Are your benefits mismatched with your employee population? The meaning of “balanced” depends on the company’s current workforce AND who they want to have come apply for work. Each industry has an emphasis on benefits that make sense for them…or they at least they should.
But really, take a look at what is offered at most companies -- fairly generic. Health benefits, check. Varyings forms of PTO or vacation, check. Many companies are touting benefits that are actually just following the law like the Family Medical Leave Act (FMLA). So what is out there to really make benefits offerings different?
More and more, companies are starting to explore the idea of “financial wellness” and looking at ways to offer benefits around here that are beyond the 401K. If you're trying to match the desires of your employee population with your benefit offerings, financial wellness is a great place to start.
Pricewaterhouse Cooper released their 2019 survey on financial wellness and the respondents defined financial wellness like this:
Take a look at the typical financial wellness plan for 95% of all companies in the services, retail and hospitality sectors. What do they offer? A 401(k), maybe an HSA, and access to a financial planner through the Employee Assistance Program. Offerings get pretty thin after those options.
But let’s pause for a second. To whom are these benefits most important? The white collar execs and the corporate workforce. These are very Boomer/Gen X centric benefits that are often not relevant to Millenials/Gen Z and their current financial position.
Notice what happens to the generational response when asked about what types of financial stress affect them the most:
Millenials/Gen Z are far more likely to be worried about finances in the here and now. Emergency fund savings, paying the water bill, getting groceries or medicine. Retirement is a long time away (18% care now about that) but not meeting my rent payment or paying the electric bill – that is an immediate concern. Financial wellness isn’t 50 years from now. It’s today and tomorrow and next week.
So why are so many companies that depend on the Millenial/Gen Z workforce not balancing their benefits portfolio to match these concerns? Well – what choices are out there? Financial wellness is just starting to enter the conversation and the options are growing, but where to start?
One option is emerging as a preferred benefit for hourly workers: Early Wage Access (EWA), which allows employees access to the pay they have earned ahead of their traditional pay cycle. When Branch released their 2019 report on what hourly workers are looking for, almost 80% said getting access to earned wages was helpful to very helpful for them.
FedEx, Wal-Mart, Planet Fitness and hundreds of other companies in the services, logistics, manufacturing, retail and QSR space have embraced EWA. They have found that a tool like this directly related to financial wellness because it keeps their team members out of financial difficulty caused by late fees or fines and away from the clutches of predatory lenders.
Advanced EWA providers like Branch take Financial Wellness a step further by including a free budgeting module to help associates understand where the money goes, anticipate upcoming bills and what they need to be aware of over the next 7 – 14 days.
Benefits are part of attracting people. They are a top reason why people come to work for companies. They are a differentiator for organizations and part of the company culture.
For example, we’ve seen companies are 2x more likely to attract applicants by offering EWA than a comparable employer not offering EWA. In this labor market, that is a huge and measurable impact on your business.
Change is coming quickly in this space. If you aren’t considering EWA as part of the benefit portfolio in 2020, be assured that your competitors will.
Paul Dixon has been in the HCM technology space for over 20 years and is currently with Branch.