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DEI & Financial Wellness: Bridging the Retirement Race Gap

DEI & Financial Wellness: Bridging the Retirement Race Gap

by | Feb 22, 2022 | Blog

DEI & Financial Wellness: Bridging the retirement race gap. Learn how the retirement race gap affects your workforce, and how your company can prevent retirement insecurity by addressing it head-on.

According to a report by Morgan Stanley, white retirees have seven times the retirement savings of Black retirees, and five times the retirement savings of Latinx retirees, at work. Employers can help bridge the race gap. Start with a focus on employee financial wellness and equity.

What is the retirement race gap?

The retirement race gap is the disparity in retirement preparedness between Black Americans and Americans of color, and their white counterparts.

The retirement gap is fueled by inequality in the workplace

Black and Latinx employees are paid 26 to 39 cents less for every dollar that white employees make. However, when you factor in gender and race, Black and Latinx women are the least prepared and secure for retirement. For each $1 earned by white men, Latinx and Black women make 57 and 64 cents, respectively.  

The racial wage gap often leads to the retirement race gap because earning less over one’s entire career stifles growth and security into retirement. Companies can address these disparities by taking a deeper look at their own equity and compensation practices.

How to close the retirement race gap, while improving financial wellness and DEI

Research from T. Rowe Price suggests that the workplace is where most employees look for advice for their lifetime financial goals, and this is equal across races. However, the level of financial stress and support differs across races, and the trend continues well into retirement. Companies can support employees’ financial goals and disrupt inequality by addressing the retirement race gap. Moreover, doing so prioritizes employee financial wellness with a DEI approach.

1. Set fair, equitable hiring practices and promotion opportunities

Whether it be name bias or stereotyping, hiring discrimination helps concentrate people of color into jobs and industries less likely to offer retirement benefits. In such industries — accommodation, food and waste — less than 40% of workers are offered retirement benefits, according to Dr. Nari Rhee from UC Berkeley.

Companies can help close the retirement race gap by offering unconscious bias training and analyzing how it affects the hiring process. Some employers have taken it a step further and require applicants of color to be interviewed for all internal and external positions.

2. Host company incentives, like match contributions, to encourage benefits use

Events, contests and webinars can be an easy way to encourage employees and teach them about 401(k) tax benefits. A leading incentive that enhances employee engagement and loyalty is a match contribution program. Employees often see match contributions as an investment in themselves and their financial futures. And knowing retirement funds will be matched, employees are increasingly motivated to save.

3. Add financial wellness programs and education to employee benefits

Employees have different levels and causes of financial stress, so naturally, they each have different financial goals. Financial wellness programs can offer personalized help to address employees’ most pressing financial stress. Whether through 1:1 coaching and detailed calculators, financial wellness programs can help employees develop financial literacy and confidence, as well as money management skills.

4. Address the retirement race gap head-on and use 401(k) auto-enrollment to increase participation

If you already offer retirement benefits, consider auto-enrollment for all employees. Studies show that auto-enrollment substantially increases employee participation because employees are unlikely to opt out. Once enrolled, employees will likely make an effort to educate themselves on 401(k)s and contribute, and employers can facilitate such learning.

5. Track progress and revisit company goals annually

Closing the retirement race gap will not happen overnight; however, with continuous work and dedication, companies can curtail the wealth disparity. Keep track of company progress and engage employees for feedback — see how new initiatives work, and what old practices may need revisiting. It’s important to check in annually to take stock of progress made and opportunities for change.

Looking for a financial wellness solution? Consider Best Money Moves.

Best Money Moves can help your employees address their financial stress and become prepared for retirement, regardless of their stage in life or previous money habits. Best Money Moves offers personalized financial wellness resources and education, focused on solving your employees’ pain points. The program uses artificial intelligence and a human-centered design to measure employee financial stress and then dial it down with personalized solutions. Our budgeting tools, personal finance guidance and more help employees make more informed financial decisions and reduce their overall stress.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

4 Reasons to Care About Employee Financial Wellbeing

4 Reasons to Care About Employee Financial Wellbeing

by | Feb 7, 2022 | Blog

4 reasons to care about employee financial wellbeing. Thanks to the pandemic, employee financial wellbeing is a huge point of focus for many workforces. Here’s why that should matter to your team.

According to a 2021 Bank of America study, 95% of employers feel a sense of responsibility for their employees’ financial wellness. Indeed, employee financial wellness is the new normal for organizations — and for good reason. Financial stress has far reaching effects far beyond an employee’s wallet, impacting everything from productivity, to mental health and even retention.

Here are 4 reasons why financial wellbeing is a must-have in your employee benefits package.

1. Financial stress lowers employee productivity.

More than 60% of employees say that their financial stress has increased since the onset of the COVID-19 pandemic, according to a PwC survey. And that financial distress can easily seep into an employee’s work life and disrupt job performance. 

In the same PwC survey, employees whose financial stress increased due to the pandemic were four times more likely to admit that finances are a distraction at work. And over time, long-term stress can lead to health issues, burnout and potential resignations.

Investing in financial wellness benefits can support employees’ overall wellness and help them focus while at work. More than 80% of employers agreed that financial wellness programs lead to greater employee engagement and productivity.

2. Focusing on financial wellbeing and financial wellness  can promote retention and attract new talent.

Financial stress, burnout and other COVID-19 related factors have contributed to widespread resignations at a higher-than-usual rate, also known as “the Great Resignation.” Offering financial wellness benefits is a way to support existing and future employees during this uncertain time — and employees recognize this as well.

Employees have shown a preference for companies who are invested in their financial wellbeing. A PwC study showed that most employees would consider leaving their current employer, if they came across another that cares more about their financial wellbeing. 

Again, financial wellbeing impacts much more than just employees’ pockets — it impacts health, stability and security, too. So, making financial wellness an integral part of overall wellness can go a long way with both future and existing employees.

3. Financial wellbeing is tied employee mental health more than you think.

COVID-19 has made both employees and employers reconsider their approach to mental health. In addressing employee wellbeing and providing support, employers must take a comprehensive approach and consider financial wellbeing, as well. 

Money reaches all aspects of life — family, home, work and personal health — and it has a huge effect on overall wellbeing. Financial stress and its effects do not function in a silo. In fact, a third of employees said their mental health negatively affected their job performance in 2021, per an Aflac report. 

Whether worrying about bills or retirement, financial stress can cause depression and anxiety, especially amid long-term uncertainty like a pandemic. Half of American employees have high anxiety about health care costs beyond what their insurance covers. And more than a quarter of the U.S. workforce currently describes itself as “depressed,” says a Gartner HR survey.

The more support employers can offer, the better, and a tangible form of support is financial wellness benefits. It can foster employee satisfaction and improve wellbeing.

4. Employees need more financial benefits than retirement and student loan assistance

Financial wellness is an all-encompassing benefit that applies to all employees in some way. Not everyone has the same financial goals, especially within a multigenerational workforce. Financial wellness takes a more personalized approach, it allows employees to address the financial goals and stress that matters most to them.

Older employees may not be attracted to student loan benefits, whereas some millennials may not utilize retirement plans. Over 80% of employees want personal finance benefits and guidance beyond typical retirement plans and safety net insurance. This mismatch in offered benefits and employee needs often causes offered benefits to go used.

Instead, by offering financial wellness programs, like Best Money Moves, employers can help employees manage their personal finance goals and stress. 

Best Money Moves is a mobile-first platform that offers personalized financial planning and coaching resources, focused on solving your employees’ pain point. The program uses artificial intelligence, along with a human-centered design, to measure employee financial stress and then dial it down with personalized solutions. Our triggers and alerts system — as well as budgeting tools, personal finance resources and more — help guide employees to make more informed financial decisions and reduce their overall stress.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

3 Reasons You Need Financial Wellness in the Workplace

3 Reasons You Need Financial Wellness in the Workplace

by | Feb 2, 2022 | Blog

3 reasons you need financial wellness in the workplace. Morgan Stanley’s new study, The State of the Workplace  finds employees in need of financial wellness support and looking to their employers for help.

COVID has caused huge changes for employers and employees alike. That’s why Morgan Stanley at Work conducted a first-of-its-kind financial benefits study, called The State of the Workplace. The study, which compiled responses from 1,000 employed U.S. adults and 600 HR executives, attempts to chart how COVID-19 has impacted workplace experience. 

Among the many insights offered from the survey, one theme presented itself again and again: Employees’ financial stability took a hit during the pandemic and it’s time for employers to step in and help.

These are the top three reasons why your team needs financial wellness in the workplace.

1. The pandemic hurt employee financial security across all industries and positions.

Ninety-one percent of employees surveyed in Morgan Stanley’s report have faced personal finance challenges, such as household budgeting, debt reduction and emergency and short-term financial savings. This led to reduced financial contributions across 401(k) savings accounts, long-term and emergency short-term savings, and debt and loan payments.

Both employees and employers noticed a decrease in work productivity and performance due to this personal financial stress. Sixty-four percent of employees report that these stressors negatively impacted their work and personal life, while 82% of employers are concerned that personal financial issues affect work productivity.

Employers now have an increased responsibility to help their staff maximize their financial benefits; after all, if employees aren’t constantly worried about meeting their financial obligations, they can be more focused and productive at work.

2. When it comes to evaluating employer benefits, employees are focused on financial wellness.

With uncertainty fueled by the pandemic, employees are starting to reassess whether their current employer financial benefits meet their needs. Morgan Stanley noted that 61% of employees are paying more attention to what benefits they are offered. This percentage increases to 69% among Millennial employees, who are more focused on reviewing these benefits compared to the overall employee population.

Both employees and employers are looking for financial guidance. More than 4 in 5 employees believe that employers should be involved in helping employees understand how to maximize their financial benefits, while 95% of HR executives say that re-evaluating their companies’ 2022 benefits package is a moderate to high priority.

3. Employee financial wellness plays an important role in attrition and retention.

Meanwhile, employers acknowledge that re-evaluating the benefit plans offered is a top priority to stay competitive and retain talent

If your employees feel their financial needs are supported with a comprehensive benefits plan, they are also more likely to be productive on the job and stay at their company long-term. Ensuring that companies have the proper financial support for their employees will lead to retention of top talent. Ninety-one percent of employees say they would feel more invested in staying with their current employer if they have financial benefits that fulfill their needs. 

Employee retention is especially important if employers want to remain competitive. The State of the Workplace report indicates that 79% of HR executives believe that lack of financial benefits will result in attrition.

Need a first-in-class financial wellness solution? Consider Best Money Moves.

Financial wellness programs, like Best Money Moves, can help employees regain control of their finances. Best Money Moves has tools and features that help employees measure their financial stress, budget for monthly expenses, pay down debt and plan for emergencies. Employees can talk to trained professional financial counselors and educate themselves about everything from investing to co-signing loans to buying their first homes with access to a library of over 700 articles, videos and calculators.

Employers want a financial wellness program that is expansive, engaging and suited to meet each of their employee’s unique needs and they’ve found it in Best Money Moves

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

HR and Omicron: Financial Wellness Is Key to Employee Wellbeing

HR and Omicron: Financial Wellness Is Key to Employee Wellbeing

by | Jan 26, 2022 | Blog

HR and Omicron: Financial wellness is key to employee wellbeing. The Omicron variant of COVID-19 is causing major stress for your employees. Offering financial wellness benefits could provide needed relief. 

The Omicron variant of COVID-19 is leading to more shutdowns, changes to return-to-office plans and greater all around stress for your employees.

Research from the Society for Human Resource Management (SHRM) indicates nearly a quarter of organizations are  fairly or very concerned about Omicron. The same percentage of workers expressed concern about the variant causing a reduction in their hours.

How can you help employees deal with mounting financial stress as Omicron extends the pandemic? One way is to lean on financial wellness tools and programs, like Best Money Moves.

Employee financial stress is on the rise as the pandemic drags on.

The potential for a loss of work and an overall slowing of the economic recovery from the pandemic may be putting a financial strain on your workers, especially because the number of people struggling to pay their bills was already increasing before Omicron began spreading in the U.S. 

The U.S. Census’ Household Pulse Survey found that about 18% of people indicated more than one financial difficulty in September and October 2021, a month prior to the first detected case of Omicron.

Many people have been struggling to catch up on unpaid bills and mortgage payments as government interventions, like stimulus checks and enhanced unemployment insurance, went away. Some also began going back to the doctor’s and have had to deal with increased medical bills in recent months, while others faced difficulties with childcare costs as their offices returned to work. 

Providing budgeting tools, credit check-ins and resources on debt management can reduce stress and, in turn, improve productivity at work.

Another area financial wellness programs can help with is emergency savings preparedness. In a 2021 survey from SSRS Omnibus, 25% of respondents indicated having no emergency savings at all, an increase from 21% the year prior. An additional 26% said they have some emergency savings, but not enough to cover their expenses for three months. Resources that show employees how to create robust savings can make it easier to survive crises — like the new variant — with less financial strain

Employee financial wellness is more important now than ever before.

Offering financial wellness benefits to employees has also become more common during the pandemic. Another recent SHRM survey found that 26% of HR professionals said their organization added benefits or expanded existing benefits to help employees manage their financial stress since the start of the COVID-19 pandemic. Organizations that already offered the benefits said they had been used more since the start of the COVID-19 pandemic, particularly financial planning and coaching.

Financial wellness programs are desired by most employees — 87% want help when it comes to personal finance, PwC found — and they are proven to work. Less stress improves overall health, lowers healthcare costs and reduces the risk of employee burnout and resignation. 

Plus, they can improve the productivity of your workforce: 68% of workers in a Prudential survey said their financial wellness benefits allowed them to be more focused at work. Further, 8 in 10 said they were more likely to stay with an employer that demonstrated a commitment to helping them strengthen their financial resiliency.

Best Money Moves can help.

Best Money Moves uses artificial intelligence to power a mobile-first platform that measures employee financial stress, then dials it down with a unique content-mapping system that helps solve your employees’ pain points. The triggers and alerts system, as well as budgeting tools, personal finance resources and more, help guide employees to make smarter financial decisions and reduce their overall stress. 

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

Improve Employee Retention in 2022: Utilize Financial Wellness Benefits

Improve Employee Retention in 2022: Utilize Financial Wellness Benefits

by | Jan 11, 2022 | Blog

Improve employee retention in 2022: Utilize financial wellness benefits. Financial stress is an increasing contributor to high employee turnover and now, more than ever, your team needs relief.

Last year, a record 38 million Americans left their jobs to look for new opportunities. As a result, employers in 2022 are dealing with low retention and high turnover, leading to a loss of top talent, increased operating costs and an overall unstable work environment. 

Research shows that stress is a main reason people leave their current jobs. So, helping your employees tackle their stress can keep your retention up — and battling financial stress specifically is key. 

Improve Employee Retention by Reducing Employee Financial Stress

In the American Psychological Association’s 2020 Stress in America report, 63% of adults said their finances were a significant source of stress, nearly a 20% increase from the previous year. 

The pandemic has not helped matters, as many are still grappling with the economic effects of the health crisis, and Americans remain deeply in debt, with household debt reaching a record $15.24 trillion in the third quarter of 2021. 

The 2021 Employee Financial Wellness survey conducted by PwC, found that 63% of surveyed employees felt that their financial stress had increased due to the pandemic. And 72% of those employees indicated that they would be attracted to a new employer who cared more about financial well-being than their current place of work. 

Incorporating financial wellness programs like Best Money Moves in your benefits package can give your employees the tools they need to lower their financial stress and become happier at work. Data from prudential found that users for financial wellness programs report better mental health, lower stress and better physical health than non-users.

Plus, financial wellness programs have the added benefit of increasing productivity. A 2020 Prudential report found that 6 in 10 U.S. employees said they were more committed and more productive when employers demonstrated a commitment to their financial wellness.

Keep Your Team Where they Belong with Best Money Moves

The strain of the pandemic makes financial wellness benefits more essential, and companies that already offer them have seen an increase in usage over the past year and a half. In a September report from SHRM, 22% of the surveyed HR professionals said their financial coaching benefits had been used more since the start of the pandemic. 

Best Money Moves can help your employees address their financial stress and improve your retention in the new year. The program uses artificial intelligence to power a mobile-first platform that measures employee financial stress, then dials it down with a unique content-mapping system that helps solve your employees’ pain points. Our triggers and alerts system, as well as budgeting tools, personal finance resources and more, help guide employees to make smarter financial decisions and reduce their overall stress.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.