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How much is Workforce Financial Stress Costing Your Organization?

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Financial stress levels for the American worker are at an all-time high.

As employees struggle with issues like increased expenses and low income, their health, productivity, and overall well-being suffer severely — and impact their engagement at work. These high financial stress levels also come with a steep price tag for companies. 

According to research featured in Forbes, 80% of employers report that financial stress lowers their employees’ performance levels. Workforce financial stress more broadly costs employers nearly half a trillion dollars annually.

From employee retention to healthcare, financial stress and vulnerability represent real dollars in addition to erosion of workforce well-being and culture.

The cost of financial stress

Based on hundreds of employer conversations and seven years of consumer research, our team at Sunny Day Fund has identified five main factors driving extra expenditures related to your employees’ financial stress:

  1. Cost of employee turnover
  2. Cost of lost productivity
  3. Cost of absenteeism 
  4. Cost of healthcare
  5. Cost of administering loans and withdrawals

The following “Cost per Employee” in each section is based on annual wages of $36,000 (the latest estimate of median wages in America and in line with what most frontline employees now earn). 

1. Cost of employee turnover

Cost per Employee: $12,000

In the midst of the Great Resignation, business leaders are asking themselves how they can better retain their talent. According to PwC, nearly three in four financially stressed workers said they’d go to another employer that cares more about their financial well-being. 

When an employee leaves, the employer pays the bill in multiple ways:

  • Overtime and agency costs. These are the temporary costs associated with employee overtime or hiring a staffing agency to replace lost capacity when an employee leaves.
  • Hiring costs. Hiring costs include posting on job sites, working with recruiting agencies, and conducting interviews and background checks. It takes at least one to two months to hire a new employee and onboard them. 
  • Onboarding and retraining costs. Onboarding costs are what it takes to get an employee to full productivity, such as another employee training them. This process can take at least six weeks to several months. 

According to one study, employers spend between 33% and 150% of a worker’s annual salary during the replacement process. On the low end, all of these costs equal roughly ⅓ of an employee’s $36,000 annual income or $12,000.

Unfortunately, employees are currently leaving jobs in droves, with 55% of workers likely looking for a new job in the next 12 months. If only three entry-level employees leave your organization in one year, you’ll pay $36,000 — or an entire employee’s salary in costs!

2. Cost of lost productivity

Cost per Employee: $3,000

Nearly half of surveyed employees say that finances — worrying about paying bills, for example — have been a distraction at work, impacting their productivity. 

The lack of productivity adds up. PwC found that employees who are distracted by their finances at work spend three or more working hours each week or 156 hours per year thinking about or dealing with issues related to finances. At $18 per hour, that lost productivity translates to $3,000 on the low end for one financially stressed employee in one year. 

This lost productivity is further reflected in a recent randomized control trial performed in India. Behavioral economists placed a disposable plate factory’s employees into two groups. The only difference between the two groups was that one was more financially unstable than the other. 

The study found that the less stressed and more financially stable group produced 6.2% more plates in the exact same amount of time than the financially stressed group.

Financially stressed employees are literally less productive as they have money — not work — on their minds. Their lack of focus can also impact their quality of work. 

For example, if an employee is distracted at work, accidents can easily occur. In fact, 60% to 80% of on-the-job accidents are stress-related. One workplace accident can cost an employer up to $42,000!

3. Cost of absenteeism

Cost per Employee: $750

How many times have you received a phone call from an employee saying their car broke down, or that they were struggling with some other financial emergency? Absenteeism (aka not showing up for work) and tardiness can also stem from financial vulnerability. 

The Center for Retirement Research at Boston College discovered that employees miss 3.5 days annually because of financial stress — twice as many days as unstressed co-workers. 

Because employers have to pay overtime or agency costs in these situations, the cost of these missed days can be $750+ per year for one employee (not including tardiness). 

4. Cost of healthcare

Cost per Employee: $1,700

When employees don’t have enough money in their bank accounts, they don’t prioritize preventative health care expenses for things like “tweaked” ankles and chest pains. But this lack of healthcare can be detrimental.

A sprained ankle might not seem worth the $600 bill it would take to get a better cast or an X-ray. However, by not getting actual treatment or medical advice, an employee’s condition can become serious and increase healthcare costs later on. As a result, your employees may be footing a much larger bill later on at the ER.

Without counting the costs of employer healthcare coverage, productivity losses related to personal and family health problems cost U.S. employers ~$1,700 per employee per year, according to the CDC.

5. Cost of administering loans and withdrawals

Cost per Employee: $400-$600

Last, but not least, are the costs associated with administrative tasks carried out by other members of your organization to assist employees who are struggling financially. 

From talking with hundreds of employers, we know that HR and benefits personnel spend lots of time processing hardship loans and withdrawals out of retirement savings programs like a 401(k) or 403(b), or a direct emergency loan that’s later garnished from wages. Financially stressed employees are likely to cash out what they have in their 401(k) just to make ends meet (fact: 30% of workers dipped into their retirement funds during 2020). 

Not only does this practice hurt your employee’s future, but it’s also expensive for your HR teams to administer. Our research found that personnel spent roughly 8-12 hours each time an employee needed a loan or a hardship withdrawal. This time translates into $400-$600 per occurrence. This does not include additional loan processing or transaction fees that can be an extra $75 to $250 per loan.

According to Sunny Day Fund research, employers report that about 20% – 30% of 401(k) or 403(b) participants have hardship loans or withdrawals. Considering the above costs, this could mean an additional $100,000 of spend associated with emergency loans and withdrawals for a 1,000-employee organization!

And let’s not forget – the more time those HR team members spend on these administrative tasks, the less time they have to grow the organization and its culture, and the more stressful it becomes for the HR employees themselves. 

Invest in your employees’ financial well-being with better financial benefits 

If all five of the above situations manifest themselves with one financially stressed employee, it could cost your organization up to $18,000 annually. And that’s on the low end. It could be much higher depending on the employee’s salary and financial issues. 

Armed with knowledge about the costs of financial stress, take action by implementing appropriate financial benefits.

These financial benefits should go beyond a 401K. Consider emergency saving programs and customizable, quarterly rewards to build employee saving habits. The investment in these plans is worth it. For example, an employer using Sunny Day Fund’s emergency savings plan experienced a roughly 20% higher retention rate compared to industry peers. 

Want to lower your own costs and help your employees improve their financial well-being? At Sunny Day Fund, we offer a customizable employer-rewarded savings program to help you engage your employees. Reach out to us at contact@sunnydayfund.com and ask about our workplace emergency savings plans.

A 401(k) Might Not Be Enough for Your Employees. Consider Workplace Emergency Savings.

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Stressed About Money

Next to healthcare, most people immediately think of retirement savings when they think about employee benefits.

According to the U.S. Bureau of Labor Statistics, 67% of American workers have access to retirement savings benefits like 401(k), 403(b), and pensions. And with state-facilitated retirement programs like VirginiaSaves on the rise, that access is bound to increase. 

But while employees might be gaining more access to retirement savings benefits, many continue to struggle with more immediate financial needs, resulting in lower 401(k) participation and more hardship withdrawals and loans. This is especially true in the service sector where workers are disproportionately women and minorities, and earn lower wages across the board. 

Employers consider retirement savings as a key pillar of their compensation and benefits strategy, designed to attract and retain people. But if these people don’t participate or continue to take out money, is it working?

One solution to the problem is to offer workplace emergency savings plans in addition to retirement savings benefits. This powerful combination bridges the gap between employees’ immediate financial needs and their future financial goals. At Sunny Day Fund, we believe this benefit serves as a “muscle builder” for saving behaviors and drives employee retention. 

Where retirement savings fall short

At first glance, it would seem that retirement savings programs benefit all workers.

After all, almost everyone retires one day, no matter their different life journeys. That’s why offering a 401(k) benefit – which, for the purposes of this article, includes similar programs like 403(b), SIMPLE IRA, etc. – is a top priority for most employers as a way to attract and retain employees. But, when we dig in, significant gaps arise about who is participating and who is making the most premature withdrawals.

Let’s first acknowledge that nearly 50 million Americans lack retirement savings as a benefit. 

And most people are focused on immediate financial needs, even though they acknowledge retirement is important. According to AARP, eight in ten (83%) workers say that it is very important to them to be financially secure in retirement. However, only one in three (34%) say that they are very likely to achieve this because they lack money and have urgent near-term expenses.

There are also 401(k) gaps when it comes to race, ethnicity and income. The Employee Benefit Research Institute’s (EBRI) 2021 Retirement Confidence Survey: A Closer Look at Black and Hispanic Americans found that actual total retirement savings and investments are very different between different racial and income demographics, as we covered in a prior blog.

For these employees, making ends meet (including things like a car breaking down or a family medical emergency) is more pressing than retirement savings.

[Source: GOBankingRates]

And for many, the need for emergency savings has only been heightened by the global pandemic.

Consider David Bakke, a freelance blogger, who had $6,000 saved before the pandemic. COVID not only hurt his business, but a surprise air conditioning repair cost him $3,000.

“[My emergency savings] was a little low to begin with,” he said. “Now, it’s almost nonexistent.”

The situation only worsens for those with lower incomes. Bankrate found that, after the pandemic, 75% of those with incomes below $30,000 a year were somewhat or very uncomfortable with their emergency savings. 39% of these lower-earning households had no emergency savings at all. 

Unexpected emergencies also damage 401(k) progress. During COVID, “nearly one in four (23%) prematurely dipped into their retirement savings or stopped contributing altogether during COVID,” according to AARP. 

And according to Sunny Day Fund research, most organizations we’ve spoken with said that about 20-30% of their plan participants have 401(k) hardship loans or withdrawals – a statistic that’s again more pronounced in lower-income and minority populations (similar to EBRI’s findings). 

To put this concept of hardship withdrawal into perspective, meet Emily – one of over a thousand employees we’ve talked with to understand the impact of financial emergencies.

Emily works in a regional clothing manufacturing warehouse. During a recent family health emergency, she needed to come up with $1,500 but couldn’t pull together this amount from the money in her bank accounts or family and friends.

So she turned to her 401(k), to which she had carefully contributed over several years. The $1,500 withdrawal represented nearly half of her entire retirement savings, and it turned into a little less than $1,000 after penalties, fees, and taxes. The process itself was arduous, with stressful emails and approvals from multiple people who now knew about her situation.

By dipping into their 401(k) early, people like Emily are left without enough to cover their emergency and they lose what they had in retirement savings. The vicious cycle continues. 

As an employer, it’s easy to assume that a 401(k) alone is enough to attract and retain talent. Unfortunately, that’s not the case for a lot of hardworking Americans. But there’s an opportunity to bridge the gap by combining the 401(k) with a workplace emergency savings program to most effectively engage and support your employees. 

What are workplace emergency savings programs?

Workplace emergency savings plans are programs sponsored by employers to help employees build unrestricted, easy-to-access savings. Ideally, it falls outside of traditional ERISA plans, and represents a win-win option for employees and employers alike.

Think of it this way: a 401(k) is a “set it and forget it” financial benefit – the goal of the money in a 401(k) is to grow over time. Emergency savings, on the other hand, is a “set it and tap it” benefit – the goal is to easily access the cash in case of emergencies, rather than the 401(k).

Both 401(k) providers and researchers agree that combining a 401(k) with a workplace emergency savings benefit is both effective and sustainable. For example, according to a study released in July 2021, by a research collaboration between Aspen Institute’s Financial Security Program, Morningstar, Defined Contribution Institutional Investment Association, and NORC at the University of Chicago , “households with at least $1,000 in emergency savings were half as likely to withdraw from their workplace retirement savings account.” 

Let’s go back to the example of Emily withdrawing from her 401(k) to cover a $1,500 emergency. Instead of dealing with burdensome withdrawal penalties and lag time accessing her 401(k) funds, she uses her new emergency savings and preserves her retirement assets.

You may be asking – does this mean that Emily is now contributing less to the 401(k)? No, Emily says she’d contribute at least $20 per weekly paycheck to a workplace emergency savings program, on top of her retirement contributions. This behavior is supported by what we’re actually seeing with users at Sunny Day Fund. Read out our post on the Child Tax Credit about the macroeconomic tailwinds that’re enabling people like Emily to do so too.

And let’s not forget – tapping these emergency savings is way less stressful, time-consuming, and intrusive than a 401(k).

This is excellent news for your organization because you have a new, impactful lever you can easily pull to help your company save money. According to SHRM, 80% of employers report that financial stress is lowering their employees’ performance level, and it’s costing them nearly half a trillion dollars annually. You and your employees literally save when your employees contribute to emergency savings!

In addition, not only are employees becoming financially stable (and dealing with less financial stress), employees are regularly reminded that their employer truly understands their needs. This increases employee retention and reduces turnover costs for you as an employer. 

The vast majority of employees are already on board. In fact, 9 in 10 working adults actually support workplace emergency savings as a benefit from their employers. Through a program like Sunny Day Fund, there are also no barriers for contributing to emergency savings so low-income workers can participate. This serves to further close the gap on 401(k) participation. 

How to implement these plans and track success

Start by measuring the financial well-being of your company through a financial well-being survey before the program is rolled out, which you can do easily with Sunny Day Fund’s Sunflower™ tool.

The results of this survey help you understand where your employees are struggling financially and what emergency saving goals make sense; all of which inform proper communication of a new workplace emergency savings program. 

Create a customized workplace emergency savings plan, or start with one of our recommendations, that considers workforce-wide strengths and opportunities for improvement. Critically, ensure this program is considered “out of plan” or outside of ERISA so that the funds remain unrestricted for employees like Emily who need easy access in case of emergencies.

Next, set up a simple payroll deduction that allows employees and employers to automate contributions into standalone FDIC-insured savings accounts with no minimums or penalties.

Offer incentives for employees to save. Over Sunny Day Fund’s Sunshine™ platform, employers typically reward up to $200-$600 per year per employee – and have used these rewards as an additional way to differentiate themselves in a crowded labor market.

At the end of the year, run the financial well-being survey again. Compare original survey results or the financial snapshot with current employee finances. You can also check your ROI to see how your company has benefited.  

Go beyond the 401(k) as a financial benefit

A workplace emergency savings plan isn’t designed to replace the 401(k). It’s there to build the muscle for saving and protect retirement savings. It’s structured so that earners of all income levels and backgrounds can access the program, supporting a more effective, inclusive financial benefits strategy to attract and retain talent across the organization.

You can enable your employees to create a safety net for themselves to overcome immediate financial challenges and achieve pre-retirement life goals. Once emergency savings are in place, these employees are equipped to also save for retirement more sustainably.

Want to help your own employees save and improve their financial well-being? At Sunny Day Fund, we offer a customizable employer-rewarded savings program to help you engage your employees. Reach out to us at contact@sunnydayfund.com and ask about our workplace emergency savings plans. 

Do You Believe in DEI Initiatives? It is Time to Follow Through

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DEI initiatives

By now, DEI (diversity, equity, and inclusion) should be more than just a buzzword for companies. And, on the surface, it looks like progress is being made.

For example, LinkedIn data shows there has been a 71% increase in worldwide D&I roles in the past five years.

But while many companies and HR leaders would agree that DEI is important, around 80% of companies are just going through the motions and not holding themselves accountable when it comes to DEI initiatives.

At Sunny Day Fund, we hold to the belief that sustainable DEI change requires both commitment and deliberate action; closing the gap to turn the intangible into actionable DEI initiatives and supporting equity and fairness in the workplace.

The gap with DEI initiatives

Companies aren’t seeing DEI change because there’s a “wide disconnect between doing DEI work and valuing/understanding DEI work,” according to Wharton management professor Stephanie Creary.

For example, eighty-one percent of organizations say they are focused on improving diversity and inclusion. However, only 42% of the U.S. companies surveyed have publicly documented commitments to racial or ethnic equality.

This problem stems from the fact that employers treat DEI efforts as unrewarded peripheral work rather than core, merit-worthy initiatives. These initiatives – such as well-being programs and creating DEI positions – look good on paper, but it’s often easy to miss the real disparities or measure success of initiatives.

The glaring racial wealth gap is an example of the disconnect with DEI initiatives. It manifests itself with employers and their savings benefits. According to the Employee Benefit Research Institute’s (EBRI) 2021 Retirement Confidence Survey: A Closer Look at Black and Hispanic Americans, participation in retirement savings is roughly the same across race/ethnicity and income.

But the same study also reveals that actual total savings and investments are very different between different racial demographics.

Forty-five percent of all low-and-median-income workers have less than $1,000 in savings, which is problematic. But the situation is even worse for Black and Hispanic Americans, and doesn’t improve at the same rate as other demographics (even with higher incomes).

Similarly, the Federal Reserve finds that, on average, White families have eight times the wealth of Black families and five times the wealth of Hispanic families.

And, according to Sunny Day Fund research, part of this disparity is explained by most people’s need for accessible money, which is tougher with traditional employee offerings like 401(k), 403(b), and Roths. All of these offerings carry restrictions, varying levels of penalties and fees, and administrative access difficulties.

You also see this story play out with emergency savings. EBRI, Pew Research, AARP Research, and so many others have uncovered that minorities have far greater difficulty handling financial emergencies (largely due to little to no emergency savings).

Unfortunately, current DEI initiatives aren’t yet addressing DEI issues like the wealth gap. Organizations have taken key steps in recognizing DEI as a priority and elevating dedicated leadership to DEI initiatives, but those initiatives need to be linked back to measurable impact.

Take action with these financial DEI initiatives

Operationalize your commitment to DEI by creating initiatives that are actionable, measurable, and evidence-based so that you make data-driven decisions to prioritize what works.

We recommend prioritizing financial inclusion. Financial initiatives are powerful catalysts for advancing racial equity and systemic change.

Here are three actionable, financially-driven DEI initiatives that can help you help your employees.

DEI initiative #1: Consider your employees’ opinions about their financial well-being.

The core concept behind DEI is that everyone has a voice.

“You’re not going to get the benefits of diversity, like more robust decision making and innovation, unless you actually have a culture where people can speak up,”  says Michele Parmelee, Deloitte Global’s deputy CEO and chief people and purpose officer.

Despite this fact, only 38% of organizations review engagement survey responses by race or ethnicity to understand any differences in experience.

Close the feedback loop and involve employees in financial well-being and other DEI solutions you’re trying to provide. Here are a few ways to do that:

  • Avoid a “top-down” approach when it comes to DEI. This approach doesn’t foster a culture of commitment when leaders are telling employees what to do.
  • Incorporate conversations around DEI budget and resources into entire-executive meetings and share what efforts are being made with HR. 
  • Introduce engagement surveys and scores such as financial well-being surveys, which we offer at Sunny Day Fund, that measure the employee experience across diversity and inclusion factors. Share with employees how this information will be used and follow through.

Also, hold senior leaders (including CEOs) accountable for DEI outcomes instead of HR managers and ensure that they’re involved with behavior-based DEI training.

These efforts pay dividends. According to an Achievers study, almost 90% of employees say there’s a high level of inclusion at companies where there’s a strong culture of recognition.

DEI initiative #2: Offer emergency savings as a benefit.

Things like 401(k) personalization and investing access are critical to DEI efforts, but in order for employees to reach longer-term financial goals, they must first lay a solid emergency savings foundation.

And emergency saving benefits are what people overwhelmingly support, which builds on initiative #1. According to AARP Research, 9 in 10 working adults support emergency savings as a benefit.

This also makes sense on a holistic program level, where you can break down barriers to access and participation for employees who crave a stepping stone to retirement savings.

The support for workplace emergency savings programs is consistent across demographic groups, no matter the gender, income, age, or race/ethnicity.

“Where else do we get that level of consensus in the present-day world?” asks Sid Pailla, CEO of Sunny Day Fund.

To meet this request, enable direct-from-employer contributions into an FDIC-insured savings account for individual employees.

For example, at Sunny Day Fund, we help employers with simple payroll set up to allow automated employee and employer contributions into a standalone FDIC-insured savings account with no minimums or penalties. Better yet, it removes friction and reduces fear of access with fast, penalty-free, and stress-free withdrawals.

This employee benefit has proven success. $50 is the typical employee contribution per paycheck, with balances exceeding $400 after just four months.

The takeaway: accessible money and cash flow matter to your financially underserved employees and an emergency savings program is one way to level the playing field.

DEI initiative #3: Reward savings behavior and outcomes.

Give meaningful economic incentives for individuals who want to build emergency savings by enabling them to earn rewards for their saving contributions and balances.

“From a systemic and behavioral economics perspective,” Pailla says, “there has been no economic incentive for anyone to save for emergencies before now because the market interest rates have been close to zero for almost 15 years. So other than fear, there was no real economic motivation. What if employers can be a part of the source of that incentive, enabling the underserved or underbanked to build liquid wealth?”

Sunny Day Fund enables employers to do exactly that with customizable, quarterly rewards into employees’ standalone FDIC-insured savings accounts, reinforcing resilient savings behavior. Employers typically invest $150-$600 per year per employee based on configuration, including rewards, taxes, and fees.

So how are organizations funding their reward contributions? One way, according to Sunny Day Fund research, is that about a third of employers may be sitting on accessible excess cash reserves from their self-funded health insurance plans. “And let’s not forget that lots of companies have made a commitment to match retirement savings, but as the data shows, that match is, unfortunately, being left on the table by low and median-income employees,” he says.

With this initial investment, companies are also estimated to realize savings themselves due to better retention, productivity, and well-being. For example, a company using  Sunny Day Fund experienced a roughly 20% higher retention rate compared to industry peers, which is remarkable, especially in this tight labor market.

Finally, measure engagement. “From the employer perspective, if we’re viewing inclusion and equity as the ways that we want to engage employees, we have to get to a point where everyone participates,” Pailla says.

Rewarding all employees financially and equitably for saving any amount, large or small, is a way to make workers of all income levels feel included and invested in the success of their organization.

Take deliberate action to support DEI

Making workforce financial well-being a priority is an opportunity to walk the walk with DEI, proving to stakeholders that you both understand and champion diversity, equity, and inclusion outcomes.

Learn more about how Sunny Day Fund is committed to helping ALL 152 million hardworking Americans achieve financial well-being starting with emergency savings, and how you can use our program to bridge the financial well-being gap within your organization.

Reach out to us contact@sunnydayfund.com today and discover our customizable employer-sponsored savings programs.

5 Startup Takeaways from the Sunny Day Fund Interns

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Want to work for a startup? A key element to this goal is understanding the startup’s work environment and company culture (and learning if the work you do will be meaningful!). 

And there is perhaps no better way to learn about the inner workings of a startup than through intern insights. Introducing the Sunny Day Fund interns!

Our summer interns brought their different academic backgrounds and expertise to help further develop the SDF platform, assist with product marketing, and more. We’re proud of what they accomplished, the lessons they learned, and the amazing ideas they brought to the table!

Want to learn more about their experience? Check out five key takeaways from our interns — from company culture insights to tips on working with a startup.

1. Find startups with missions that resonate.

Nathan, an incoming first-year student at the University of Virginia, reached out to us as early as March about the opportunity to intern. 

Joining the tech team as a software analyst, Nathan (and Hitaansh) lunged into learning all the different, complex elements that make up our technology and took ownership of a new feature release. 

But the technical side of Sunny Day Fund wasn’t the only thing that Nathan took away from his internship. According to Nathan, “A piece of advice that I’d offer for others exploring startup internships is to find startups whose mission resonates with you; you’ll find your work to be enjoyable and meaningful.”

At Sunny Day Fund, our mission is to bridge the gap between financial stability today and financial freedom tomorrow for hardworking Americans. Our goal is to truly enable financial well-being for ALL 152M American workers by partnering with the organizations that employ and care about them.

With a clear mission as our startup’s north star, other elements — like a collaborative team environment — fall into place. 

“Something that I’ve really liked about Sunny Day Fund is how supportive the team is,” Nathan adds. “Whether its help with code, optimizing the UX/UI, or figuring out what needs to be fixed in testing, it was nice to always have someone to lean back on for help.”

Beyond coding, Nathan gave all of us at Sunny Day Fund great tips on weightlifting and will likely retain the title of best intern QB. 🙂

2. Have confidence in startup leadership.

Ben joined us at Sunny Day Fund to work as a Sales, Operations, and Business Associate. He rounded out his summer internship to return to the amazing University of Virginia Darden School of Business for his second year. 

He is passionate about creating a positive impact through business and technology, and he brings that passion to our team from research on tax policy to growth strategy.

In addition to exploring a company’s mission, product, and market, Ben advises to also consider the company’s leadership.

“Make sure you really feel confident in the leadership of the startup,” Ben says. “At the end of the day, the success of early-stage startups is decided by the people working at the organization. This was a key consideration prior to interning for Sunny Day Fund as Sid is a phenomenal leader and has surrounded himself with the right people to successfully execute on the company’s mission.”

Ben also has positive feedback about his overall experience with the company. “My internship with Sunny Day Fund has been everything I’d hoped for and more! It has been very rewarding to work with an excellent group of coworkers toward the company mission of changing millions of lives across the country.”

We’re thrilled that Ben will continue working with the Sunny Day Fund on a part-time basis and join us full-time after his final year at the Darden School of Business.

3. Find work that allows you to have an actual impact.

Hitaansh is a first-year student at the University of Maryland. He was an amazing addition to our tech team this summer as a Software Analyst. 

We learned that Hitaansh has a deep passion for entrepreneurship and aspires to start his own company one day, And, in the meantime, he loves to leverage tech to do data-driven storytelling.

Over the summer, Hitaansh learned technical skills and the administrative processes that startups/businesses go through. He also quickly became accustomed to various technologies (Angular, Strapi), scrum/agile methodology, and the quality assurance testing process.

According to Hitaansh, he especially enjoyed the work because he knew that his contributions were helping others improve their financial well-being. 

“I would encourage others to explore startup internships,” he says. “It offers a unique experience and allows you to make an actual impact with your work. Knowing that what you are doing will positively impact someone else’s life is powerful and motivating.”

Hitaansh also has learned the importance of team communication. 

“Anytime there seems to be a disconnect in what is expected and/or an administrative bottleneck stopping you from getting work done, it should be made clear to the entire team what the problem is,” he says. “This allows for the problem to be addressed and work to continue without much delay (especially at a startup where time is of the essence).”

4. Embrace open communication and collaboration.

Tonisha joined us from Virginia CommonWealth University as our amazing Product Marketing Intern. 

The role allowed her to use her UX experience to connect with new customers, learn directly from current and future users, and curate a personalized, streamlined experience on the Sunny Day Fund platform. 

Can you tell how passionate she is about her work? “When I signed up for this internship, I had no idea it would be so beneficial to my professional growth,” she says. “My favorite part about working with Sunny Day Fund is their continuous commitment to delivering seamless customer experiences.”

Tonisha also has advice when it comes to exploring startup internships. “Use this opportunity to be an active team player, be open to sharing tasks, and coordinate work with others. It was comforting to see that open communication was one of the most vital and most apparent skills I learned during my internship. ”

And according to Tonisha, “Some startups may only have a team of less than 20 or 10. But we at Sunny Day Fund are committed to ensuring that the customer’s needs are met no matter the size. That is the sort of dedication I strive to have while working in my profession going forward.”

5. Focus on building efficient processes and taking initiative. 

William or “Tre”  from Babson College served as a Workforce Financial Well-being Analyst, enabling our outreach team to do our best work this summer. 

With Tre’s help, we were able to quickly identify and connect with employers thinking innovatively about their people and their bottom line. Tre’s patience and willingness to jump into any situation make him a great athlete, and soon-to-be extraordinary entrepreneur.

In addition to growing his entrepreneurship, finance, and persuasion skills, Tre’s experience working at SDF imparted lessons of daily organizational behaviors that he will continue to build from.  

“Working at a young company, you learn quickly that efficiency is crucial to complete operational tasks and objectives,” Tre says. “Having the ability to quickly assess and analyze team goals through a guided system of best practice tools provided me clear insight into the organizational steps it takes to run an organized, efficient, and sustainable business.” 

For those searching for an internship in the startup space, he has advice about the power of initiative. “Find ways to always involve yourself and explore ways to be a better team player,” he says. “Show a willingness to help team members and look for as many opportunities as possible to soak up information.”

His final thoughts about his internship experience? Like everyone else, it comes back to our mission. “What I liked most about Sunny Day Fund was working alongside people who are driven and passionate towards delivering the best service possible for American workers,” says Tre. “Being in an environment where people work with strong purpose made my experience with SDF so much more gratifying and fulfilling.”

We wish him a fantastic return to Babson College!!

Check out career opportunities with Sunny Day Fund

As the summer draws to a close, we can’t help but reminisce about the amazing memories that we shared with our interns, whose hard work and incredible insights enabled us to grow faster and better. A big thank you to them!

Which brings us to you! Are you interested in a career with Sunny Day Fund? View our current job opportunities here. We are looking for talent across product, engineering, and sales (bonus points if you have experience with employee benefits or fintech)! We offer meaningful roles with competitive pay (plus, you get our own Sunny Day Fund savings benefit with up to $2K in rewards!). If you’re ready for purpose beyond work, reach out! We’d love to hear from you.

Already have an offer from us or another startup? Check out more great insights about the startup offer and opportunity from Emma Silverman, Principal at our lead investor Trail Mix Ventures: “The Startup Offer: What to Consider, for Founders and New Hires.”

💛 🖤 Techstars + Western Union + Sunny Day Fund 💛 🖤

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We’re thrilled to be a part of Techstars + Western Union Accelerator’s Class of 2021! Our team looks forward to learning from the amazing Techstars team (Elle, Josef, Kallie, Jen, Jennifer, and Chinedu), growing alongside incredibly inspiring fintechs from across the world, and partnering with the brilliant folks at WU.

Innovation in the Movement of Money

Our class’ investment thesis is “Innovation in the Movement of Money,” and Elle discusses in her recent Techstars blog post what this meant to her and the evaluation team. What it means to us at Sunny Day Fund is this – the way money moves and works today can and should be improved for billions of people across the world, so what can be done to create stakeholder value meaningfully and sustainably?

One place to start is realizing that most hardworking Americans don’t have enough in savings to overcome an unexpected emergency – it’s hard to move money that’s not there. And so, at Sunny Day Fund, our answer to the above question is to enable employers – who are the primary purveyors of income to most people – to make saving for emergencies easy, accessible, and rewarding. Employers want this – better financial well-being means better retention and better physical and mental health. (Yes, employers save money by helping their employees save money – a truly delightful synergy). And employees want this too – the latest from AARP Research found an incredible nine in ten working adults across all demographics support emergency savings as a benefit.

And the other teams in our class are answering that question in their own brilliant ways – from enabling mom and pop stores in Indonesia with digital financial capabilities to creating building blocks for other fintechs in LATAM to simplifying family and friends’ loans. We can’t wait to innovate in the movement of money alongside them.

First Class with 100% Diverse CEOs

One reason we’re extra excited to be in this class is that 100% of the CEOs in our class self-identified as diverse, a first in Techstars history that has had over 2,500 companies participate in its programs.

We aspire at Sunny Day Fund to drive inclusion and equity in the financial benefits space, as you may have seen from our recent article on DEI. There’s a lot of work to be done bridging too many gaps! And to be part of an accelerator program, especially one with the backing of the largest money mover in the world, that’s literally investing on making diversity a reality with this class just makes us feel very much at home. Thank you Techstars + Western Union!

Hiring!

We’ve been reading about the “Great Resignation,” and we totally get it – coming out of the pandemic, we all want to do something that feels personally impactful. We feel that opportunity exists here at Sunny Day Fund and we know the wind is behind our backs. So check out our open roles – everything from full stack engineers to customer success to rotational analysts, and apply!

What the 2021 Child Tax Credit Means for Your Employees (& How You Can Help)

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Child Tax Credit 2021

Rarely do policy and employee needs collide to create truly meaningful financial change. 

But the 2021 IRS Child Tax Credit (CTC) offers a once-in-a-lifetime chance to get savings right. 

In an unprecedented move, the United States Congress passed legislation to provide relief for all parents of children ages 0 to 17.  For 39 million American households and 65 million children, we estimate that the $250-$300 per child monthly tax credit will represent a median income boost of 8-15%.  

That increase will help parents address food insecurity, pay for child care and meet other financial needs.  

For HR managers and employers, the expanded tax credit should create a sense of urgency — urgency to enable their employees and their families to multiply the credit’s impact and achieve company-wide well-being goals. 

In short, now that parents have the capacity to save, it’s time for employers to provide them with the capability to follow through with an employer-sponsored savings program. 

What is the Child Tax Credit 2021?

The tax credit for parents is not new, but the 2021 Child Tax Credit Relief Bill is revolutionary.

The credit is normally available when taxes are filed, but advance payments started this month and go through December in response to the financial effects of the pandemic. Families can claim the remainder of their money when they file their 2021 tax returns next year. 

On July 15, the IRS started sending $250-$300 monthly Child Tax Credit (CTC) payments to eligible low-to-moderate income households. 

Here are key facts from the Tax Policy Center about the credit:

  • The tax credit is fully refundable (although parents should be aware of certain stipulations). Even families who earned $0 in 2021 may still be eligible.
  • Unlike the 2020 credit, it covers children who turn 17 in 2021. 
  • The annual child tax credit is up to $3,000 for ages 6 to 17 (up from $2,000) and is $3600 (up from $2000) for under 6.

Single taxpayer parents qualify for the full child tax credit amount if their adjusted gross income (AGI) is $75,000 or less (that amount lowers for incomes above $75,000 and phases out for incomes over $240,000), as you can see in the graph below from the Tax Policy Center.

Parent employees now have the capacity to save.

Emergency savings is on everyone’s mind coming out of the pandemic. This tax credit provides extra financial capacity that meets parents’ desire to save and helps them achieve financial goals to support their children’s future. 

It positively challenges — and changes — the status quo. Forty-seven percent of low-income adults say they are usually not able to save (vs. 25% of middle-income adults and just 8% of upper-income adults).

These same adults must often turn to payday loans and credit cards to access immediate cash, creating a costly cycle of debt. 

But unlike high-interest credit options, the tax credit money is unrestricted and offers a free source of liquid cash. This means that nearly 39 million households, or most American families, finally have risk-free money to save for their kids — for everything from emergency daycare to school supplies to future college tuition. 

For Marla Snea, a 52-year-old mom who is battling cancer and living on Social Security benefits, the money will make all the difference for her and her 14-year-old daughter. “Two hundred and fifty dollars, to me, is like handing a pauper a million,” says Snead. “It is going to help me so much. I mean, even Christmas – I might be able to get my children Christmas.”

Stash found that 57.5% of families are planning to save the child tax credit, placing the money in a standard savings account. 

And studies from the last stimulus payment prove that parents will follow through. On average, households used or intended to use 34% of the stimulus check to pay down debt and saved 42% of the stimulus payments they received from the most recent COVID-19 relief bill in April.

Parent employees can better plan their monthly finances.

Seventy-two percent of low-to-moderate income families who make less than $50,000 per year live paycheck-to-paycheck, with 33% struggling to pay their bills, according to a 2021 study by LendingClub.

Not surprisingly, the majority of income goes toward expenses rather than savings. 

The tax credit will allow these families to plan for the future, rather than focusing on staying afloat day-to-day. 

“Getting part of the credit as monthly payments is a boon to low-income families, which often struggle with fluctuating incomes,” says Timothy Flacke, executive director of Commonwealth, a nonprofit group that focuses on financial security. “This is a really, really big deal. They can make financial plans around it.”

And according to Schwab’s 2019 Modern Wealth Survey, 56% of people who plan their finances feel “very confident” they will reach their financial goals (as compared with only 17% of non-planners). 

The tax credit offers savings capacity that was previously out of reach to this underserved population. 

Enable parent employees to save with a dedicated program.

Now that parents have the capacity to save for their families, employers can provide the capability to act by offering an employer-sponsored savings program that rewards employees for their resilient savings behavior. And according to AARP Research, 9 in 10 working adults are asking for emergency savings as a benefit.

Sponsor a standalone FDIC savings account for your employees to automatically contribute part of their tax credit, even if it’s just $20 per month. The money is then easily accessible for emergencies and parents can create a financial safety net for themselves and their kids.

Consider it a unique way to multiply or magnify the impact of the CTC for your employees and their families. 

A structured program encourages the habit of saving through rewarding positive saving behaviors, which lays the groundwork for long-term financial well-being.

With stimulus checks + these child tax credit payments, this period in time is a rare reset button on finances. But the behavior to save still needs to be developed, and that’s where employers have the opportunity to crush it.

And as you help your employees save and lower their financial stress, you also help your company with better retention, productivity, and well-being. It’s a win-win situation for all involved.

Take advantage of this unprecedented opportunity to help your employees save.

By leveraging the Child Tax Credit 2021 and people’s own desire to save, leaders can lower financial vulnerability, improve productivity and retention, and achieve their impact goals. 

Want to help your own employees save and improve their finances? At  Sunny Day Fund, we offer a customizable employer-rewarded savings program. With high voluntary enrollment and high return on investment, the program is a powerful way to become an employer of choice – especially for your frontline workers. 

Reach out to us at contact@sunnydayfund.com and ask about our special 2021 Child Tax Credit promotion!