According to speakers from the Society for Human Resource Management 2019 Annual Conference & Exposition, employees who are taking advantage of financial health benefits have less stress, reduced distraction and lower absenteeism. Read this blog post for more on financial fitness benefits.
LAS VEGAS—Employers that help workers improve their financial health are seeing increased productivity, job satisfaction and retention. Employees taking advantage of these benefits have less stress, reduced distraction and lower absenteeism, according to speakers at the Society for Human Resource Management 2019 Annual Conference & Exposition.
“Your employees are financially stressed, and it’s affecting your business,” said Dan Macklin, CEO of Salary Finance, a financial technology firm, during a June 24 panel discussion on financial wellness benefits. A survey conducted by his firm, with responses from 10,484 U.S. employees, found that 48 percent were worried or stressed about their finances. Financially stressed employees lost nearly one month of productive workdays per year.
Money management problems exist across all income levels, Macklin noted.
“Financial worries are the No. 1 cause of employee stress,” said Kent Allison, national leader for employee financial education and wellness at PwC. The consultancy’s 2019 Employee Financial Wellness Survey, with responses from 1,686 full-time employees, showed that 59 percent cited financial or money matters as their chief source of stress, followed by their job (15 percent) and relationships.
Nearly half (49 percent) of all employees said they find it difficult to meet household expenses on time each month, PwC found.
“Employees are seeking personalized financial guidance and coaching,” Allison said. “Successful financial wellness programs find the optimal way to combine technology and human interaction” to help employees get back on track financially.
Organizations are more likely to thrive when they help employees “bring their healthiest and happiest self to work,” said Felicia Cheng, wellness benefits program manager at HR technology firm SalesForce.
Organizations are more likely to thrive when they help employees ‘bring their healthiest and happiest self to work.’
Have meaningful conversations with employees, said Wendy Myers Cambor, Northeast U.S. HR leader at consulting firm Accenture. “Ask what they want, what they need and how we might be in a position to accommodate them.”
Accenture, like many companies, has five generations of employees in its workforce, whose concerns range from “managing student debt and affording to have a child and buy a home, to helping to care and provide for aging parents while preparing for their own retirement,” Cambor noted.
Physical wellness and financial wellness are deeply interrelated, said Allison, because financial distress can lead to health distress.
Similar to health risk assessments, he said, financial wellness assessments can be helpful because “how can you change behaviors if you don’t know what these behaviors are?” He advised, “Assess employees to know where they are financially and what their needs are, and what behaviors they may need to change.”
Financial health assessments could be stymied if employees don’t feel comfortable revealing their distress—and don’t trust their employers with this information, panelists noted. Cheng said it was important to help employees overcome taboos around admitting to money problems, because, if employers don’t understand the scope of the challenges their employees face, they can’t provide the help that employees need.
Macklin noted that younger workers seem more willing to discuss their financial difficulties and are grateful for the guidance and assistance employers provide.
Younger workers seem more willing to discuss their financial difficulties and are grateful for the assistance employers provide.
“Engage employees at the right time to provide help when needed,” Allison suggested.
“People are suffering,” Cambor said. “There are opportunities for HR to make a difference in peoples’ lives.”
“Employees’ stories are powerful,” Cheng said. HR should “bring them to the leadership team, coupled with data on the positive impact of financial wellness,” to make the case for financial wellness benefits.
Student Loan Benefits Are in Demand
Student loan debt affects employees at all stages of their careers, said Kevin Fudge, director of consumer advocacy at American Student Assistance, a nonprofit that helps students manage their education debt, during a June 25 conference session.
He noted that more than 3 million Americans ages 60 and older currently owe more than $86 billion in unpaid student loans, according to the Consumer Financial Protection Bureau.
Employees face different concerns at different career stages, Fudge pointed out, including:
- Early career: Paying off student loans and related debt.
- Mid-career: Supporting a family and saving for children’s college education.
- Late career: Helping children and grandchildren by co-signing loans and preparing for retirement.
Fudge pointed to innovative ways employers are helping with student loans. For instance:
- Abbott Laboratories allows employees to save for retirement and pay down their student loans. If an employee is paying off student loans (using 2 percent or more of their pay), Abbott will put the equivalent of 5 percent of the employee’s pay into his or her 401(k) account.
Abbott received a private letter ruling from the IRS to allow this practice. The IRS is expected to sanction similar plans with broader guidance. Legislation has also been introduced to allow this practice.
- Unum, a national insurance firm, lets employees transfer carried-over paid time off into debt repayment.
In a June 24 conference session on student loan benefits, Meera Oliva, chief marketing officer at Gradifi, a loan benefits administrator; Jane Fontaine, senior vice president of HR at Digital Federal Credit Union; and Chad Carter, vice president of benefits at Fareway Stores, shared these examples, showing the range of student loan aid employers are providing:
- AECOM, a Fortune 500 engineering firm, offers student loan refinancing along with student loan counseling and financial wellness content.
- Carvana, an e-commerce platform for buying cars, offers up to $1,000 per year to help full-time employees pay off their student loans.
- Connelly Partners, a Boston-based advertising agency, offers a total benefit of $10,000 with contributions starting at $100 a month for the first year and then increasing $25 a month for the next four years. In another effort to retain employees, the firm gives a $1,000 retention bonus at the end of the fifth year of employment.
- Sotheby’s, an auction house and private sales firm, offers $150 per month contribution toward student loans indefinitely until employees are no longer in debt, including parents who have taken on debt for their children.
SOURCE: Miller, S. (27 June 2019) “Financial Fitness Benefits Take Center Stage as Debt Worries Grow” (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/financial-fitness-benefits-take-center-stage.aspx