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What Does Financial Wellness Look Like for Women?

What Does Financial Wellness Look Like for Women?

by | Sep 7, 2018 | Blog

Pay equity is a huge barrier to women’s financial wellness in the workplace, but it isn’t the only one. Most women haven’t used retirement calculators and don’t have backup plans if forced into retirement. They’re not going to ask for help, but employers who provide the right tools can help them help themselves.

Everyone knows: Women make up 46.8 percent of the American labor market, but they still earn an average of 20 percent less than men in the same position. Pay isn’t equitable by any stretch of the imagination.

Even in situations where women and men are offered the same job, women are initially offered salaries up to 45 percent less than what men are offered, according to research from Hired. Hired’s research underscores how critical it is for women to advocate for themselves in negotiations until legislation and corporate policies better support pay equity.

Pay equity isn’t the only issue women face when it comes to financial wellness. Research from Transamerica Center found that less than 10 percent of women have used a retirement calculator and barely 20 percent had a backup plan if they were forced into retirement sooner than expected, either because of job loss, health issues or family obligations.

Why? An argument posed in a MarketWatch article claims that “societal norms and cultural messages undermine [women’s] ability to gain financial literacy and investment expertise.” Research shows that for women, finances, especially issues with personal finances, are generally associated with emotions of embarrassment, shame and fear. Even if women know they need to be more financially literate, they might not ask for help in gaining the knowledge.

Companies know they have a serious problem when it comes to women, pay equity and financial wellness. While both men and women feel financial stress, women feel higher levels of it. And, it causes more complications in their work lives.

That’s where there’s an opportunity for employers to help. Employer-sponsored financial wellness programs like Best Money Moves can bypass cultural barriers and social norms to give women access to the tools they need to measure their financial stress, learn how to manage their money around issues ranging from student loans to mortgages, elder care to relationship issues, and get on track with saving for retirement. The best part about employer-sponsored financial wellness programs is that it takes away any shame or embarrassment associated with asking for help and simply provides the best tools for employees to help themselves.  

Employers might also consider adding policies that pledge equal pay for equal work, especially if they’re in the process of recruiting more women. And with unemployment at 3.9 percent (nearly an all-time low), it doesn’t hurt to work on policies that will attract a demographic that makes up nearly half of the workforce.

First Look at the Future of Financial Wellness

First Look at the Future of Financial Wellness

by | Sep 5, 2018 | Blog

Financial wellness has generated a lot of buzz recently and with millions of dollars pouring into FinTech development it’s time to take the first look at the future of financial wellness through the lens of a recent Senate hearing.

On August 21st the Senate Health, Education, Labor and Pensions Subcommittee (HELP) held a hearing on Primary Health and Retirement Security. It featured a roundtable discussion on “Financial Literacy: The Starting Point for a Secure Retirement” that focused on the effectiveness and future of employer-sponsored financial wellness programs.

“Although we are in the early stages of assessing the impact of these programs, we are seeing encouraging results in terms of both engagement and the actions individuals take to improve their financial wellness after engaging with digital and/or on-site financial wellness services,” Vishal Jain, a VP in Prudential Financial’s Workplace Solutions Group, testified.

Lynn Dudley, SVO, Global Retirement & Compensation Policy at the American Benefits Council noted the areas in which companies are seeking to help their employees. In addition to helping employees deal with student debt and setup education savings programs for their children, like Section 529 plans, employers are also helping employees develop emergency saving funds (since roughly half of Americans can’t afford an unexpected expense like an emergency transmission repair). Dudley also mentioned the recent IRS private letter ruling that might make it easier for more companies to help their employees with student debt.

Scott Astrada, Federal Advocacy Director at the Center for Responsible Lending, was critical of payday lending programs because consumers can easily become trapped in a cycle of debt that affects their retirement savings efforts. Interest rates on payday loans can be as high as 400 percent on an annual basis. Astrada believes state interest rate caps could offer some relief to those who utilize payday loan services.

Future financial wellness programs will take advantage of technology to streamline communications. Specifically, the electronic delivery of retirement plan documents could enhance benefits communications.

“In particular, legislation that further encourages and facilitates the use of auto-enrollment and auto-escalation can enhance both retirement plan participation and savings rates. And, provisions that remove impediments to the inclusion of guaranteed lifetime income solutions as part of a retirement plan can better ensure employees have access to the products they need to effectively manage investment and longevity risks during their retirement years,” Jain testified in support of the Retirement Enhancement and Savings Act (RESA) and further legislation.

Do You Know How Unprepared Employees Really Are?

Do You Know How Unprepared Employees Really Are?

by | Aug 28, 2018 | Blog

Long-term healthcare is expensive and although most Americans will need it, it’s surprising to know how unprepared employees really are.

Long-term healthcare is a tough topic to discuss because it forces people to confront their mortality, but new research from Moll Law Group underscores the importance of saving for the costs of long-term care, like a nursing home or assisted living.

More than 60 percent of Americans have nothing saved for long-term care. Why? Less than half of Americans think they’ll need it. Unfortunately, 70 percent of Americans will.

That means there are millions of people that are seriously unprepared for future healthcare expenses and some of them are your employees.

Housing costs for long-term care are astronomical. Average costs for assisted living are $45,000, semi-private nursing homes are $87,775, and private nursing homes are $97,455. These housing costs are a far stretch from the $25,000 in savings Americans thought would be enough to cover long-term care.  

This isn’t just a crisis for the future, it’s a concern many face presently. A new survey from Bankrate found that “For younger baby boomers (ages 54 to 63), money is the top concern keeping them up at night. Thirty-nine percent say financial worries occasionally keep them from falling asleep.” Younger baby boomers are wrestling with high costs for education, housing, and they have aging parents to worry about. All of these factors pull them further from their retirement goals and increase their financial stress.

The process and associated costs of aging don’t need to be unexpected, but often (at least for half of those surveyed by Moll Law Group) the decision to place a loved one in long-term care is unexpected. Although there’s no knowing if or when it will happen, by understanding the likelihood and estimated expenses families can make the right decision without as much financial strain

It’s time to stop avoiding the inevitable and start preparing for unfortunate events that are likely to happen later in life. Employers should encourage employees to contribute to their 401(k) program and offer an employee match. It’s worthwhile to re-approach healthcare and retirement plans to see where employers can better help employees tackle the incredible cost burdens they, or a close family member, will most likely encounter.

10 Quick Highlights from SHRM’s 2018 Benefits Report

10 Quick Highlights from SHRM’s 2018 Benefits Report

by | Aug 21, 2018 | Blog

SHRM’s 2018 employee benefits report is out and we’ve got the top 10 highlights on topics like healthcare, retirement, paid leave, and wellness programs.

Society of Human Resource Management (SHRM)’s 2018 Employee Benefits report is here just in time for National Wellness Month!

Here are our quick 10 takeaways:

  1. Healthcare is Essential. An impressive 95 percent of companies with less than 50 full-time employees provide some form of healthcare coverage even though they aren’t obligated to.
  2. Keep it Casual. More than 60 percent of organizations offer casual dress benefits. The most popular benefit is one day per week when employees are welcome to  “dress down.”
  3. Referral Rewards. Employee referral bonuses increased by 10 percent (to 51%) since 2014. Low unemployment and tight competition makes it that much harder to find quality hires, so why not reward great employees for great referrals?
  4. Investment Retirement Advice. Over half of organizations offer either one-on-one or online investment retirement advice to their employees to help reduce stress concerning retirement readiness.
  5. Wellness Challenges Work. Companies hosting competitions and challenges grew 10 percent over the last year. Competitions and challenges can be effective tools to increase engagement with wellness benefits.
  6. Flexibility Bonus Benefits. Flexible work arrangements are a win-win. Employees experience a better work-life balance. Employers get a reduction of “real estate” costs and are better suited to match customer demands of a 24/7 culture.
  7. Tech Benefit Trends. More than half of organizations offer company-owned smartphones for business and personal use. Surprisingly, almost 20 percent of companies offer free computers for employees’ personal use.
  8. Smoking Costs. Nearly 20 percent of organizations charge a higher premium for healthcare coverage of employees who smoke because of the numerous health risks smoking poses.
  9. Unused Paid Leave. Employees fear falling behind, don’t believe anyone else will step in while they were away, or want to show how dedicated they are to their job. Encouraging employees to use vacation time may reduce turnover and its associated costs.
  10. Stress Management Matters. Stress can be detrimental to productivity, and there’s no shortage of things for Americans to stress about, so it makes sense that companies offering onsite stress management programs as a benefit tripled over the past 5 years. 

Effective wellness benefits lower stress, create a better work-life balance and give employees the chance to relax on their off time so they return with higher job satisfaction and improved productivity. Take advantage of National Wellness Month as an opportunity to review your current wellness plan and determine what the best benefits are for your employees.

What Are Your Employees Hiding From You?

What Are Your Employees Hiding From You?

by | Aug 15, 2018 | Blog

It’s about time you learn what your employees don’t want you to know about their financial situations. Find out what “faking normal” is and how wellness benefits can reduce financial stress.

“Faking normal” is a term that Elizabeth White uses in her powerful TED talk on the personal finance crisis in America. The term describes what most Americans’ facing serious financial instability are prone to do –  pretend everything is fine. Some of your employees are probably “faking normal” right now.

“The truth is it really doesn’t take much. The median household in the US only has enough savings to replace 1 month of income. 47 percent of us cannot pull together $400 to deal with an emergency. A major car repair and we’re standing at the abyss,” White says. This is a reality for many Americans, regardless of education or employment history.

“Shame keeps us silent and siloed,” she adds, “We live in a world where success is defined by income. When you say that you have money problems you’re announcing, pretty much, that you’re a loser.” For many of those struggling with debt, the people closest to them would never know because they take great pains to hide what’s considered to be a failing.

White believes individuals need to hold themselves accountable financial failings, but it’s important employers recognize, “systemic factors that have caused a $7.7 trillion retirement income gap,” like, “flat and falling wages, disappearing pensions, through the roof costs on housing, pension, healthcare and education,” that have built over the last three decades.

Until there’s large-scale reform to address the financial crisis, White recommends “smalling up.” She describes it as, “figuring out what you really need to feel contented and grounded.” An example she uses is a friend that drives beat-up cars but loves music so much they would scrape to save and spend $15,000 on a flute. Employers offering financial wellness benefits can help employees recover from debt and build budgets so they can spend their money on what matters most to them.

White says it’s also time for skilled workers to embrace “bridge work,” which she describes as jobs that don’t utilize the education or work experience that someone may have built up. She’s not suggesting that people be content with it, she’s suggesting that “bridge work is what we do in the meantime while we’re figuring out what is next.” Supporting employees that might need to work a side hustle to pay down debt and build savings can reduce some of the stress associated with maintaining appearances that all is well.  

It’s clear that even if employees are well educated and appear financially sound, there’s a good chance that some of them are acting as if everything is normal while dealing with high levels of financial stress. Employers who acknowledge this and offer financial wellness benefits are likely to see an ROI with higher job satisfaction and thus, better retention.

Revealing Research on Financial Stress and Productivity

Revealing Research on Financial Stress and Productivity

by | Aug 14, 2018 | Blog

Revealing research from Fidelity Investments highlights the toll financial stress takes on productivity through increased absenteeism.

Absenteeism doubles for employees with high levels of debt, according to a recent study by Fidelity Investments.

The study focused on the four pillars of well-being (financial, health, work, and life) and found that employees struggle most with their financial well-being. A whopping 98 percent of respondents reported feeling stressed in the past three months. Employees reported high levels of stress caused by debt (33%), saving for the future (34%), their job (47%), and their weight (30%).

Workers with high levels of debt were very unlikely to be in “excellent” health, only 14% compared with 35% of workers without debt issues. Those struggling with debt were also less likely to get enough sleep and more likely to be frequently stressed or anxious. On average, employees with the highest levels of debt missed an additional full week of work more than those with the lowest levels of debt.

Past-due medical bills were the leading indicator of workplace absenteeism, followed by payday loans, personal loans, retirement plans, and mortgages. Surprisingly, student loans and credit card debt were not significant causes for employees to miss work.

“When it comes to total well-being programs, employers have traditionally focused on health, but have recently expanded efforts to include financial wellness. Financial wellness programs have gone a long way toward helping workers to create a budget they can live with and have helped many employees consolidate and/or minimize debt,” said Jeanne Thompson, head of Global Workplace Insights, Fidelity Investments.

Strong healthcare plans, retirement plans, and payday advance programs could reduce absenteeism and help employers take back productivity. In order for those systems to be effective, however, employees must learn how to manage their money. Financial wellness programs, like Best Money Moves, lower the high levels of financial stress employees experience by helping them take control of their personal finances.