A financially struggling workforce is a CEO problem How they can advocate for a cure
CEOs and other high-level decision-makers are no different from the people who keep their businesses running smoothly every day.
They too have been kept awake at night during the pandemic, and with many of the same worries – but different ones. A big? Their ability to overcome all uncertainties to achieve their strategic objectives such as manufacturing quality products, maintaining sustained profitability and creating shareholder value. It’s no surprise that the best results can be compromised when employees are under severe financial hardship.
It didn’t take a pandemic to make this point, but it brought him home. A Harvard Business School spot check Out of ten CEOs around the world, employee well-being was a top shared concern, as they rated their employees’ stress level as 9.1 on a 10-point scale. While a Conference Board survey found that 53% of business leaders expressed concern about the emotional well-being of their employees, 33% also noted their financial stress.
The link between company performance and employees who are under financial strain is well documented. It is something difficult to leave at home. According to a John Hancock Study, about 20% of Americans worry about money at work at least once a week; almost half spend time on their finances when they should be working.
As a result, employers are rethinking their benefit strategies and the role financial wellness solutions should play in the future. Especially after the shared pain of 2020, a growing number – 66%, compared to only 13% in 2013 – feel responsible to help relieve stress.
There is no doubt that business leaders are leading the charge given the cost of inaction. Start with a loss of productivity linked to financial worries, indexed by the Hancock study at 47 hours per employee per year. It goes beyond productivity, however. Americans are unable to save – for a medical emergency or for retirement.
The issue of retirement alone has long term ramifications for an organization, making timely retirement an integral part of any financial wellness initiative. When older employees cannot afford to retire, the pay gap between old and new entrants to the workforce is a cost, as are health care and employment liabilities. workers compensation. And the company also pays in lost opportunity costs when budgets cannot accommodate the next generations of workers. An estimate fixes the cost of an employee delays his retirement from one year to $ 50,000.
The financial health of employees poses a shared risk. It gives business leaders an important role to play in promoting the value of a meaningful financial wellness program that is optimized as much as possible to meet the individual needs of employees. Beyond just supporting the initiative, CEOs should also have influence over strategy as it develops, given the ultimate impact on business performance.
Here’s how to do it:
- The team behind the initiative matters.
The usual wall between benefits / human resources and retirement services must be broken down in order to drive the best financial wellness solutions. A joint task force will encourage reflection on a wellness program that addresses the interrelated nature of financial stress causes and remedies.
- Refine your knowledge on specific financial issues.
It’s easy to guess. For example, it is a fact that in a large workforce of young millennials, a certain percentage will be struggling with college loans. But the deeper and more extensive the dive into the employee base, the better the knowledge gained. Then, the better the financial well-being strategy becomes and more geared towards individual needs. More extensive knowledge can be gained through analysis of employee data, such as the extent of use of current benefits. Employee surveys improve the outlook. Personality analysis is also an invaluable tool for providing a deeply detailed profile of employee groups than the more typical generational segmentation. The financial wellness team can choose personality metrics that are relevant to their organization for better insight.
It should go without saying, but the financial impact of the pandemic on employees is critical to the design of the program. Many Millennials and Gen Xers – more than half, according to survey – used their retirement funds for non-retirement expenses. Solutions should be offered to address the need to replenish those accounts, but also to address what led to the initial need to borrow – whether it was the burden of student loans or credit card debt.
- See what solutions you have and what you need.
A lot of things can be hidden from view anyway. Your Employee Assistance Program (EAP) may well include financial counseling services in its range, something 79% of employee survey respondents said they would appreciatefor retirement planning only. Your menu of voluntary benefits is likely to include other overlooked services, such as legal benefits. And the audit can reveal a multitude of them that can easily be repackaged and promoted as part of the financial wellness plan. Others, depending on your needs assessment, can be added with little or no cost to the employer. Offering salary advances and / or early access to salary, for example, helps workers avoid expensive payday loans. The offering of such benefits alone is appreciated as it provides access that they probably didn’t have before.
- Promote the initiative in general and highlight its characteristics.
What can make or break any employee benefits program is the breadth of communications that highlight the need and its value. The more the message is tailored to specific groups of employees, the more successful the program will be. This means that communications need to be clear, direct, and written fairly simply, but they need to be routinely channeled through channels that will give them maximum visibility and buy-in. A hand-held webinar (we’ll come back to face-to-face meetings eventually) may work for some groups of employees, but others will pay more attention to a text campaign. An engagement strategy should also be built into the wellness program’s communication plan, with incentives offered (remember these don’t need to break the bank) to help increase awareness and l ‘registration.
Employees in financial difficulty are less able, over the long term, to meet their own work and life goals and hinder employers’ ability to meet company goals and objectives. It is a problem that senior managers have a responsibility to address. The male, after all, stops at the top.
Written by Daniel Bryant.