Brought to you by LearnLux, HR Tech Pitch Competition finalist advancing to the final round of the alongside three other finalists pitching live at both HR TechXpo San Francisco on July 18th, as well as HR TechXpo Seattle on August 21, 2019!
Love it or hate it, our modern world revolves around money. That’s why it’s so surprising that most of us were never taught about personal finance in school.
Sure, we somehow remember that the mitochondria is the powerhouse of the cell, but when it comes to compounding interest? We don’t feel so confident — and your employees feel the same way.
That’s why it’s no surprise that financial wellness is the most asked-for benefit in the modern workplace.
A recent survey conducted by PwC confirms what HR has been hearing all along; 55% of employees say they want help managing their finances, while a staggering 83% agree that employer sponsored financial benefits are critical to their financial security.
So, besides the widespread need for basic financial literacy, what are the main factors that have made financial wellness the most asked-for benefit of 2019? Here are the major trends at play.
Few Employees Have a Financial Advisor
We see a doctor for our physical health, a therapist for our mental health, but for our financial health? Most of us are on our own to manage our money — and not because we don’t want to consult an expert, but because we can’t.
The financial advisor model is incredibly old school, and caters to just the wealthiest among us. Some advisors require a crazy minimum balance, such as $250,000 in assets to manage, which makes it no surprise that 75% of Americans are flying solo.
This leads to an increased population of middle to upper class workers who are high earners but not rich yet, and need help ASAP when it comes to understanding their money and building financial confidence.
Many Are Drowning in Student Debt
Before their first paycheck even hits the bank, many recent grads are in debt up to their eyeballs. And for employees of all ages, high monthly payments on student loans could be making rent, car payments or even a mortgage seem like peanuts.
As total outstanding student loans climb past the $1.5 trillion mark — nearly 3x what it was just 10 years ago — the stress and strain of student is keeping your employees up at night.
Savings? What Savings.
In our consumer driven world, you’re much more likely to overhear an employee compliment a co-worker on their new shoes than on their savvy ability to save. While your organization may look financially healthy, these status symbols (fancy clothes, cars, and vacations) can often be signs of folks living outside their means.
It may come as a surprise, but Forbes reports that 63% of Americans don’t have enough savings to cover a $500 emergency. That means resorting to measures like charging a credit card, getting a payday advance or even drawing from their 401k. Yikes.
Retirement Readiness is Lacking
Back in the day, penchant plans gave hard workers peace of mind. Today? Not so much. Your employees now have two jobs — making their money, and then managing it for the future.
Without guidance along the way, many employees veering off track, which is why 72% of employees across Gen X, Millennials and Boomers say they’d like to receive more information from their employers about how to achieve their retirement goals.
Instead of answering the same questions about contribution limits and employee matches a million times, employers are turning to financial wellness solutions to help save time and arm their team with the info they need on-demand.
Most Employers Don’t Offer Financial Wellness… Yet
When it comes to creating a positive relationship between their employees and their paychecks, most employers focus on open enrollment education and the occasional lunch and learn. That’s just not cutting it anymore.
According to a new report from MetLife, only 1 out of 5 employers offer a financial wellness program, despite the pressing need for this benefit as part of a holistic employee health strategy. Meanwhile, 91 percent of employees who participate in financial wellness programs say those resources have helped them.
Employees are asking, and innovative workplaces are starting to listen. Given the trends listed above, the best workplaces are starting to implement financial wellness programs to increase employee productivity, drive 401k opt-in and contribution, and win the war on talent.
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