Employees are worried about money. Roughly half are stressed about their finances, and nearly two-thirds either say their retirement plans and Social Security won’t be sufficient to support them in retirement or they aren’t sure, according to PwC’s 2018 Employee Financial Wellness Survey.
And employers are answering the call for help. In a May 2018 Prudential survey, companies with financial wellness programs rose to 83%–up from 20% two years ago. The survey found that among the most common financial wellness tools employers are offering are portals that allow access to financial tools and content (67%), tools and calculators to gauge financial wellness (66%), and access to financial advice or advisers (60%).
But some enterprising companies are taking financial wellness one step further and addressing some of the key issues with which employees are wrestling. Here are some of the actions they’re taking:
While the use of incentive bonuses is falling–by 9% for executives (to 42%) and 7% for non-execs (to 37%) between 2017 and 2018–other types of bonuses are increasing in popularity, according to the Society for Human Resources Management (SHRM) 2018 Employee Benefits report. Among those seeing an increase were:
- 63% offer service anniversary awards (up 9% since 2017)
- 51% offer employee referral bonuses (up 10% since 2014)
- 48% offer spot bonuses (up 7% since 2014)
“Instead of cash money bonuses, more companies–including mine–are offering experience bonuses,” says Scott Grausnick, CEO of Harbinger Partners, an IT consulting and permanent placement staffing firm. He says the experience bonus may be an event on which the employee would never splurge, such as a concert at Madison Square Garden or a trip to the Masters golf tournament. “These types of bonuses improve employee happiness, but they also encourage work/life balance.”
Grausnick says that the gold watch for long-term anniversaries has morphed into a big cash bump to encourage retention. “At our firm, every employee gets a standard cash bonus on their yearly anniversary, then every five years, the amount is multiplied by a thousand, i.e., $5,000 for five years, $10,000 for 10 years, and so on,” he says.
HELP WITH EDUCATION AND STUDENT LOANS
Perhaps no financial issue weighs more on young employees than student loan debt. Financial information website Make Lemonadereports that the average 2017 graduate has roughly $40,000 in student loan debt–up from the $37,172 average per student in the Class of 2016.
But not Amanda Ponzar, chief communications and strategy officer at Community Health Charities, an Alexandria, Virginia nonprofit that raises awareness and resources for health and well-being. “Both my master’s degree and executive education were fully paid for by employers–that was probably worth more than $30,000,” she says. The degrees helped her earn more money and advance faster in her career, she says. For the executive education reimbursement at her last employer, she had to agree to remain employed with that company for a year after she completed the program or she would have to repay the cost.
Another option that’s getting attention is student loan repayment assistance, says John Light, a partner with Evolving Talent Group, an executive search firm in Katy, Texas. He says he sees more companies offering either stipends to help pay off loans or assistance with monthly payments, perhaps through a third-party student loan repayment plan (SLRP). SHRM’s research indicates that just 4% of companies offer such benefits, but Light says these forms of assistance can be a big incentive to attract talent and help employees with their finances.
“They’ve got to pay $600 or $1,200 or whatever the number is a month [in student loan payments]–that’s a huge chunk, when you’re 23 and getting on your feet,” he says. He cautions to check the fine print for “claw-back clauses,” like the one to which Ponzar agreed, which require reimbursement of tuition if you leave the company before a specific period.