Employees have financial obligations year round, but discussions around financial literacy and employer-provided savings options often begin and end at open enrollment.
According to a study by Fidelity Investments, 66% of Americans are considering a financial resolution this year, and a recent survey shows that 31% are looking to build their emergency funds. However, the vast challenges faced by workers today — healthcare costs, inflation, economic uncertainty, debt — have left many feeling too stretched to save.
“We are in a high-inflationary environment, and that hurts the pockets of everyday American employees,” says Barrett Scruggs, VP of employee financial well-being at financial benefit company SoFi at Work. “Savings are getting depleted, and student loan payments are going to restart very soon.”
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This is where employers come in — and where they should reprioritize communications. A crucial step, Scruggs says, is developing overall well-being packages based on the specific issues that a workforce is facing. Potential wellness assessments or employee surveys are a great place to start, he says, and financial benefits firms can be brought in to gather quantitative feedback and offer consultative methods, which can help determine impactful financial benefits offerings.
“Salaries and 401k benefits are the bedrocks of financial wellness in the workplace,” Scruggs says. “From there you start to get into things like access to financial planners and financial education literacy content that is relatively cheap and low maintenance. But then you get all the way to the other end of the cost spectrum — things like student loan repayment programs — where you are deciding to invest more dollars. It’s evaluation of the strategic talent priorities, a budget that can fund those priorities, and then working with the right vendor to craft the right package.”
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Though he acknowledges there is increased focus on bringing benefit types to the attention of employees, Scruggs points out that more effort needs to be put into making this an ongoing process within the workplace.
“Companies need to realize that open enrollment campaigns aren’t enough, especially for some of the voluntary benefits that are not highlighted well,” he says. “An ongoing communication and engagement strategy needs to be established with vendors in order to educate your workforce on the available benefits and why they matter.”
Voluntary benefits, such as tuition assistance, pet insurance, financial coaching and emergency savings funds are examples of what may appeal to employees based on their personal circumstances. Not only do they add to a company’s employee-focused image, but they can be great tools for recruitment and retention of talent.
“There are new innovations around the old tuition reimbursement model that are really interesting,” Scruggs says, “and these programs are basic ways to invest in the development of your workforce and their skill sets. On top of that, student loan assistance programs are incredibly useful, and all of these fall under the same tax code benefit — it’s been much more compelling for companies to offer both under the same umbrella.”
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When it comes to helping employees make good financial decisions, a combination of digital and human advice and guidance is most effective, Scruggs says. The people involved can include advisers and coaches, but he emphasizes that company leadership should be equipped to discuss finances with their team.
“Frontline leaders need to feel empowered and comfortable talking about personal finances and then connecting back to the resources the company makes available to help,” he says. “This has real financial impact — productivity, engagement, retention — and it allows a company to put their money where their mouth is and advance the values it tries to embody.”