Financial health benefits take center stage as debt problems rise
LAS VEGAS — Employers who help workers improve their financial health see increased productivity, job satisfaction and retention. Employees who take advantage of these benefits have less stress, fewer distractions and less absenteeism, according to speakers at the 2019 Society for Human Resource Management Annual Conference and Exhibition.
“Your employees are financially stressed and it affects your business,” Dan Macklin, CEO of Salary Finance, a financial technology company, said at a June 24 panel discussion on the benefits of financial well-being. A survey conducted by his company, with responses from 10,484 US employees, found that 48% were worried or stressed about their finances. Financially stressed employees lost almost a month of productive work days per year.
Money management issues exist at all income levels, Macklin noted.
“Financial worries are the number one cause of employee stress,” said Kent Allison, national leader in financial education and employee wellness at PwC. The consulting firm’s 2019 employee financial well-being survey, with responses from 1,686 full-time employees, showed that
59% cited financial or financial matters as their main source of stress, followed by their work (15%) and their relationships.
Almost half (49%) of all employees said they struggled to meet household expenses on time each month, PwC found.
“Employees are looking for personalized financial advice and guidance,” said Allison. “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, happiest selves to work,” said Felicia Cheng, manager of the wellness benefits program at a human resources technology company. Salesforce.
Organizations are more likely to thrive when they help employees “bring their healthiest, happiest selves to work.”
Have meaningful conversations with employees, said Wendy Myers Cambor, Northeast US HR Manager at a consulting firm Accent. “Ask them what they want, what they need and how we might be able to accommodate them.”
Accenture, like many companies, has five generations of employees on its workforce, whose concerns range from “managing student debt and affording a child and buying a house, to helping care and to support aging parents while preparing for their own retirement, “Cambor noted.
Physical well-being and financial well-being are deeply linked, Allison said, as financial distress can lead to health problems.
Much like health risk assessments, he said, financial well-being assessments can be helpful because “how can you change behaviors if you don’t know what those behaviors are? He advised, “Assess employees to see where they stand financially and what their needs are, and what behaviors they may need to change.” “
Financial health assessments could be blocked if employees feel uncomfortable disclosing their distress and trust their employers with this information, the panelists noted. Cheng said it was important to help employees overcome taboos around admitting money issues, because if employers don’t understand the extent of the challenges their employees face, they can’t provide the help employees need.
Macklin noted that young workers seem more willing to discuss their financial difficulties and are grateful for the advice and help provided by employers.
Young workers seem more willing to discuss their financial difficulties and are grateful for the help provided by employers.
“Engage employees at the right time to provide help when needed,” suggested Allison.
“People are suffering,” Cambor said. “There are opportunities for HR to make a difference in people’s lives. “
“Employee stories are powerful,” said Cheng. HR should “bring them to the leadership team, coupled with data on the positive impact of financial well-being,” to advocate for the benefits of financial well-being.
[SHRM members-only toolkit: Designing and Managing Wellness Programs]
Student loans 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 student debt, at a conference on June 25.
He noted that more than
3 million Americans aged 60 and over currently owe over $ 86 billion in unpaid student loans, according to the Bureau of Consumer Financial Protection.
Employees face different concerns at different stages of their careers, Fudge pointed out, including:
- Carrier start: Pay off student loans and related debts.
- Mid-career: Support a family and save for children’s college education.
- End of career: Help children and grandchildren by co-signing loans and preparing for retirement.
Fudge highlighted innovative ways employers are helping with student loans. For example:
- Abbott Laboratories enables employees to save for retirement and pay off student loans. If an employee repays student loans (using 2% or more of their salary), Abbott will pay the equivalent of 5% of the employee’s salary into their 401 (k) account.
Abbott received a ruling by private letter from the IRS to authorize this practice. The IRS should sanction similar plans with broader guidance. Legislation has also been introduced to allow this practice.
At a June 24 conference on student loan benefits, Meera Oliva, Marketing Director 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 help provided by employers:
- AECOM, a
Fortune 500 engineering company, offers student loan refinancing as well as student loan advice and financial wellness content.
- Carvana, an e-commerce platform for buying cars, is offering 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 per month for the first year, then increasing by $ 25 per month for the next four years. In another effort to retain employees, the company is offering a retention bonus of $ 1,000 at the end of the fifth year of employment.
- Sotheby’s, an auction house and private selling company, is contributing $ 150 per month to student loans indefinitely until employees are no longer in debt, including parents who have incurred debts for their children.