Financial Wellness is Top of Mind f or 95% of Workers
BY MIKE WILBERT
Just as COVID-19 has affected employees and employers in the past two years, it has changed the employee benefits landscape as well. Today, employers are considering benefits such as mental health and caregiver benefits; flexibility around where work gets done; and re-evaluation of personal time off. As the pandemic and the stress of a third year in a COVID-19 world continues, another benefit is becoming more top of mind with employees: financial wellness.
Just how top of mind are we talking about? Only half (52%) of employees expected their household financial situation to be better in January 2022 than it was in January 2021, according to “The State of Employee Finances: 2021,” a Harris Poll on behalf of Purchasing Power. At the same time, however, half (51%) of employees anticipated their financial stress level would be the same or worse in January 2022 than it the previous January.
Even when the pandemic moves to an endemic status and factoring in the increasing inflation and rising prices due to supply chain issues, many employees will still be trying to recover financially for the next few years. They will be aiming to cover monthly expenses; pay down credit card debt; and begin to replace money they may have been forced to withdraw from their emergency fund, savings account or retirement savings during the pandemic to cover expenses.
Here are four key reasons brokers should be discussing them with employers:
1. Financial well-being benefits are one way to combat The Great Resignation.
There’s no question that the Great Resignation has created an employees’ job market. Employees are changing jobs to go where they will have a better employee experience — not only better wages/salaries and benefits, but also more family time, a better work-life balance, and where employers value them more.
According to a Pricewaterhouse Coopers (PwC) Pulse Survey reported in August 2021, 65% of workers are looking for a new job. The survey revealed that the top two reasons employees
are leaving are #1-wages/salaries and #2-benefits. However, the same study showed a disconnect: employers believed the top two reasons employees were leaving were #1-wages/salaries and #2-flexibility. Employers thought benefits were the #4 reason that employees were leaving.
So employers need to place a higher priority on benefits to resonate with what employees are saying is important. In fact, according to the Harris Poll from Purchasing Power, 78% of full-time employees can tell how much their employer cares about their financial well-being by the benefits they offer.
2. Wage or salary increases aren’t helping employee financial stress.
According to the 2021 Harris Poll on behalf of Purchasing Power, 95% of full-time employees reported having financial stress. The headline of an article in The Washington Post by Abha Bhattarai on January 22 puts the situation in perspective: “That raise meant nothing: Inflation is wiping out pay increases for most Americans.”
It also makes the point that “the same strong recovery that is emboldening workers is also driving up inflation, leaving most Americans with less spending power than they had a year ago.” That’s the problem, and that’s why employee financial stress is going to stay at present levels for a while.
3. Employees say financial well-being benefits matter.
Employees want a solution to their financial problems and they want to know that their employer cares about their financial situation. According to PwC’s 2021 Employee Financial Wellness Survey, 72% of employees whose financial stress increased due to the pandemic say they would be attracted to another company that cares more about financial well-being than their current company.
Knowing that employers care about their financial situations ranks high among employees. The Harris Poll mentioned earlier 79% said they would be more likely to stay with their present employer if they offered more financial well-being benefits.
According to the 2021 Harris Poll on behalf of Purchasing Power,
95% of full-time employees reported having financial stress.
4. Adding voluntary benefits is an easy way to expand workplace benefits offerings.
Employees are certainly accountable for their financial well-being; however, employers have a responsibility as well, and recent research indicates that employees expect it. The Employee Benefit Research Institute (EBRI)’s annual Workplace Wellness Survey released in October reported that 69% of employees agree that their employer should make sure they are financially secure and well.
With employees’ varying needs and desire for customized benefits, voluntary benefits are a way for employers to demonstrate that they value their employees. There are a variety of financial well-being voluntary benefits available that employers can add to their benefits package. There is no cost to the employer, employees can choose ones that suit their individual needs and the employee bears the cost of the benefit.
Some of the benefits that address different aspects of financial well-being include financial counseling, employee purchase programs, bill payment programs, medical deductible financing, student loan repayment benefit programs and automatic savings programs. In many cases, these voluntary benefits can help employees improve their financial well-being. When employees reduce some of their financial stress, the result can be improved productivity and retention.
Brokers’ role in employee financial well-being
Employees’ financial recovery will take time, and they are looking to employers for help. Now is an ideal time for brokers to assist employers in re-evaluating their employee benefits package to assure that it is competitive, especially for voluntary benefits and financial well-being offerings.
Stay apprised of the various voluntary financial wellness benefits available today including those that provide employees some financial assistance in the short term. Bring them to the attention of your clients, such as employee purchase programs, bill payment programs, medical deductible financing, and automatic savings programs. Encourage your clients to commit to providing additional ways to assist employees in improving their financial well-being through voluntary benefits.
According to PwC’s 2021 Employee Financial Wellness Survey, 72% of employees whose financial stress increased due to the pandemic say they would be attracted to another company that cares more about financial well-being than their current company.
MIKE WILBERT is chief revenue officer at Purchasing Power, a voluntary benefit provider. He has 30 years of experience in the insurance and voluntary benefits industry. https://www.purchasingpower.com