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American workers are financially stressed and employers are starting to listen to them.
Whether it’s a response to the Covid-19 pandemic, the threat of losing employees during the Great Resignation, or something else long in the works, there has been an increase in benefits of financial well-being offered by companies, recent surveys revealed.
This year, 46% of Bank of America employers Workplace Benefits Report said it offers the programs, up from 40% in 2020. The finance company surveyed a national sample of 1,363 full-time employees.
During this time, a survey by the Society of Human Resource Management and Morgan Stanley at Work revealed that 26% of human resources professionals said they had added benefits or extended existing benefits to help employees manage their financial stress since the onset of Covid-19.
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That still leaves nearly three-quarters who haven’t. Still, a majority of employees want the benefits, SHRM and Morgan Stanley have found. The survey was conducted in June and included 1,205 human resource professionals, 1,000 working Americans and 1,000 unemployed Americans.
Benefits in question include financial coaching, student loan assistance, emergency savings assistance, and financial planning, in addition to more traditional benefits such as 401 (k) retirement savings plans. .
Providing these benefits could be key to recruiting and retaining employees at a time when many workers say they want to leave their jobs. A separate SHRM survey found that 52% of workers are considering such a move.
“Thinking about it from a human resources objective – I want to be able to attract talent, retain talent, allow people to fully develop [and] increase productivity, ”said Krystal Barker, head of financial wellness at New York-based Morgan Stanley at Work, which helps companies with their financial wellness programs.
“Financial wellness has the ability to do all of the above.”
For example, a large manufacturing company that works with Morgan Stanley at Work faced stiff competition for its middle managers and feared losing employees. The company implemented a financial wellness program that included individual financial planning.
“Financial well-being was a nice benefit,” Barker said. “It is now becoming evident that this is an indispensable benefit.”
That’s what officials at healthcare provider Northwell Health achieved in 2018, said Diana Grubard, the company’s director of benefits. And it’s something that helps the firm stand out during the current Great Resignation. The financial wellness benefits for Northwell Health’s 77,000 employees were rolled out earlier this year, after being delayed by the pandemic.
“Our consistent long-term focus on wellness allows us to differentiate ourselves in this environment,” said Grubard. “This is what we use to attract and retain our talent.
Doctors perform a liver transplant at North Shore University Hospital in Manhasset, New York. The hospital system, Northwell Health, provides financial welfare benefits to its employers.
Northwell Health, which recently made the headlines when it laid off 1,400 unvaccinated workers, offers digital education in the form of videos or articles, financial webinars and financial planning, which allows employees to meet one-on-one with professionals.
The benefits are clear and outweigh the costs of the program, Grubard said.
“Think about how it feels when you are financially stressed and how this leads to anxiety, depression, weight gain and underlying health issues, which lead to increased blood pressure. absenteeism and lower productivity, ”she said.
“We need our employees to be at the bedside,” she added. “We need them to provide the best care for our patients and the community.”
The data supports this view.
Workers with high financial stress are twice as likely to use sick leave when they are not sick, with 48% of stressed workers using sick leave versus 24% of unstressed workers, a Lockton Pension Services Survey of 613 people across the country found.
Then there is the time spent during working hours dealing with personal money matters. Workers with low financial literacy spend an average of six hours per week at work solving financial problems, compared to one hour per week among those with high financial literacy, the Personal Finance Index 2021 TIAA Institute-GFLEC find.
If you multiply the time spent at work dealing with financial issues by the salary, companies will see the value in providing financial education, said Annamaria Lusardi, professor at the George Washington University School of Business and founder and academic director of GWSB. Global Center of Excellence for Financial Literacy.
“It’s a win-win,” she said.
To create a strong financial wellness program, employers need to take a holistic approach that includes not only retirement savings, but also emergency saving, debt management, and financial education. , among others, she said.
“A good program starts with the basics,” noted Lusardi, CNBC Invest in You Financial Wellness Council member.
For example, 40% of non-retired adults do not have enough non-retirement savings to cover a month of living expenses, according to the TIAA Institute-GFLEC Personal Finance Index.
Certainly, financial stress and anxiety existed long before the Covid-19 pandemic. A 2018 to study by the Financial Industry Regulatory Authority’s Investor Education Foundation, the most recent, found that 53% of Americans said their finances made them anxious, and 44% felt discussing their finances was stressful. The pandemic has exacerbated this for many, especially women and people of color.
“After a pandemic, we need to take even better care of our finances,” Lusardi said. “Most of us have really suffered from this pandemic.”
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Disclosure: NBCUniversal and Comcast Ventures are investors in Tassels.