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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.

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.

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.

5 Industries That Desperately Need Financial Wellness Solutions

5 Industries That Desperately Need Financial Wellness Solutions

by | Jul 12, 2018 | Blog

With the pension era over and Social Security projected to be tapped out within two decades, employers in every industry are stepping up efforts to help ease financial stress on employees by providing desperately needed financial wellness solutions.

This is smart: The majority of Americans report that money is a “somewhat or very significant” source of stress, with parents and younger adults reporting high levels of financial stress, according to the American Psychological Association.

The issue is bleeding into the workplace as nearly half of employees report that financial challenges cause the most significant stress in their lives, according to the 2017 Employee Financial Wellness Survey. “Stressed employees are found to be less productive, take more time off to deal with financial matters, are more likely to leave the company for higher compensation, and are more likely to cite health issues caused by financial stress,” the survey reported. This shows “a direct correlation between an employee’s financial well-being and a company’s bottom line.”

That’s why savvy companies are adding and boosting financial wellness benefits as a win-win. Nearly 60 percent of employers are “very likely” to and another third are “moderately likely” to focus on the financial well-being of workers beyond retirement decisions, according to Aon’s 2017 Hot Topics in Retirement and Financial Well-being report. While the subject has been on the radar for several years, more than half of employers say the importance has increased in the last two years.

Here are some fields where adding financial well-being programs can be particularly effective:

  1. Healthcare. These professionals may be struggling with large amounts of debt while juggling nontraditional hours. In some cases, student loan bills can equal or top a mortgage.
  2. Nonprofits. This sector has a bottom line focused on change, so employees may be paid less, grapple with modest resources and be asked to juggle tasks beyond their job description. Meanwhile, many nonprofits constantly seek new and additional funding, which can make the future unstable.
  3. Startups. Building a startup is hot, but keeping them running can be stressful. What’s more, employees may need to figure out stock options and, in some cases, how to properly manage a sudden windfall.
  4. Retail. These workers largely deal with wages lower than $10 an hour and sporadic schedules. With average rental rates nationwide topping $1,200 a month, paying the rent requires significant work.
  5. Manufacturing. This sector’s employers may be stressed about looming automation and the increased need for college degrees. Factories also continue to close nationwide, creating additional concerns.

Dawn Wotapka is a financial writer.