Attracting and retaining good employees — particularly millennials — may be simpler than you presume: Rather than simply plying workers with the usual workplace perks, consider partnering with them as they tackle their financial challenges.
And providing employees resources to help them decrease their debt, learn to budget, save for a home or pay off college student loans may benefit your company as well — studies show that employees who aren’t distracted by financial issues are more productive and less apt to miss work than their counterparts.
The Rise of Financial Wellness Programs
Many major employers now recognize the value of offering employees “financial wellness” benefits — particularly student loan repayment for younger workers. In fact, according to a study by employee benefits consulting firm Aon Hewitt, more than three out of four large- and mid-size companies plan to offer financial wellness programs. The Society for Human Resource Management (SHRM) also thinks 2017 may be “the year of employee financial wellness programs.”
Here’s what your company needs to know about offering financial wellness as an employee benefit:
- Your workforce is getting younger. Millennials are now the largest proportion of the overall workforce, according to the Pew Research Center, and so, some benefits will need to target the unique needs of younger workers. Financial wellness programs fit the bill.
- Almost half of young employees have significant student loans. PricewaterhouseCooper’s (PwC’s) 2016 Employee Financial Wellness Survey indicates that 42% of millennial workers have outstanding student loans. Of that group, almost four out of five employees said ongoing loan payments made it slightly or moderately challenging for them to meet ongoing monthly expenses and achieve other financial goals.
- Younger workers face more financial stress than older employees. Financial stress is common among more than half of all workers, but such worries are particularly acute among younger workers: More than 64% of millennials regularly feel anxious about their bills and financial well-being.
- Money stress is a work distraction. More than half of workers with student loans — double the number of other workers — say they’ve wasted work time worrying about financial problems, according to PwC. The Aon Hewitt report found that 44% of employers are creating or expanding financial wellness programs specifically to reduce the amount of time workers spend dealing with financial issues.
How Financial Wellness Benefits Can Help
- Younger workers want financial solutions today. Some financial wellness benefits can help employees immediately — including budget education, debt reduction and student loan repayment assistance.
- Financial programs can increase worker retention. Helping employees reduce money-related stress can significantly increase worker loyalty and connection to their company, according to SHRM.
- Less financial distraction at work = greater employee productivity. The philosophy behind this goes: Just as companies realized that helping employees with mental health, addiction and other problems helped decrease at-work distractions and improved work quality, employers will soon grasp that adding financial issues to the matrix of addressable issues is key, too. Financial wellness programs may well be “the next evolution of employee assistance programs,” according to the American Marketing Association (AMA).
- Workers may be more likely to participate in your workplace retirement plan. Employees who aren’t overly worried about handling ongoing monthly expenses — including student loan payments — may be more willing to sign up for company 401(k)s and other retirement programs, according to SHRM.
The good news? Your company doesn’t necessarily need to hire financial coaches or build special expertise in financial benefits to get this done. It’s easier than ever to partner with outside businesses that specialize in financial wellness programs, including education, debt reduction and student loan repayment benefits.
This article is not intended to constitute tax, financial or legal advice. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained here. Readers should consult their own attorneys or other tax or financial advisors to understand the tax, financial and legal consequences of any strategies mentioned in this article.