The perfect labor market storm and the financial wellness benefits that can help employers weather it
A perfect storm has emerged in the job market: a nascent endemic, rising inflation and employees feeling the pressure and throwing in the towel. Standard benefits have been pushed into overdrive, with HR professionals becoming extremely creative in how they attract potential employees and retain existing ones.
While the Bureau of Labor & Statistics and other research entities tell us what has changed in the job market and predict what may be on the horizon, one thing has remained constant: financial stress.
More than half (51%) of full-time employees expected their level of financial stress to be the same or worse in January 2022 than in January 2021, according to a 2021 study by Harris Poll on behalf of Purchasing Power. And it’s not just employees with lower household incomes who said their level of financial stress would be the same or worse. This was true for employees at all household income levels, including 59% of those earning more than $75,000 and 49% earning more than $100,000.
Today’s employee is looking for employers who offer competitive wages and salaries, better benefits, a balanced life and a way to manage financial stress. To stay competitive, employers need to consider all aspects of what can contribute to a person’s financial situation over the course of their lifetime: unexpected or unexpected expenses, or ongoing financial hardship.
This includes everything from retirement benefits, tuition reimbursement, loan assistance, and more. Here’s why:
Employee financial stress impacts employers – and ultimately the bottom line.
A recent study by John Hancock found that the cost of financial stress per employee increased by 26% during the pandemic. And employees who suffer from financial stress admit that it affects their work. In the Harris Poll, 33% of employees said financial stress affects their physical health; 24% said it affected their ability to concentrate at work; 21% said it affected their productivity at work; and 21% said it affected their job satisfaction.
The labor market currently favors employees – who expect more.
The Great Resignation may not end any time soon. In a Harris poll for CareerArc released in December 2021, 23% of employees said they plan to quit their jobs in the next 12 months, and the reasons may be surprising.
According to PwC’s August 2021 Pulse Survey, the top two reasons employees leave are: better wages/salaries and better benefits. Employers, on the other hand, believed that the two main reasons were better wages/salaries and job flexibility. They ranked the best benefits #4.
Even slight tweaks and tweaks to benefits can be a game-changer when it comes to recruitment and retention efforts.
Employees say financial wellness benefits are important.
Employees are looking for a solution and expect their employer to help them, according to the Harris poll for Purchasing Power:
- 78% of full-time employees said they can tell how much their employer cares about their financial well-being by the benefits they provide.
- 79% said they would be more likely to stay with their current employer if they offered more financial benefits.
A better work experience is another reason employees change and leave their jobs. They want a better work-life balance, more family time, and an environment where they feel valued. One of the factors that indicate how valued employees are are the benefits offered by employers, including financial wellness benefits.
Where do voluntary benefits come from?
Many voluntary benefits can be added to the benefits package at no cost to the employer. This is an ideal time for employers and benefits brokers to consider the overall financial well-being of the employee; conduct a financial well-being benefit assessment; and potentially make changes at low or no cost based on direct employee feedback.
The Harris Poll asked employees what financial wellness benefit(s) they would be interested in taking advantage of if offered by their employer. Here is their response:
- Employee Purchasing Program, which includes the ability to purchase consumer products and services from a supplier directly through an employer and then pay for them over time through payroll deductions without interest: 28%
- Bill payment programs, where an employee can make their recurring monthly bill payments through payroll deductions: 27%
- Financial advice, where the employer provides in-person and/or group education and counseling services by financial professionals: 24%
- Low interest installment loans: 24%
- Identity theft protection: 23%
- Medical deductible financing that could allow the employee to obtain a low-interest loan to cover the deductible and then make monthly payments to pay it off: 20%
- Student Loan Repayment Benefit Program: 15%
With the availability of a variety of voluntary financial wellness benefits that can be added to the benefits package at no cost to the employer, there’s no better time than now for employers to do so. do…and show that they care about their employees financial well-being.
Michael Wilbert is Chief Revenue Officer at Purchasing Power, a voluntary benefits provider. He has 30 years of experience in the insurance and voluntary benefits industry.