by George Finney, CRPS
Everence Director of Retirement Services
One significant stressor challenges many employees
Many organizations are trying creative ways to help employees stay positive during the pandemic. Yet, these methods often don’t address one key cause of their employees’ underlying stress: personal finances.
Companies need to look at this issue if they want to retain high-quality workers through these challenging times and beyond.
Pandemic accentuates one stressor
This significant stressor among employees existed before the pandemic and has only grown this year. COVID-19’s historic impact on the economy has only increased the number of people with financial challenges.
An employee’s socioeconomic background affects how they experience their financial situation. However, it may surprise you to know that even high earners often struggle financially.
Life stage is also an important factor in one’s financial stress level. Young adults, with fewer assets to draw on, often feel the stress of uncertain finances more than older employees.
But study after study shows that all employees with unstable personal finances are more distracted and less productive at work.
What employers can do
So how can employers begin to help their employees feel better about their finances?
First, start with getting an understanding of where your employees are on their financial journeys. For instance, a workplace assessment that anonymously surveys employees about their personal finances would show how many are struggling to make ends meet or pay off debt. And, you would learn how many others are saving enough but are concerned about how to make financial decisions in their transition to retirement.
No matter where an employee might be, it’s important to meet them where they are and help them advance toward financial well-being.
Financial wellness programs at work
Ever since the Great Recession, many employees have struggled to reach long-term financial stability, even with the improved economy in the years since. To help address this financial insecurity, employers have begun to turn to financial wellness programs. These programs typically provide employees with personal finance education.
PwC released a significant long-term study on the effectiveness of these programs, its 9th annual Employee Financial Wellness Survey, 2020 COVID-19 Update. This study also documents the significant stress of unstable finances among employees, which is greater than even job and health concerns.
Employers often implement financial wellness programs when they notice their employees are not taking full advantage of their retirement plans. When employees are struggling to address short-term financial needs, they have a hard time thinking ahead about their long-term financial future, like saving for retirement.
Recordkeeper financial wellness solutions
Many retirement plan recordkeepers now offer online financial wellness education and services. Most of these programs aim to help employees put enough money away for retirement.
These solutions rely on employees to seek out these online programs. But many employees need more assistance to truly improve their financial situation.
Making real change that lasts
We see customized workplace education – along with access to a financial consultant – as a combination that helps employees with financial stress. This focused education and personal assistance is free to employees if the consultant is paid through the retirement plan to help them participate fully in the plan.
The consultant serves as an accountability partner for an employee so they can use what they learned to meet their personal short-term and long-term financial goals. Ultimately, the program helps an employee create a reasonable path to increase their immediate financial stability, so they can save more for retirement.
COVID-19 gives employers a new reason and opportunity to support their employees with enhanced benefits that truly make a difference in their lives. Feel free to contact me about your financial wellness questions or learn more about our services.