A Benefits Redesign might be what your company needs! Financial stress is a big concern for employers. Inflation is on the rise, and many Americans are dealing with financial anxiety and stress. Employers who want to recruit and retain top talent in today’s ultra-tight labor market must consider implementing a “financial security” strategy – benefits redesign can help employees feel like they have a solid handle on their finances. This also helps them be more focused and productive at work.
Helping employees feel more financially secure is a challenge, particularly for those earning lower incomes, but there are proactive ways employers and financial professionals can address it. According to a recent article in Employee Benefit News, benefits and payroll should revolve around three goals:
- Pay people, accurately and quickly
- Help employees prepare for retirement
- Protect workers’ families in case of illness or death
However, as the article pointed out, standard benefits such as a retirement plan, life and disability insurance, and health insurance don’t address the financial concerns of workers living paycheck to paycheck. In reality, many workers may not be eligible for, or be able to afford, even these benefits, resulting in a solid gap in financial wellness.
The article focused on two critical areas where employers and financial professionals can move the needle significantly: Payroll and retirement tools to foster near-term and long-term financial security. With regard to payroll, employers have an opportunity to help employees leverage emergency savings to achieve near-term financial security, which in turn leads to longer-term financial stability. However, this alone won’t address the financial wellness divide.
For their part, retirement plans are important, but it may be even more critical for employers and financial professionals to help employees focus on short-term savings, as studies have shown that it has a strong correlation to retirement savings. Recordkeepers may be integral to this shift, according to Employee Benefit News. They can help employees build short-term savings by delivering products that facilitate those behaviors and habits. Employers and financial professionals can do their part by updating outdated messaging regarding retirement plans being used to build long-term wealth, and instead focus on near and medium-term goals that may be more aligned with employees’ values, and may appear more realistic.
Financial security benefits are no longer a “nice-to-have”. They are becoming a priority for many workers, and employers and financial professionals should respond in kind. “By rethinking the role of payroll and retirement, considering the features offered, and adding strategic messaging around these process-driven functions, payroll and retirement tools can be foundational for a holistic financial security strategy”, according to Employee Benefit News. Reducing financial stress is a win for employers and for employees. A good benefits redesign can positively impact productivity! Benefits redesign can also reduce absenteeism and turnover, which in turn can help improve the bottom line.
