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Mastering the High Stakes Benefits of Employee Financial Wellness

Mastering the High Stakes Benefits of Employee Financial Wellness

by | Feb 7, 2018 | Blog

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

More employers recognize that financial wellness is table stakes for employees. What has also become apparent is that simply providing a 401(k) and retirement planning advice isn’t enough to reduce the financial stress almost all employees feel. Your employees need more.

Many employees struggle with paying down debt. They often have significant, unreimbursed, medical expenses or may be experiencing other financial hardships. This means they don’t always have the option to set aside funds for retirement, and have to “opt-out” of employer-sponsored savings plans simply because they can’t afford it..

From the employer’s point of view, adding one more benefit to an increasingly expensive pot might seem like a waste of money, especially if the employee benefits you’re providing aren’t being fully utilized.

But when it comes to financial wellness, the calculus is different. Forty-nine percent of employees feel that their workplace productivity would increase if their employer-sponsored benefits included financial planning programs in addition to existing retirement savings assistance. While retirement planning benefits are important, they don’t come close to capturing the full financial wellness needs of your workforce. Employees with financial security are much more motivated and focused at work.

In this week’s blog post, we run down the reasons that:

Financial Wellness Is About More Than Just Retirement Planning Advice

Do you feel like workplace financial wellness is out of reach? Ideally, financial wellness programs will lower health costs, enhance productivity, boost employee engagement and reduce employee absenteeism and turnover. Often, the only barrier is getting employees to try something new.

How to improve workplace financial wellness

Is your onboarding process thorough enough? If your onboarding process goes beyond basic training to include “acculturation,” then it probably isn’t. Whether it’s for new hires or internal transfers, when you consider the amount of time, staffing and money that goes into your onboarding process, shouldn’t it be fully comprehensive?

The importance of expanding your onboarding process – across the board

Positive investments in small businesses is driving economic growth. Small business investments continued to grow at the end of 2017 as payment delinquencies and defaults remained low. However, some warning signs in financial health are starting to emerge.

 Small business investments – what you need to know

How do you know if your corporate wellness program is successful? The answer is much more nuanced than simple numbers and charts although those are important as well. Beyond standard metrics, a successful program will show employees with more energy, enthusiasm, productivity, creativity, higher engagement and lower absenteeism.

Here’s why financial wellness goes beyond numbers

The Tax Cuts and Jobs Act has altered two important tax breaks for homeowners. Homeowners with large mortgages and home equity loans should be paying attention to the new tax laws, as there are new  limits on deductions for state and local taxes. There are fine details that you should read about to see how they’ll affect you – and your employees.

The new tax law may affect you more than you think

Is there a magic number that tells you how much to save for retirement? Or a magic 8-ball that tells you what to do with your retirement investments when the market drops? Unfortunately, magic won’t help you save for retirement. But, planning, saving, thinking outside of the box, doing a lot of research and speaking with an expert just might.

Your retirement savings goes beyond a market dip

Have something to add? Email info@bestmoneymoves.com.

Financial Wellness Is About More Than Just Retirement Planning Advice

Financial Wellness Is About More Than Just Retirement Planning Advice

by | Feb 5, 2018 | Blog

Financial wellness has become table stakes for employers. But while many employers believe they’ve ticked the financial wellness box by providing employees with a 401(k) and retirement planning advice, that’s only a tiny piece of the help employees need.

That’s not to say comprehensive retirement planning isn’t vital to your employees’ overall financial wellness. It is. But if your employees are typical, they likely struggle with paying down debt, significant medical expenses or other financial hardships, which means they may not always have the option to set aside funds for retirement. Their financial stress goes beyond wondering whether they have, or they can, save enough for retirement.

What percentage of employees struggle with other causes of financial stress? Plenty. Forty-nine percent of employees say that if their workplace benefits included financial planning programs in addition to existing retirement savings assistance, their productivity in the workplace would significantly increase, according to the 2017 Retirement Confidence Survey conducted by the Employee Benefits Research Institute.

In addition to allowing auto-deductions for retirement savings, best practice financial wellness programs offer a wide range of preventative and curative options for your employees’ financial stress, with both long and short-term solutions for tackling tough financial issues such as debt, elder care, identity theft and more.

Other studies have concluded that financially secure employees are more motivated and focused at work. In order to help your team reach this level of financial wellness, consider providing a financial wellness program that offers a broad range of services, including:

  1. An easy-to-use budgeting system
    There’s nothing like seeing whether you’re cash-flow positive (or not). Seeing a clear view of your income and expenses along with an evaluation of your spending habits helps employees take a long hard look at the choices they’re making today and how they can make different choices going forward. Simple, yet effective tools that help employees identify the root causes of their financial stress can help eliminate financial insecurity and increase overall financial wellness.
  2. Resources for managing debt
    More than half of the workforce is financially stressed, according to a PwC study on financial wellness. And, among millennial employees that number rises to 64 percent. Debt is a big driver of financial insecurity and figuring how to pay down or manage debt can be incredibly tricky, especially if employees have multiple types of debt, with more than one creditor. When choosing a financial wellness platform, pick one that assists employees with calculating the total sum of what they owe while also tracking interest rates and repayment habits. Understanding what is owed helps employees recognize how much their existing debt will cost them in the long run and what their best options are for consolidation and repayment.
  3. Help to set savings goals
    You can’t reach a goal if you don’t set one. Financial wellness programs should allow employees to set individualized goals, based on personal circumstances regarding income, lifestyle, basic expenses, individual interests and family size. A qualified financial wellness program should offer assistance with assigning realistic time frames to accomplish each financial goal. The ability to visually track personalized savings timelines encourages commitment to the savings plan and ongoing smart spending habits.
  4. Comprehensive, personalized answers to individual concerns or questions
    Financial wellness isn’t just about creating a tight budget, or just about reducing debt. Financial wellness is integrated with all areas of life. Whether directly associated with financial planning or not, financial wellness deeply impacts an employee’s sense of overall well-being. All of life’s big decisions and events carry lasting effects on an employee’s bank account and overall financial wellness. Ensure that you provide a comprehensive financial wellness provider that can address – and resolve – your employee’s individual financial stressors.

Your employees are most likely experiencing financial stress. While retirement planning benefits are important, they don’t come close to capturing the full needs of your workforce. Provide your employees with access to a financial wellness platform that addresses their own financial stressors, not someone else’s.

Don’t forget: when your workforce is less financially-stressed and more financially-stable, it’s better for everyone.

The Student Debt Crisis is Growing and Affecting Your Workforce. What Can You Do?

The Student Debt Crisis is Growing and Affecting Your Workforce. What Can You Do?

by | Jan 30, 2018 | Blog

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

America has a student loan debt crisis. Employers are paying the price.

Over 44 million Americans are carrying a total of $1.48 trillion in student loans and chances are your employees (and possibly even you) are among those affected. Employees facing significant student loan debt are more likely to defer saving for retirement, buying a home, getting married and having children. (And they’re spending between 12 and 15 work hours each month fretting about their finances.)

They’re also more likely to seek out additional employment to cover their expenses. As a result, their concentration, productivity and overall physical health suffers – as does your company’s bottom line.

Meanwhile, the financial cost of higher education is only increasing with time, matriculating well-educated, inexperienced and deeply indebted graduates into the workforce.

Empowering your employees with financial know-how is the key to reducing financial stress, managing their student loan debt and creating financial wellness.  

Make no mistake: student debt affects your employees’ ability to plan for the future and build productive and meaningful relationships. For employers, providing access to financial wellness through financial literacy and financial planning benefits programs means you’ll be able to attract and hold on to talented employees.

The cost of a higher education shouldn’t cost your company a good work force and it shouldn’t hold your employees back from planning their future. Read this week’s story to learn about 10 things you need to know about your employee’s student loan debt.

Employee Student Loan Debt: 10 Things You Need To Know (Part I)

How does a dynamic team stay on the same page? Between remote workers, local employees, freelancers and executives, Quartz has found that “virtual coffee breaks,” annual summits and transparency through a 1,000+ page handbook keeps everyone in their company looped in to cultural norms and work processes.

Can transparent communication guidelines actually connect your team?

Are you trying to grow your female IT workforce? Women make up a smaller share of both the private and public IT workforce. Five female federal executives offer advice on how women can succeed in public sector IT, despite making up a smaller share of the labor pool. See how the tide is changing.

5 Tips to Stop Backslide of Women in Government Tech

Corporate tax savings have arrived! What are America’s largest corporations doing with their millions in slashed taxes and instant savings? Here is a list of S&P 500 companies that have announced bonuses, wage increases and other special investments for their employees based on their new lower tax rate.  

Tax savings allows greater investment in employees

It’s never too late to start a late-stage retirement plan. Don’t wake up in a cold panic anymore! Yes, you should have already begun your retirement savings plan – your retirement looms closer every single day. But if you haven’t started already, isn’t it too late? It’s not.

9 immediate steps to take today, to begin your retirement savings.

Cost is no longer the driving force when it comes to benefit platforms. What are the many factors taking priority over cost? Ease of use for benefits administrators and their employees as well as the ability to integrate new benefits technology with existing HR information systems – and that’s not all…

Employers are choosing user experience over cost.

Are you living in a Smart City? In March, the Smart Cities Council 2018 Readiness Challenge Grants will announce 5 winners from a list of 9 regional finalists. They’ll access workshops, products and services to bolster initiatives in infrastructure, open data platforms, Internet of Things (IoT), public Wi-Fi, sustainability and more.

What would you do with a Readiness Challenge Grant?

Is your city in one of the top six US office markets? 2017’s commercial property market experienced a lag in tenants, while office space availability has remained steady since 2016. Tenants at the end of 2017 occupied 21 million square feet more office space than they did at the beginning of the year.

How will economic diversity and population flow affect the office market for 2018?

Have something to add? Email info@bestmoneymoves.com.

Employee Student Loan Debt: 10 Things You Need To Know, Part Two

Employee Student Loan Debt: 10 Things You Need To Know, Part Two

by | Jan 30, 2018 | Blog

Employee student loan debt: 10 things you need to know, part two. The student loan debt crisis isn’t going away. This is what employers need to know about it.

This article is the second part of a series on 10 Things Employers Need to Know About Student Loan Debt. Catch up with Part One, here.

Americans owe a combined $1.4 trillion in student loan debt — and employers are starting to feel the burden of that enormous debt. The vast majority of employees are financially stressed, and they are less focused, less engaged and less productive than those without debt and are more likely to take one a second job or skip work due to a stress-related illness.

The student loan debt crisis isn’t going away, but there are ways you help your employees cope with their financial stress and get back to work. Here are 10 important things you need to know about student loan debt and the struggle your employees are facing in paying it back:

6. Student loan debt is not a millennials-only problem.

Younger employees aren’t the only ones dealing with the stress of student loan debt. In fact, 2.8 million Americans aged 60 and older carry outstanding student loans from their own college education. This number is up significantly from 2005, where only 700,000 Americans in this age group carried outstanding loans. Your older employees may be struggling to repay debt from continuing education or are possibly paying off debt from sending a child or grandchild to school.

7. Stress over student loan debt is keeping your employees from major life milestones.

Millennials graduating with student loans are more interested in paying off their loan debt than they are in homeownership, getting married or having children. A study by the Federal Reserve Bank of New York has found that having student loan debt decreases homeownership at every level of higher education. Indebted millennials also less likely to set aside money for retirement or build an emergency fund, creating further vulnerability, possible additional financial debt and significant stress into the future.

8. Stress over student loan debt is making your employees sick.

Over half of young workers with student loan debt worry about it constantly, according to American Student Assistance, a nonprofit specializing in helping consumers finance their higher education. Stressing about massive debt isn’t just an emotional strain, it can also cause significant physical ailments from occasional headaches or gastrointestinal problems, to more chronic conditions such as high blood pressure or depression and anxiety.

9. Most employees wish they had more information about repaying student loan debt, they just don’t know where to look.

Repayment options for student loan debt are often complicated and difficult for consumers to navigate on their own. With private loans, interest rates and monthly payments can change with little to no warning. Certain options, like consolidation or forgiveness, often requires knowledge of how to make negotiations with whoever holds the loan. Don’t let your employees feel overwhelmed by their debt – employers hold a unique ability to help their employees manage their student loan debt and help build their financial literacy.

10. Most employees want their employers to provide them with resources on student loan debt.

Employees already rely on their Human Resources departments for information on workplace safety, benefits and managing retirement plans. Increasingly, they are looking to their employer and HR team to provide debt counseling, financial tools and management options and overall financial wellness. By offering debt counseling and financial literacy services, you show your employees that you understand the financial challenges they face paying back student debt and are invested in their wellbeing. Your employees will not only feel happier to work for an employer who cares about their wellness; as their financial wellbeing grows and their student loan debt decreases, your employees will be healthier, more present, more productive, and ready stick with your company for the long term.

Financial literacy and financial planning are key to reducing financial stress, student loan debt and creating financial wellness. The first step, however, is knowing how to get there. For your employees, student loan debt affects their ability to plan for the future and build productive and meaningful relationships. For employers, it means being able to attract and hold on to talented employees. Consider who in your workforce might be affected by significant student loan debt. The cost of a higher education shouldn’t cost your company a good work force and it shouldn’t hold your employees back from planning their future.

To get the complete picture about student loan debt and your employees, be sure to read Part One of this article here.

More on Student Loan Debt and Financial Stress

Employee Student Loan Debt: 10 Things You Need To Know, Part One

Employee Student Loan Debt: 10 Things You Need To Know, Part Two

Student Debt Financial Stress Haunts Millennials and Older Workers, Too

What Tops Financial Stress for Employees?

The Student Debt Crisis is Growing and Affecting Your Workforce. What Can You Do?

Employee Student Loan Debt: 10 Things You Need To Know, Part One

Employee Student Loan Debt: 10 Things You Need To Know, Part One

by | Jan 29, 2018 | Blog

Employee student loan debt: 10 things you need to know, part one. What employers need to know about how student loan debt affects their employees.

The U.S. has a student loan debt crisis. And employers are paying the price.

Over 44 million Americans are carrying a total of $1.48 trillion in student loans. Forty percent of adults under 30 and 16 percent of adults overall live with outstanding student loan debt, according to the federal reserve’s 2017 Survey of Household Economics and Decisionmaking.

Chances are, your employees are among those affected. Employees facing significant student loan debt are more likely to defer saving for retirement, buying a home, getting married and having children. They’re also more likely to seek out a second full-time or part-time job to cover their expenses. As a result, their concentration, productivity and overall physical health suffers from the accumulated financial stress.

The financial cost of higher education is only increasing with time, matriculating well-educated, inexperienced and deeply indebted graduates into the workforce. In this two-part series, we offer you 10 things you should know about how student loan debt affects your employees:

1. Student loan debt is the second-biggest type of personal debt in the United States.

Student loans are one of the largest contributors to overall household debt among Americans, second only to mortgage debt. While the overwhelming majority of those loans are federally held, there has been an increase in borrowing from private lenders. Private student loans are ineligible for loan forgiveness programs or income-based repayment programs, complicating repayment plans and decisions on where (and how) to seek debt relief.

2. The amount of student loan debt Americans owe is getting worse with time.

In February of 2017, the Federal Reserve Bank of New York announced that student loan debt had grown for the 18th consecutive year and that the amount borrowed doubled in the last eight years, reaching a total more than $1.48 trillion owed. Not only are more students are taking loans for higher amounts but they are paying them back at a slower pace than in the past.

3. Student loan debt is affecting your workforce.

Sixty-eight percent of all new college graduates have student debt. Even if your employees don’t have significant amounts of student debt themselves (which is a relative assessment), they’re likely to have friends or relatives who do. Student loan repayment plans average at $351 per month and that number isn’t going down any time soon. It’s important to note that the average annual US salary for 24 to 35 year olds is $39,000. Student loan repayments are killing your employees’ financial wellness and are averaging nearly 10 percent of their income, replacing retirement contributions, mortgage payments and possibly even monthly health insurance costs.

4. The average debt per student has risen to nearly $30,000.

One fifth of graduated student loan recipients aged 25-39 take on extra employment in order to make payments on their student loan debt. Employees working a second job can mean lower productivity while at work and a difficulty in maintaining a reliable work schedule. Overworked employees are also more likely to experience fatigue and burnout from the added stress of juggling multiple jobs – as well as the stress from their student loan debt.

5. The average interest rate per student loan is approximately 5 percent, meaning your employees actually end up paying back significantly more than what they borrowed.

The interest rate paid by a loan recipient is dependent upon which type of loan and repayment plan that they have been given. For federal loans, the current amount for direct subsidized and unsubsidized (the type provided to undergraduates) loans is 4.45 percent. At the graduate level, the interest rate is 6 percent. For people 60 and over who take out loans to help younger relatives, the rate is 7 percent. Private student loans carry interest rates averaging 9 to 12 percent. Depending on the repayment or consolidation plans, these high interest rates can quickly inflate the initial amount of the loan and add tens of thousands of dollars to what an individual is trying to repay. And, interest and late fees are paid before any monthly payments are applied to the original loan amount.

And there’s even more you need to know. To learn more about student loan debt and your employees, be sure to read Part Two of this article here.

More on Student Loans and Financial Stress

Employee Student Loan Debt: 10 Things You Need To Know, Part One

Employee Student Loan Debt: 10 Things You Need To Know, Part Two

Student Debt Financial Stress Haunts Millennials and Older Workers, Too

What Tops Financial Stress for Employees?

The Student Debt Crisis is Growing and Affecting Your Workforce. What Can You Do?