It’s no secret that employee stress caused by finances can have a substantial impact on your business.
Compensation. Student loans. Retirement. Having enough money to take a vacation in order to post a finely crafted social media selfie with an exotic backdrop. All that stuff adds up.
So, what should HR professionals and companies do about employee financial wellness? What financial benefits should be offered? What financial wellness programs should be considered? What simple tips do the experts have to offer?
I spoke with a few companies focused on the financial wellbeing of employees at the 2019 SHRM Annual Conference & Exposition. Here’s what they had to say.
Employee Compensation
The market median should be at the beginning of your discussion about employee compensation, not the end.
With market pricing, so many organizations set the base pay for their roles at the market median, or 50th percentile, of the job and move on. But there are a million reasons why the market 50th might not be the right answer for every job in every organization.
Maybe you’re recruiting for an emerging hot job and need to pay a premium in your local pay market in order to land the best candidates. Or you’re promoting candidates internally from more junior roles and want to enable pay progression within their next job. You could have high turnover in certain jobs or departments. Maybe setting offers for new hires at the market 50th will create salary compression with tenured employees.
How you price your jobs should reflect your compensation philosophy, the pay markets in which you recruit talent in, and your organizational goals - not just the market median number in a salary survey.
- Sarah Reynolds, Vice President of Marketing, Salary.com
Student Loan Repayment Assistance
A growing number of HR and Benefits professionals are realizing that despite the record low unemployment rates and surging U.S. stock market, a growing percentage of their workforces are struggling with their personal and family finances. Based on current data, nearly 70 percent of U.S. households simply don’t have the means to handle an unexpected family expense of $500. And this financial stress is accompanying these individuals to their jobs each and every day, resulting in growing challenges with employee engagement, retention and ultimately performance. This issue of employee financial wellness is so acute due to the following drivers in front of us every day:
Cost of living has skyrocketed as an increasing number of workers and families have moved into the larger U.S. cities, far outpacing the growth in wages of our workforce, and
The costs of financing the education necessary to be equipped to participate in our economy have also skyrocketed, and has resulted in $1.6 trillion of student loan debt for more than 46 million U.S. consumers. This debt is increasingly difficult to service given the rising costs of living.
From my many conversations with HR professionals attending this year’s SHRM, it’s clear a growing number are determined to provide meaningful new employee benefits to help their workforces be better equipped to handle these profoundly difficult financial challenges, including a rapid acceleration of employers who are committed to launching a student loan repayment assistance benefit for their workforces. And their logic for prioritizing this new benefit is compelling; assisting that growing percentage of their workforce with one of their top three financial concerns has proven to be one of the highest return-on-investment (ROI) benefits they can offer their workforce. Simply put, when your employer provides a student loan repayment assistance benefit they are literally saving their average employee thousands of dollars in future interest payments and giving them back a meaningful portion of their financial life by eliminating years of future student debt payments. For the forward looking HR professional the future is quite clear, if they don’t help their employees eliminate their student debt burden those employees simply won’t find it affordable to continue to work for their company.
Scott Thompson, CEO, Tuition.io
Pay Frequency
The daily pay benefit is gaining momentum in the marketplace. MAGGIEs (millennials and Gen Z who get instant everything) and ERINs (employees requiring income now) are coming to expect it, and employers are coming to realize that it is a major competitive differentiator when it comes to attracting, engaging and retaining talent. It’s no longer a question of whether employers will come to implement a daily pay benefit, but rather when they will because having to offer this benefit is inevitable.
- Jamie McDougall, Marketing Director, DailyPay
Tuition & Student Loan Assistance For Mothers
Tuition and student loan assistance benefit programs can promote diversity and encourage women in the workforce.
Mothers who seek tuition assistance and student advising show their children it is important to set and pursue a goal. Even if it is difficult to go to school as a working parent, the lessons that are learned are valuable. As mothers use their employer tuition benefits and seek out other resources to help achieve their goal, their children learn to find solutions to obstacles. As mothers progress through their education toward the end goal, both they and their children reap the benefits. This creates a win-win for the organization, the employee and the employee’s entire family, increasing loyalty and commitment to the company.
Sara VanWagoner, Vice President of Corporate Growth, Edcor
Interested in learning more about employee financial wellness? Review SHRM’s vendor directory of compensation companies, or jump in the conversation on social media by following SHRM.
Brett Farmiloe is the Founder and CEO – and currently CHRO - of Terkel.io, a platform where business leaders can answer questions related to their expertise and get published in articles featuring their
insights. Brett is a #SHRM22Influencers and has also been a keynote speaker at several state SHRM conferences around the topic of employee engagement.
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