23 July 2021
Jobs, offices, and businesses are opening around the world after a year and a half. With the pandemic (hopefully) fading into the background, companies are starting to operate working from offices and resume hiring with 100% capacity. However, the effects of the pandemic involved a substantial hit on not just the medical vulnerability of the world but also our economical and mental state. More than 49% of employees worldwide have stated that they are now worried about their finances since the pandemic has taken a blow on their savings.
In times like this, employee financial wellness programs had helped – way before the pandemic began. With the programs, employees had the knowledge to pick the right investment opportunities and make the right financial decisions at any point.
But with the current economic volatility of the world, how can employers aid their employees with financial wellness programs?
Take the US – a developed country and a relatively fair model for where we want to be. A US survey by Plan Sponsor revealed that more than 31% of employees have no post-retirement savings. Most employees spend their savings on other items rather than thinking of the age of retirement where they will no longer have salaries. To most employees, retirement seems far off, and it may seem like there isn’t much need to start saving for retirement from a young age.
However, studies after studies have proven that starting to save a penny in your 20s every day might lead to you saving hundreds of thousands by the time you’re 60. And the truth is, you don’t need studies to understand the power of compounding.
Employers should provide professionals with the right plans for post-retirement that will demand little savings from a young age. Even if one is starting in their mid-40s, these plans shouldn’t be overwhelming to implement. It is critical for enterprises to have clear communication with the staff about the perks, benefits, and disadvantages of each plan as well. Employees should be aware of what they are subscribing to before they do it.
Companies should also provide professional administrators or financial advisors that will help the employees through the process.
A significant portion of today’s millennials is stuck in debt. With vague spending habits and high prices of commodities and gas, staying out of debt is impossible. Companies have a moral duty to assist employees in these situations. Debt can be in any form – mortgages, student loans, fees, taxes, or unsecured credit cards. They’re all equally painful.
Webinars and counseling sessions to help deal with different debts, and precise balances are a low-hanging fruit every enterprise should grab. Employers should be trained and educated over picking the right credit cards, interests for different types of loans. In this way, the employee is well informed before running into debts, by managing their own finances.
The pandemic has taught us a lot, but the most important lesson is how to be prepared for emergencies. Most employees found themselves financially helpless during the pandemic – as many as 49% of them were living from paycheck to paycheck. This has naturally stressed the minds of the employees, which in turn impacted their work performance.
Employers should offer employee savings plans that will automatically deduct funds from a person’s paycheck. The funds will then be allocated in the savings account that can be withdrawn during any emergency like a pandemic. From accidents, unwanted health issues, pregnancy, or any other trouble, employees should have multiple options of savings.
Another low-hanging fruit – employees should be counseled every once in two months regarding their finances. They should be educated about their financial health and wellbeing and maintaining the funds. Counseling sessions, one–on–one talks with advisors, videos, worksheets, surveys, and webinars should be arranged regularly to assure that none of a company’s employees are suffering in any way.
Having the right resources available at their fingertips, employees will have the chance to choose the pace they want to move ahead within their investments. If they have a question, they can get back to the company for insights. In times like the pandemic, these resources should come to the employees in handy for them to manage their finances well.
Employee financial wellness programs are an obvious win-win, with most leaders emphatically aware of the benefits they bring. Here is how you can learn to make the best strategy for an employee financial wellness program with EarlySalary.