By Erin Haynes Reed
When it comes to retaining top talent, most HR professionals recognize how crucial it is to provide a competitive comprehensive benefits package for their employees. Many industry professionals are becoming even more strategic about developing an offering that is holistic in nature and meets the needs of an ever-changing workforce. But, do your employees truly understand the value of their integrated benefits package and how it impacts their future?
Most Americans spend about one-third of their life at work. Many companies are focusing on creating an integrated offering encompassing all aspects of an employee’s life. Based on my personal interactions, benefits for work, health, lifestyle, and financial security are now top of mind when developing cohesive and enticing packages. However, with endless options available, it can be a challenge for employers to know which benefits offerings are both valuable and desirable for their specific workforce and to ensure their employees are making the most of them.1
Even with the myriad of trends, topics and buzzwords, one focal point has seemingly overcome all the industry noise: financial wellness. With financial stresses from personal matters to economic circumstances, it’s not surprising that financial health has become a huge topic of discussion for employers concerned about their employees’ wellness. And while this topic continues to be a leader in the employer benefits arena, we anticipate several key financial benefits concepts to emerge in 2020.
- INTEGRATING FINANCIAL WELLNESS WITH PHYSICAL AND EMOTIONAL HEALTH.
It’s not uncommon for employers to offer wellness programs that focus on physical and emotional health. Now, many companies are noticing the overarching impact that financial wellness can have on their employees’ health.
Financial struggles are consistently listed among the highest causes of stress. This burden can lead to anxiety, frustration and unease in every aspect of life. For someone who is dealing with financial stress, employers may notice negative changes in their mood or productivity during the workday – directly impacting companies’ bottom line.2
However, by providing employees with meaningful tools to address their finances, many companies are seeing an increase in productivity, employee engagement, and employee morale. When employees are less focused on their finances, they have more time to be focused on their work.
- LEVERAGE OF INNOVATION & FINTECH
It’s not enough that companies are providing financial wellness programs for their employees. The need to access personalized financial information in a convenient way is becoming a necessity.
Financial Technology, also known as fintech, is on the rise as employers are searching for easily accessible platforms to support their employee financial wellness programs. Functionalities such as mobile applications, Artificial Intelligence (AI), self-directed e-learning tools, and even personal financial coaches help employees manage their personal financial education and wellness.
Not only are these platforms elevating employee financial health, many are becoming fully integrated offerings for the end user. By incorporating 401(k), HSA, and other employer-sponsored benefits these solutions have become a convenient option to help employees have a holistic look at their current and future financial picture. As new innovations become available, we only see this shift towards consolidation and convenience a more prevalent offering for employer-sponsored financial wellness programs.3
- GENERATIONAL PERSONALIZATION OF BENEFITS
As we enter 2020, we have four profoundly different generations dominating the workforce: Baby Boomers (b. 1946-1964), Gen X (b. 1965-1979), Millennials (b. 1980-1994), and Gen Z (b. 1995-2012). With each of these groups comes a unique set of wants and needs in their benefits packages.
Currently, Boomers are the main generation entering (or thinking about entering) retirement. Their financial needs tend to be more focused on financial security, health insurance, and cash flow management when they no longer receive a salaried income. On the other side of the spectrum, Gen Z is just entering the workforce. Their concerns are generally based in career advancement and debt repayment.
With this wide array of financial needs, the option for a “one size fits all” financial solution is obsolete. Companies are beginning to understand this need for personalization, and many are considering implementing a variety of financial benefits options that are tailored to fit the needs of each generation in their workforce.
- STUDENT LOAN DEBT ASSISTANCE
It’s no new news that debt is a serious issue for many Americans. As younger generations make up a larger population of the current workforce, companies are helping these employees tackle one of their most common sources of debt: student loans. This type of benefit not only helps employees accelerate their student loan payments, but allows them to better manage their current and future finances.
Companies have taken several different approaches to this issue. Some employers are flat out matching amounts employees pay towards student loans, while some are utilizing 401(k) contribution matching programs to help pay for student loan debt. Others are partnering with third party firms to provide debt consolidation, refinancing options, or student loan debt payment counseling for their employees.
Either way, with the Employer Participation in Repayment Act as a bill on the docket for this year, and the 2020 election underway, student debt repayment is going to continue to be at the forefront of many working Americans.
- FUNDING FOR THE GREATER GOOD
Financial benefits that are making lots of lead way in recent years are those that not only help individual employees, but also benefit their colleagues and their communities. Employer sponsored Corporate Social Responsibility (CSR) programs and employee relief funds have stepped into the spotlight as means of financial assistance and support.
Both types of funds are created with the intention helping those in need. While CSRs typically are intended for philanthropic endeavors, employee relief (or rainy day) funds are intended to be utilized for direct employee needs. These funds help employees who find themselves in a sudden financial hardship or disaster. The fund can be supported by company donations, individual employee contributions, or a combination of the two. Depending on how the fund is initially set up there are also potential tax benefits for both the employer and the employee.
To still aid employees in need, but avoid the hassle of setting up a separate fund, many companies choose to offer employer-sponsored interest-free loans for employees. These types of programs typically do not have the potential tax advantages as employee relief funds, but still provide employees with financial assistance in times of need.
Companies that wish to sharpen their edge in a competitive market will embrace new and innovative employee benefits offerings. Whether employers begin to utilize one or all of these trends, one thing is for certain – financial health is going to continue to be a key component of successful employee wellness programs.
Over the next several months, we will take a deeper look at each of these topics and provide insights on how to help your employees see their financial futures more clearly through comprehensive benefits offerings.
Erin Haynes Reed
Corporate Solutions
[email protected]