Why does your company give employee benefits? It’s not because it’s a nice thing to do. Employers offer health insurance, 401(k) plans, and other employee benefits because they want to keep people healthy and happy, so they can stay on the job and keep working hard. Good employee benefits packages also help companies stay competitive in the market for talent, so the companies can keep attracting and retaining good employees. (And there are tax benefits for employers, too.)
Along with recent talent shortages and challenges in hiring (and retaining) qualified people, some companies are getting more creative with employee benefits. Along with health insurance, a dental plan, and a 401(k) match, many companies are starting to offer financial wellness programs. These programs are coming at a time when more employees are feeling financial stress and anxiety from rising inflation and other economic concerns. According to the Bank of America Workplace Benefits Report, as of June 2023, only 42% of employees — and 38% of women — felt “financially well.”
When people are worried about money, they often struggle to bring their best efforts to work. Companies that offer better financial wellness benefits are likely to see better loyalty from employees, and better productivity.
Let’s look at a few intriguing financial wellness benefits that companies might offer in 2024.
1. Emergency savings accounts
Many companies offer 401(k) plans, and saving for retirement is all well and good. But what if you need money right now? What if you’re one of the 63% of American employees who don’t have $500 to cover an emergency expense?
SecureSave is a company that works with employers to help employees build emergency savings. When a company signs up for SecureSave, the employer helps employees set up emergency savings accounts with regular deposits from their paychecks. Employers can also choose to put sign-up bonuses and matching amounts into the employees’ savings accounts, in the same way as a 401(k).
Employees who participate in SecureSave emergency savings accounts have saved an average of $1,000 in one year, according to the company’s data.
2. Financial advice and coaching
Many aspects of personal finance are too complex and emotionally fraught to handle alone. Having a professional financial advisor by your side can help you navigate tough choices and understand your path forward. Some employers offer free financial advice or retirement planning, such as an annual meeting with a financial advisor to help review your 401(k) plan and investments.
Another option for financial advice in the workplace is Financial Finesse, a company that works with employers to set up financial coaching programs as part of an employee benefits package. With Financial Finesse, employees get free access to financial coaching from Certified Financial Planner (CFP®) professionals. The CFP coaches are unbiased — not selling anything — and help employees at all income levels, not just higher-earning executives.
Financial coaching can make a life-changing difference for people at all levels of income and walks of life. Watch for more companies to offer financial advisory services as an employee benefit.
3. On-demand pay
Some employees struggle with the financial stress of not having enough cash to make it through the month, which leaves them vulnerable to expensive payday loans. Some banks are now offering early direct deposit so people can get paid two days before payday. In the same spirit of getting paid faster, a fintech company called Clair is helping employers offer “on-demand pay” as an employee benefit.
Clair is a banking app that helps employers set up programs for shift workers to get paid on demand — as soon as they finish a work shift. This benefit could be especially helpful for people who work in retail, manufacturing, warehouse, or logistics jobs where hours are unpredictable. As part of its “on-demand pay” programs, Clair also offers bank accounts through a partner bank. With these special Clair bank accounts, employees can get access to a 2% APY on their savings, and 3% cash back bonuses on everyday debit card spending like gas and groceries.
Bottom line: Handling your personal finances on your own can feel overwhelming, especially when prices are high and money is tight. Many companies are starting to explore new options for financial wellness benefits for employees. Your company might soon offer new programs to help you save money, get free financial advice, get paid faster, and improve your financial well-being in 2024.
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