While employers can’t guarantee that their employees will never encounter financial difficulty, there are steps you can take to help your employees protect their finances, prepare for the unexpected, and plan for the future. Many employers focus on salary as a means to ensure the financial health of employees and health insurance as it is usually the costliest employee benefit, but it takes more than just a competitive salary and health insurance to guarantee the happiness and well-being of employees. What these benefits look like varies from employer to employer. To make a true impact that improves retention, productivity, and overall performance, benefit offerings should extend beyond fair pay and health insurance and address the unique needs of all of your staff, including your executive staff.
Supplementing your compensation package with financial preparedness benefits may enhance employee retention. Data shows that employees who are satisfied with their benefits and prepared for life’s challenges feel more loyalty toward their employer. MetLife’s U.S. Employee Benefits Trends Study revealed that employees who were satisfied with their benefits were 70% more likely to be loyal to their employer, while 73% indicated that a wider array of benefits would make them continue working at their current employer longer.
When crafting financial health benefits, it is important to consider the diverse needs of your whole workforce. To ensure that your employees utilize and value financial preparedness benefits, offer a host of options and let your employees elect which they want to use. When limited financial health resources are available, many employees won’t take advantage, which often leaves employee financial needs unmet.
Financial health and preparedness benefits employers
When employees are more financially stable and prepared, they are more likely to be productive, engaged, and happy, which has a direct impact on overall company performance. Here are some of the ways employee financial health initiatives benefit employers:
- Improved employee well-being and productivity: Employees bring their financial stresses to work. These distractions can add up and reduce employee productivity. According to PwC’s 2023 Employee Financial Wellness Survey, among financially stressed employees, 44% at the time said personal finances had been a distraction at work. Helping employees manage their financial health reduces stress and can improve their performance.
- Increased retirement plan participation: Retirement plans require effort and funds from employers, but employees are unlikely to take advantage of these plans when they don’t understand how they work. Prioritizing financial health and literacy among employees helps more employees see value in their retirement plans. This increases utilization, making your retirement offerings more cost-effective.
- Brand reputation and talent attraction: By showing employees that their financial health matters to you, you gain a competitive edge when hiring and demonstrate your organization’s appreciation for your workforce.
Financial literacy is an important aspect of an employee’s financial health, one that employers have the power to directly influence. Ask your Risk Strategies representative for more information or download our white paper, Financial Literacy & Employee Financial Health – Key Strategies for Employers.
With more than 10,000 clients managed in our National Employee Benefits Practice, Risk Strategies delivers the high-quality, cost-effective, and compliant benefits programs and solutions employers need and employees value. Visit risk-strategies.com for the latest observations in employee benefits.
