Re-Thinking Employee Benefits After COVID-19

Even as some employees head back to work, the financial burden on frontline workers remains severe. The ability to once again deposit a paycheck will not likely alleviate the mounting financial stress of the past several months.

Prior to the pandemic, one in three employees said their personal finances are a distraction at work and one in ten employees said that financial stress has impacted their attendance. Those numbers will likely increase as a result of COVID-19.

The pandemic shed light on the extreme financial vulnerability of frontline workers. Employees are the key to the well-being of a company, and a company has a responsibility to support the well-being of its employees. As companies reopen, employers can use the opportunity to think about supporting their employees beyond traditional health and retirement benefits, which are important, but may not be enough.

Employee financial wellness programs are an innovative way to supplement traditional benefits. These programs help employees reach their financial goals and achieve long-term financial stability. It may be tempting to think the financial lives of employees are none of your business, but financial challenges can show up in the workplace. The converse is also true. Research suggests that more financially stable employees can contribute more on the job by being more engaged and less stressed.

Identifying the right employee financial wellness program is not hard, but it is very important. An employee financial wellness program that does not align with employee goals or needs will be a wasted effort. The new Guide to Employee Financial Wellness can help. A collaboration between National Fund for Workforce Solutions and the Social Policy Institute at Washington University in St. Louis, the guide combines four years of research and best practices from a wide range of employers selecting and implementing employee financial wellness programs.

Employers who take the time to understand their employees’ financial situations and needs will be rewarded. For example, PayPal recently conducted an audit of hourly and call center employee compensation and discovered that 60% lived paycheck to paycheck, despite market-level wages. As a result, in addition to raising wages, PayPal CEO, Dan Schulman, implemented financial wellness education for employees.

There are plenty of ways to learn about the financial well-being of your employees without tying data points to specific people. It’s also critical to ask employees specifically what they want and need (a sample survey is included in the guide). Employers should be prepared to activate solutions and track their effectiveness in order to demonstrate transparency and empathy with employees.

There may be uncertainty in introducing a financial wellness plan right now, but the benefits are long-term and, in some cases, do not cost the employer money. Supporting employees financial goals leads to more engaged and less stressed employees, and that’s good for everyone, especially right now.

Ellen G. Frank-Miller, PhD

-- Senior Scientist and Adjunct Professor, Social Policy Institute at Washington University in St. Louis.