As employers expanded benefits this past year to help struggling employees manage the impacts of the pandemic, they also started looking more holistically at the needs of their workforce–shedding light on how integral financial wellness is to the overall benefits picture.
Pandemic-driven job losses hit Americans hard, illuminating the reality that many Americans are not on strong financial footing–and that has a direct link to physical, mental and emotional wellness, says Melissa Gopnik, senior vice-president at Commonwealth. While employers are increasingly recognizing that tie and providing financial education for workers, now is a prime opportunity to take awareness-raising to the next level, she adds.
Gopnik will share strategies employers can use to help their workers get on better financial footing during her keynote at next month’s Health & Benefits Leadership Conference, a free, virtual event running May 11-13. She recently gave HRE a preview.
HRE: How has the pandemic affected employer perspectives on the value of assisting employees with their financial wellness?
Gopnik: As the images of long lines at food banks became commonplace, we saw an increase in interest from employers in addressing the financial health of their employees. The pandemic shined a light on the extent of financial fragility in the U.S.–even among people who are employed. In 2020, employers recognized this need but many were too busy adjusting to remote work and addressing the important issues of diversity, equity and inclusion to take action. In 2021, with less uncertainty about the future, employers are now ready to consider redesigning their existing benefit programs, or adding new ones, that will build the financial security of their employees.
HRE: What are some of the most innovative ways you’ve seen employers help their workforces shift their mindsets around savings?
Gopnik: In all of our research, we have almost never encountered someone who did not understand the importance of savings. The roadblock to savings is the lack of access to a well-designed savings benefit that is easy and engaging to use. HR professionals are often surprised by the statistic that approximately 40% of lower-income workers don’t have a savings account at a bank. It is really hard to save if you don’t have a place to save. Some employers have asked the financial institution where the company banks to offer a no-cost savings account to all its employees to address this barrier. Employers will be disappointed in their results if they only focus on financial education–a focus on sharing actionable knowledge and creating engaging opportunities to save will yield better results.
See also: Financial health is workers’ biggest wellness concern
HRE: How can organizations better tailor financial wellness strategies to the individual needs of their workforces, especially given how the pandemic has impacted employees so differently?
Gopnik: Employees in the same workplace have had very different experiences of the economic fallout of the pandemic. There are some employees, such as those who don’t have kids or whose kids are older, who might actually be better off because they have been able to reduce their expenses during this time. However, there are three types of employees who may have had their finances impacted.
- First, parents with young children, mostly women, have had to reduce their hours or stopped working altogether. This has often meant a significant decrease in a household’s income.
- Second, there are employees who have seen a decrease in their household income because their partner’s income has been impacted or their own income from a second job has disappeared.
- Finally, there are employees who have been impacted by COVID itself. Approximately 19% of all Americans have a close friend or relative who has died of COVID–this jumps to 30% for Black and Latinx households In many cases, this has led to extra medical expenses or decreased household incomes, not to mention the added stress of worrying about being sick. It is very important that employers survey their staff to understand their needs. Designing benefit programs that give employees choices and communications that are customized to their needs is more important than ever.
HRE: How can financial wellness programs work hand in hand with other wellness approaches and benefits strategies to advance holistic employee health?
Gopnik: People’s finances are inextricably linked to their health and to their career development. In order to be financially healthy, they need to be mentally and physically healthy and have a clear path to career growth. Employers who can reduce the complexity of their benefit offerings and emphasize this interconnectedness will see a greater positive impact. For example, at the time of your health insurance open enrollment, make sure your employee assistance program provider knows about the options that employees are considering. You can go one step further and provide a link to your EAP if they have financial advisors or have them sponsor information sessions about the financial impact of different health insurance options. Another example is linking promotions to your financial wellness benefits. Our research shows that employees are open to rethinking their financial behaviors at the time of a raise and so every communication about a raise should include an easy way to add, or change, how much money is going into a savings plan through split deposit.
Click here to register for the free, virtual Health & Benefits Leadership Conference.
