The heightened frustration around the rising cost of living in the US is unmistakable and likely felt in your organization. Extreme healthcare costs, massive student loan debt, and rising housing costs have put an enormous strain on the American workforce.
In a study on employee financial wellness in 2019, it was found that the leading source of employee stress across generations stems from financial issues. Even during the record-high employment of last year, employees were still struggling to meet rising financial demands across the board. In 2019, nearly half of all employees struggle to pay their household expenses on time each month. More and more people are expecting to work into their retirement to pay for healthcare and living costs. And now, with families struggling from the economic blowback of the pandemic, it’s gotten harder.
So what does this mean for employers trying to attract, retain, and care for their talent?
It’s an opportunity to find ways to empower and support your employees financially.
“You mean, besides paying them?”
Believe it or not, compensating your employees is only one way you can help them become financially stable. There are many ways to provide financial support services to your employees, but it’s critical you understand the particular needs of your workforce. What might be right for a start-up tech company may not work for a retail store or small marketing agency.
To identify what services are right for your employees, it’s always a good idea to start by asking them! Conduct an internal survey to pinpoint where your employees need help. You can decide how to best address the needs once you know what they are.
There are a few common financial pain points, however, that you can expect to find in most communities. Here are some ideas to address them.
1. Planning and saving for retirement
It isn’t far-fetched to assume that everyone—really, everyone—wants to retire someday. And with 80% of people expecting to work during retirement, you really can’t go wrong by providing an opportunity for your employees to get in (or ahead of) the game. Tax breaks are available to businesses offering 401k matching plans to their employees, which helps mediate the overall cost of set-up and maintenance.
To those employees you’re hoping to attract and retain, offering a 401k plan with matching contribution says you care about their future and are willing to invest in it. Doing so will help build loyalty to your company and will play into a company culture that values the empowerment of its employees.
2. Getting them out from under student debt
It’s widely known in the US that student loan debt has increasingly damaged people’s ability to thrive. It’s common to hear about graduates working extra jobs, moving back home with their parents, and living in poverty to pay off their bills. Here’s what the numbers tell us:
- In 2019, the total amount of student loan debt exceeded 1.5 trillion dollars.
- Between 2006 and 2016, the average debt of a graduate borrower increased by nearly 80%.
- 44.5 million people across the US carry student loan debt.
Ok, so these numbers are pretty scary. Thankfully, there are ways employers can help support those employees who are struggling to pay off their student loans. Two options are Student Loan Replacement Plans (SLRPs) and student loan matching programs. Do your research on the available options to make sure the benefits program you choose is right for your particular employee population.
3. Offering short and long-term disability
Statistically, a quarter of all adults in the US will live with a disability in their lifetime. Offering long and short-term disability benefits can play a critical part in your employee benefits strategy. However, it’s essential to understand the different programs available and exactly how they provide support. Not all plans are created equal. For instance, STD and LTD programs define disability in a variety of ways. Some follow the definition followed by the Americans with Disabilities Act (ADA), which is more rigid, where some have a broader and more flexible definition, allowing a more comprehensive range of people to access support.
Help drive positive change
Whatever options you choose for building a financial support system for your employees, make sure you communicate with your employees about their level of need and interest and do your research accordingly. Providing relevant and easy-to-use solutions will make your employees feel supported and cared for.
Whether you choose a benefits package to help employees with student loans, get the upper hand on retirement savings, or offer financial protection in a time of need, you're showing employees you're invested in their well-being and care about their future success.
People want to work for a company that wants to see them succeed. There's no better way to show your employees they are valuable than offering benefits that will provide real value to them. It's not just good for your company culture and brand image; it makes a positive and lasting impact on the lives of the people working for you. Now that's real value.
Recruiting and retaining employees is easier when you can proudly offer a comprehensive benefits plan that makes your team members feel as valuable as they are. At Raffa, we build cost effective, long-lasting employee benefits strategies to keep your business and your employees in optimum health.
Photo by Nuthawut Somsuk