Lang Financial Group

Employee Financial Well Being: How Companies Can (Really) Help

By Stacy Kahan, CLU®, RFC®, President, Lang Financial Group

The idea of providing employees with financial benefits and improving their financial well-being has always been a key concern area for employers. However, with the COVID-19 pandemic slowing down the global economy, employees are worried about their financial well-being, too. Research by the Society of Human Resource Management (SHRM) shows that employee benefits make up almost one-third of total compensation costs.

In the present scenario, employers are offering lucrative benefit packages not only to attract new talent but also to retain existing employees. 45% of employers have increased pay rates and 43% of employers have improved benefits to stay competitive when it comes to attracting and retaining talent. Research shows that 80% of employees would keep a job with benefits than one that offered more pay and few benefits.

Vital Statistics to Determine the Financial Benefits Employees Want

Before you put on your thinking cap, let’s look at some vital statistics to get a clear idea of what your employees need when it comes to financial benefits. Research shows that:

As you consider your employees’ financial well-being, ask yourself these questions (we do!):

  • Does your benefits program support employees’ personal goals and requirements?
  • Do you educate employees about the benefits you are offering to help them build a strategic approach toward their financial wellness?
  • Do you annually engage in strategic employee benefits planning to maximize the return on your investment?

Employee Financial Well Being — A Quick Guide for Employers

Based on the above statistics, here’s a quick list of benefits you should consider to increase the financial well-being of your employees:

Retirement Benefits for a Secure Future

Securing their future is a top priority for all employees. You should consider evaluating different retirement benefit plans to help employees strengthen their financial planning.

The most popular retirement plan is the 401(K) plan. It is an employee-sponsored plan and employees set aside/save a significant amount of their pay before taxes. However, it comes with a number of restrictions — employees cannot use the employers’ contribution as and when they want and they incur significant penalties for withdrawing funds before retirement. Nevertheless, the plan is a good starting point for increasing the financial well-being of your employees and securing their future. It also gives employees a retirement date which eases pressures when there is enough saved.

Flexible Paydays to Reduce Stress

Research shows that 78% of employees in the US are living paycheck to paycheck. It can be challenging for employees who have significant financial expenses to wait for their pay check. As an employer, you can provide employees with flexible paydays and help them decide when they want to get paid. Employees who are struggling financially can benefit a great deal from flexible paydays. This can also reduce their stress by helping ensure they make loan payments on time (car, mortgage).

Health Savings Accounts (HSAs) to Cover Deductibles

There are organizations switching to high-deductible health plans combined with HSAs. If this makes sense for your organization, you can consider contributing to your employees’ accounts to cover the deductibles. If you offer an HSA, be sure to educate employees about how HSAs work with 401(K) plans so that they can avail themselves benefits such as reducing their taxable income. A savvy broker can help guide you by sharing the tips and tricks of HSAs.

One-to-One Financial Education to Raise Awareness

Based on research by Aon Hewitt, 23% of employers provide their employees with one-to-one financial counselling, which can be a big help in improving their financial wellness. You can consider offering financial education programs on topics such as retirement plans, HSAs, financial planning, budgeting, and more.

Group benefits can be confusing and your employees may have a lot of questions about their options. A strong group benefits partner will have tools, resources, and processes for working with employees to help them determine the best financial plans. This is essential for bringing value to your team and relieving their financial pressures.

Student Loan Repayment Program to Fend Off Debt

Another way to help employees save for the future is to facilitate loan repayment programs to help them clear their debts.

Young talent is the backbone of every organization. They are hardworking, enthusiastic, and passionate about their work. You can reduce their financial burden by contributing a fixed amount toward their student loan repayment each month — it will go a long way.

We understand how challenging and time-consuming employment and benefits management can be. If you want to offer the strongest and most lucrative employee benefits packages possible for your employees, we can help you achieve your goals. Please contact us here.

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