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How Today’s Leading Employers are Tackling Employee Financial Stress

Peer150 Panel

Key Takeaways from the Salary Finance Peer150 Panel Session featuring PwC, Maestro Health, and Allbirds

 

On November 8th, Salary Finance hosted a panel session with thought leaders from PwC, Maestro Health, and Allbirds. The session was held during the Peer150 National Summit in California where the panelists were joined by over 200 HR professionals from the Peer150 network. The panelists discussed the employer’s role in financial wellness, the challenges of developing a financial wellness strategy, and best practices to building an effective strategy.

 

The discussion opened with a summary of findings from the 2019 PwC and Salary Finance surveys on employee financial wellness. Kent Allison, National Leader of PwC’s Employee Financial Wellness Practice, kicked off the discussion by sharing his findings.

 

Key Findings from PwC’s Employee Financial Wellness Survey:

 

  • 67% of employees are stressed about their finances 
  • 45% of employees have less than $1,000 saved for an unexpected expense
  • 59% of employees are carrying balances on their credit card
  • 49% of millennial employees carrying student debt of which 80% say it will have an impact on meeting their other financial goals 
  • 57% of employees have saved less than $50,000 for retirement plans
  • 27% of employees have taken money from their retirement plan for expenses other than retirement

 

Salary Finance also conducted a survey on employee financial wellness and found similar results. Dan Macklin, US CEO, Salary Finance took to the stage to explain.

 

Key Findings from Salary Finance’s Employer’s Guide to Financial Wellness:

 

  • 48% of employees are worried about money
  • 34% of employees are living paycheck-to-paycheck
  • 1 in 4 employees who live paycheck-to-paycheck make more than $160K per year
  • Financially stressed employees are 8.2x more likely to have sleepless nights
  • They are 4.9x more likely to experience diminished quality of work and 5.8x more likely not to finish daily tasks
  • They are 4.5x more likely to have troubled relationships with colleagues and 2.2x more likely to be looking for a new job
  • They are 3.4x more likely to feel anxious and prone to panic attacks
  • They are 4.0x more likely to say they experience depression 
  • They lose an additional 23-31 work days annually dealing with personal finances
  • All of this costs employers 11-14% of salary cost in terms of lost productivity and increased employee turnover

 

Fortunately, the survey also revealed that employers have the power to help and the vast majority (79%) of employees trust them to do so. The majority of employees (68%) feel that their employer cares about them and their wellness but employees are looking for more than a 401(k) plan. They want a benefit designed to help get them out of debt now vs. just save for the future. Dan Macklin offered four practical steps that employers can take to develop and implement a successful financial wellness strategy.

 

Steps to Develop and Implement a Financial Wellness Strategy

 

  1. Know your workforce and build a robust business case
  2. Focus on progression rather than perfection
  3. Communicate to build awareness
  4. Measure the impact

 

To explain further, each of the panelists chimed in with detail on how they’ve been able to successfully navigate employee financial wellness using these four steps.

 

  • Know your workforce and build a robust business case. Sheryl Simmons, Chief Human Resources Officer at Maestro Health, said she focuses on financial wellness because millennials are aging and in debt, but don’t know much about financial wellness. She was able to figure out the exact needs of her employees by conducting anonymous surveys and then tailoring programs based on her employees’ financial literacy level. She then incorporated financial wellness into her organization as a component of the overall holistic approach to wellness.

 

  • Focus on progression rather than perfection. Although it can be difficult to know where to start, you have to start somewhere. Evan Salisbury, Total Rewards and People Operations Director at Allbirds, had prior experience focusing on executive compensation and financial wellness programs in his previous roles, so he carried that over to his role at Allbirds. He first created an anonymous employee survey through which he found out that employees needed help with loans, tuition assistance, and student debt paydown. This lead him to launch a financial wellness program that includes Salary Finance, and is focused on getting his employees access to financial education and low-cost salary-linked loans. These loans, which have much lower rates due to the automatic repayment from salary, were a key solution to help employees pay down their debts and get into savings.
  • Communicate to build awareness. It’s important to create a comprehensive and ongoing communications plan to ensure your employees know about new benefits and how to access them (especially remote employees). Sheryl uses a multi-channel approach, which includes email, text, video, webinars, and marketing materials. She has a large population of remote employees so she makes sure to capture communication preferences during on-boarding and tailor the communications tactics to align with those.
  • Measure the impact. Because financial wellness is all about changing behaviors and taking action, it is very measurable, so Kent recommends a thorough measurement strategy for any employer implementing a program. Through data provided to him by employers, he is able to formulate a baseline as to where an employee is at from a financial perspective. He also uses that information to gain an understanding of what that is costing the company in terms of lost productivity, healthcare costs, turnover, delayed retirements, workers’ compensation, etc. One of his clients saw a double digit improvement year over year in their employees’ financial wellness scores, which equated to an estimated annual cost savings of $1.5 to $2 million per year for that employer.

 

 

Interested in learning more? Download the Employer’s Guide to Financial Wellness for help building your financial wellness strategy.

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