial wellness benefits
As financial wellness becomes an increasingly important issue in the workplace, companies are coming up with creative benefits to address this issue. For instance, student loan repayment is a financial wellness benefit that’s on the radar of some companies. This is a great idea since 49% of Millennial employees have one or more student loans and 80% of them say that their student loans have a moderate or significant impact on their ability to meet their other financial goals.
Another top employee concern is healthcare. Employees across all generations – Millennials in particular – are concerned that rising healthcare costs will impact their retirement. Health Savings Accounts (HSAs) are a benefit worth considering to help employees toward their financial wellness goals. They can help employees save money for their next healthcare emergency or even be used as a vehicle for retirement savings. Just make sure to invest in education with this benefit as well: of the 60% of employees who are covered by a high or mid-deductible healthcare plan, only 38% of them are contributing to their HSAs. It’s another tax-free way to save money, so encourage your employees to contribute to and use their HSA. Your employees can integrate their HSAs into the HealthJoy experience and even get guidance from our healthcare concierges about usage and product eligibility.
Provide access to online financial management tools
As an increasingly digital society, we’re seeing online financial management tools and robo-advisors abound. This can be anything from simple budgeting trackers to investment management platforms. These tools are a great option since one in four employees ranks a financial wellness benefit with access to unbiased counselors as a benefit they’d most like to see in the future.
Finally, if you’re worried about the utilization of your financial wellness programs, don’t be! The PwC study found that 71% of employees with employer-provided financial wellness services say they’ve used the benefit. The bigger problem is that only 24% of employees indicate that their employers offer such services, which shows that supply isn’t meeting demand. But by putting a few of the outlined steps into action, you can change that situation in no time.