By Treg Balding January
23, 2020
As we
kick off 2020, companies – large and small – may be thinking about new
workplace benefits strategies that can better position them as the employer of
choice. Although flex time, unlimited vacation and remote working continue to
be popular with employees, the topic of employee financial wellness can be just
as important. And there’s a reason why. Research continues to show that many
working Americans are financially stressed, particularly about their ability to
save money or plan for unexpected circumstances. For example, 40% of working
Americans have less than $400 in the bank for emergency expenses, Guardian
Life’s research showed.
This
poses an opportunity for employers to think about how to play a role in
increasing their employees’ financial confidence, particularly when it comes to
offering insurance products that can contribute to an employees’ bottom line,
and ultimately help them feel prepared for whatever life brings them.
Guardian Life did extensive research on
the major financial concerns impacting working Americans, and the findings
revealed the following three financial worries:
Paying
off college debt. One topic that continues to capture national
headlines is the crippling college debt that plagues so many Americans. For
example, seven in 10 working adults with college debt rate their finances as
the major source of their stress compared with four in 10 who have no college
debt.
Compounding
this stress is that fewer working Americans believe they are making good
progress toward paying off their college debt or saving for their children’s
college education compared with two years ago. What’s worrisome is that seven
in 10 parents plan to use some retirement savings and investments (stocks/bonds)
to pay for their children’s college education.
Loss of
a paycheck. Many Americans may overlook the need to protect their
paycheck if an injury or illness were to impede their ability to work. Yet,
three in 10 households have experienced at least one disability leave in the
past 10 years, and 55% say it had a major/devastating financial impact on their
household. Guardian’s findings underscore the need for employers to not only
offer disability insurance but to find ways to dispel the myths around
disability insurance, particularly because of the confusion caused by its name.
Preparing for a premature death. This is
a topic that many of us do not like to think about or speak about with our
families; however, being prepared financially in case of a premature death is
crucial. Our findings revealed that 88% of working Americans agree it’s
important that their family is protected financially in the event of their
premature death. The downside is that 60% of households have either no life
insurance or less than the industry recommended coverage amount. Unfortunately,
of those households who did experience a premature death, 75% are living
paycheck to paycheck.
Strategies Employers
Can Implement
Employers
can begin to do their part by diversifying their companies’ benefits offerings
and educate employees about how benefits are a vital component of a smart
financial plan. It starts with the following strategies:
Awareness:
Employers
may want to consider offering their workforce financial tools to help create an
understanding around basic financial concepts and insurance products, such as
disability insurance and life insurance, as well as college savings. Financial
tools, such as online needs assessment calculators, online apps, worksheets and
guides are a great starting point.
Education:
A
strong understanding of both workplace and individual insurance strategies and
how they differ will help ensure employees make the right decisions to help
secure their family’s future. For example, a life insurance policy through work
is a valuable benefit; however, evaluating the coverage amount and
supplementing it with an individual policy can make a big difference.
Workplace
solutions:
Consider
adding the following three employee benefits: a college debt and savings
benefit, disability insurance, and life insurance. By adding these three
employee benefits, the employer can demonstrate its commitment to increasing
financial confidence among its workforce. The reality is many consumers don’t
understand how these insurance products work or how they can help when needed.
Finally,
companies should consider working with the right partner to help them formulate
an employee benefits strategy that includes personalized communications
designed to resonate with employees and educate them about financial
preparedness. In doing so, employers could a find favor with their workforce
and ultimately brand them as a great place to work.
Treg
Balding is vice president, group and worksite distribution, with Guardian
Life. Treg may be contacted at treg.balding@innfeedback.com.
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