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Financial Wellness Benefits the Company and the Employee
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Alright, so that’s not exactly new information. However, the way employers are (finally) responding to their employees’ financial pressures is exciting news. A 2016 Virgin Pulse survey found that 27% of companies are planning to provide more financial wellness benefits in the next three years. The same survey found 26% of the respondents reported their company offers a financial wellness benefit and they participate.
The problem is finding the right programs that actually make a difference for employees. Most companies already offer traditional financial perks like retirement planning; a 2016 Society for Human Resource Management survey found 94% of organizations currently offer that to employees. While this is an extremely important benefit, there are other causes of financial stress that employers can help alleviate.
A new wave of benefits has risen up and is changing the way organizations support their employees’ financial wellness. Here are four benefits every employer should consider if they want to offer the best to their workforce:
Post-recession America’s credit problem has become increasingly apparent. However, despite the issues that surround having bad credit, few employees know even the essentials of building credit. A 2015 LendingTree survey found that 59.1% of Americans don’t know their credit score and only 16% know that 850 is considered a perfect credit score.
There is a wide range of ways companies can help fix this problem. Offering fundamental financial education gives employees reliable information on how to fix or maintain their credit score.
Memberships to credit monitoring services are another option. And recently the IRS redefined credit monitoring as identity theft protection which means offering the benefit to employees is non-taxable. In many cases, companies like CSID also include protection for employees in their general enterprise services. So, the same financial protection an organization has can also cover employees with credit monitoring.
Or for the organization that really wants to help their employees tackle credit problems, there are counseling services that provide advice on ways individuals can consolidate their debt and build better credit.
The cost of college tuition has skyrocketed over the past decade. And this has created a large financial strain for parents. A 2015 Gallup survey found that, for employees with children under 18, paying for college is their biggest money concern. Seventy-three percent of parents reported worrying about the cost of college.
In response to the college cost burden, some companies now offer student loan repayment benefits. While that helps college graduates pay down their educational debt, it’s a curative, not a preventative solution. What’s truly needed to alleviate the stress of the price of college is savings support.
One of the best options employers can offer is enrollment in 529 plans. A 2015 Sallie Mae study found that, on average, parents who used a 529 plan to prepare for their child’s college education saved $11,590. For prospective parents who used a traditional savings account, only $3,419 was saved.
By providing education and enrollment options in 529 plans, organizations can ensure parents are prepared to help pay for college, instead of passing that burden onto their children through student loans.
Wellness programs have become extremely popular in the workplace. The Virgin Pulse survey found that 53% of companies have made physical fitness a part of their wellness program. Many, however, are missing the chance to tie employee participation in physical activity to their financial wellness.
The SHRM survey found that just 17% of companies discount employees’ premiums if they take part in wellness programs or competitions. As a reward for making healthier lifestyle choices, employers can also address financial wellness by covering more of their health care costs.
This also provides organizations with two benefits: less stressed employees and lower overall health care costs as a result of having a healthier workforce.
As any parent knows, having a child is expensive. Even if a pregnancy has no medical complications, the cost of doctor visits and baby basics like cribs, bottles, and diapers add up incredibly fast. As such, finances play a big part in many young people’s decision to have children or not.
Organizations can help support employees who want to become parents by offering benefits above and beyond traditional parental leave. For example, Facebook not only offers four months of paid leave to new parents, but also gives them $4,000 in cash to help offset the costs of having a child. That extra money provides more financial stability during an already stressful time for employees.
Employees’ financial stress is nothing new. But the options available to help them overcome threats to their financial wellness are now expanding. With so many ways to support employees’ financial state, there’s really no reason to let stress about money continue to negatively affect employees or their performance.
What are some other ways organizations can help improve employees’ financial wellness? Share in the comments below!