In her Hub International blog post, “Reduce Employee Financial Stress,” Heather Garbers acknowledges that employers already recognize that their employees are struggling financially – and that it is taking a toll not only on them personally, but also in the workplace. Financial stress can affect employees’ health as well as their presenteeism and productivity. This dilemma is making financial wellness an important added dimension of today’s evolving culture of well-being.
Now more than ever, there are innovative benefit options and strategies that employers can bring to the table to relieve the financial stress on employees – offered as either affordable employee- or employer-paid voluntary or group benefits. Garbers’ article highlights four strategies to strengthen the financial health of employees:
1. Employee purchase programs. The example Garbers uses is one where people are experiencing financial stress and are confronted with unexpected expenses – say a refrigerator dies or their child needs a computer for homework – and then they may take on high interest credit card debt or a payday loan. But, as she points out, through employee purchase programs they can avoid amassing high interest rate charges. Purchase programs allow employees to make online purchases for a number of brand name products and pay for them over time through either paycheck deductions or monthly bank drafts, with no credit checks, hidden fees or interest charges. Another advantage is the employers are not liable for payments but rather serve as a trusted sponsor and conduit, giving employees a useful option to meet their needs.
2. Student loan assistance. Today’s Millennials are challenged to get their lives going despite the crushing burden of student loan debt, and trust their employers for advice on how to manage it. Doing so will win the loyalty of this group of employees -- almost 90 percent would commit to their employer for at least five years in return for assistance in paying student loan debt. Offerings in this category by various vendors include loan analysis and repayment recommendations as well as refinancing or new load options. Some employers are making loan contributions.
3. Low interest installment loans and credit.
Another danger for financially stretched employees, according to Garbers, is the ease with which they can get payday loans or cash advances on their credit cards. The high interest rates may only worsen the vicious cycle of debt. There are services, however, that underwrite low-interest rate installment loans well below the going rates. Employers can sponsor the service at no cost as a voluntary benefit. Paycheck deductions help the employee manage the repayment at a far more responsible level than the predatory schedules required by payday loan providers.
4. Financial Planning and Wellness Services. Whether offered as one-on-one, personal coaching or online resources with interactive money management tools, Millennials, GenXers and Boomers all appreciate when employers offer resources to help them understand how to repair or build their credit and better manage their money. Garbers points out that employers can occupy a position of trust and cement long-term employee loyalty by sponsoring these services to help empower employees with their personal financial management.
So when you are thinking about your employees and their financial health, keep these four strategies in mind as ways to help ease their stress and provide them some financial flexibility.