From healthcare costs to emergency savings, the COVID-19 pandemic highlighted HR’s challenge in finding cost-effective ways to help employees with the financial hardships they are facing.
But post-pandemic, there is a real opportunity for employers to help employees recover from some of the economic impacts of the past year, Mike Wilbert of Purchasing Power said recently at the virtual Health & Benefits Leadership Conference.
Wilbert, chief revenue officer for the voluntary financial benefits provider, highlighted some “unfavorable” statistics on employee finances found in soon-to-be-released survey data from Purchasing Power. In particular: 44% of respondents say they’re more or somewhat worse off now than they were before the pandemic and 38% say they had to make some spending habit changes.
Despite the discouraging statistics, employers who put programs in place to help can reap rewards, Wilbert said. In fact, three in four employees say they are more likely to stay with their employer if they are offered more financial wellbeing benefits, he said.
“In the past, I don’t think employees looked to their employers as much, or at all, for financial wellbeing and support,” he said. “That has changed dramatically in recent times.”
So far, however, few employers are listening. As of September, only 20% of employers indicated they’d be adding any new financial wellness perks in the near future, according to the company’s data.
“There is a disconnect,” Wilbert said. Employees say they’ll stay if they get these benefits, but at least as of late 2020, employers say they aren’t seriously considering adding these benefits.
For employers that do want to help improve employee financial wellness, several voluntary benefits can make an impact, he said, even if they’re small.
“The big thing is breaking the paycheck-to-paycheck cycle,” he said. “For low earners–most people earning less than $70,000 after tax– the vast majority of their expenses exceed monthly income, which creates that paycheck-to-paycheck cycle.”
- Low-interest installment loans: These help employees avoid payday loans and high-interest credit cards.
- Medical deductible financing: Especially attractive given the increasing popularity of high-deductible healthcare plans, these low-interest programs can help cover deductibles and can be repaid through payroll deductions.
- Employee purchasing programs: These give employees access to products and services through payroll deductions.
- Student loan repayment programs: With these programs, employers can contribute to help pay down loans or can help employees find ways to refinance that debt.
“The impact of COVID-19 on employees’ lives and their finances really shined a light on the value of voluntary benefits, because there are so many different needs within all of the different demographics that a typical employer has,” Wilbert said. “By offering an array of voluntary benefits, the employer can allow the employee to tailor their benefits to their specific needs.”
He advised working with benefits brokers to identify and address the needs specific to your employees. And once they’re in place, don’t forget to tell workers about them.
“At the end of the day, we have to communicate these benefits as frequently as possible,” Wilbert said. “The more we can communicate these benefits and how they can be used, the higher likelihood it is they’ll be leveraged by our employees who need them.”