In the ever-evolving landscape of employee well-being, the intersection of financial health and workplace dynamics has taken center stage. Matt Bahl from the Financial Health Network, Rachel Schneider representing Canary, and Ernesto Boada of the Sunny Day Fund share their collective wisdom to sheds light on the critical importance of addressing financial well-being within the workplace.
Aligning Employer and Employee Priorities: A Tale of Two Perspectives
Buck Consulting recently conducted a survey that revealed a striking misalignment in priorities between organization or HR leaders, and their respective employees. While employers overwhelmingly identified mental health as the top organizational priority, the workforce itself placed financial health at the forefront. Matt Bahl highlights this divergence, underscoring the need for organizations to understand and align with the true needs of their employees.
“Workplace Financial Health is important because this is the place that employees are increasingly turning to for solutions. We’re not seeing solutions at scale in other aspects of their financial life, and so the workplace, rightly or wrongly, is where people feel they have the most control over their financial inputs,” notes Bahl.
The Employee Relief Fund: A Beacon in Times of Crisis
Rachel Schneider introduces the concept of an Employee Relief Fund, a charitable initiative set up by employers to provide emergency grants to individuals navigating crises. Whether it’s a natural disaster, a significant medical event, or a disruption in their personal lives, this fund offers a strategic way to extend support during challenging times.
“Emergency grants provide financial assistance when individuals are experiencing a crisis. It’s an advantageous way, in terms of tax treatment, to get people money when they most need it,” Rachel Schneider explains.
In the heart of every successful workplace lies a thriving community. Schneider emphasizes the moral imperative for companies to cultivate a sense of community among employees. Drawing from data that shows the happiest employees are those who feel supported and appreciated by their managers and have meaningful connections with colleagues, she underscores the importance of recognizing employees not just as contributors to the bottom line but as individuals with unique needs.
“A huge amount of our time is spent in community with this group of people, and if we don’t feel connected to them, there’s something really lacking in the experience of work,” Rachel Schneider asserts.
Emergency Savings Programs: Core to Financial Health
Ernesto Boada delves into the alarming reality that a significant portion of the American population lacks sufficient liquid savings. With studies indicating that many individuals have less than a thousand dollars in savings, he highlights the need for interventions that encourage a personal habit of saving. Sunny Day Fund automates payroll-deducted, employer-rewarded emergency savings accounts as a benefit, which research has shown to improve financial health and improve retirement readiness and security.
“For employees, it’s about moving away from financial stress to a better place. For employers, it’s contributing to improve financial wellbeing of their employees while and
Bahl adds “Every company we’ve worked with who has implemented an Emergency Savings Program underestimated both the utilization by employees and the high conversion rate. When you have a solution directly responsive to a material need, people will use it.”
The Reality of Financial Disruptions: Beyond the $400 Myth
Matt Bahl challenges the prevalent narrative surrounding emergency savings, debunking the myth that $400 is a sufficient cushion for unexpected expenses. Drawing attention to the frequency and magnitude of financial disruptions, he argues that emergency savings and hardship funds are essential benefits that acknowledge the daily impact of financial challenges on individuals.
“I have not come across a single employer, in any industry, regardless of income, where they’re not hearing from workers about things that happen in their lives that cause financial disruptions. So solutions like Emergency Savings and Hardship Funds, which often work best in tandem, are not one-size-fits-all approaches – every employee at some point is going to need these things. These solutions are essential benefits,” Matt Bahl asserts.
A look at the numbers
- Every 90 days about half of the US population experiences an unexpected expense.
- 56% of unexpected expenses are more than $400
- The average unexpected expense is about $1400
- Sunny Day Fund data shows that employees are saving an annual average of $2,200
Communicating Financial Wellness Solutions to Employers and Employees
A key importance to the success of these programs lies in how these programs are messaged, because these are such new benefits. In conversations with employers, these solutions can be presented from the ownership mindset. “Short term cash reserves are a really important metric for businesses. In the same way, short term liquidity is a really important metric for financial health for individuals,” adds Matt Bahl.
Being able to communicate the difference between Emergency Relief Funds and implementing Emergency Savings Accounts to the employees is just as crucial. When presenting solutions on being able to weather a financial storm, think of Emergency Savings as the levees, and the Employee Relief Fund as FEMA. They’re both an important part of the financial benefit matrix built for worker stability.
A Call to Prioritize Financial Wellness
Rachel Schneider reminds HR leaders that customization is key. Acknowledging the diversity in company culture, senior leadership support, and communication methods, she underscores the importance of tailoring financial wellness solutions to the unique needs of each organization.
In a world where financial stress is pervasive, the workplace emerges as a powerful catalyst for change. The insights shared in this webinar highlight the need for organizations to prioritize financial wellness, aligning with the true needs of their workforce. By fostering a sense of community, implementing targeted financial relief programs, and customizing solutions, employers can play a pivotal role in enhancing the overall well-being of their employees. In doing so, they not only contribute to the financial stability of individuals but also create a thriving workplace community where employees can flourish both personally and professionally.
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