How to Help Your Employees Improve Their Personal Finances

Managing personal finance is a struggle for everyone. For the fortunate, that struggle is figuring out how to address competing priorities: mortgage and student debt, retirement savings, rainy day savings, health care costs, child and elder caregiving. But for many more Americans, the financial struggle is elevated to a frightening level of immediacy: how to make ends meet, how to build savings when bills meet or surpass income, and how to avoid harmful debt and pay for surprise medical or repair bills.

To one degree or another, Americans’ financial lives are stressful. That stress manifests itself in every aspect of their lives, including in the workplace. Research, both before and during the COVID-19 pandemic, has shown that financial stress is an issue for employers as well as their workers. The trick for employers is knowing what to do about it.

Over the course of the pandemic, financial security has been featured regularly in the media and for good reason. For at least one year within a three-year period, more than 1 in 4 households (1 in 3 households with children and half of Black and Latino households with children) reported an inability to afford adequate food, shelter, or utilities.¹ And the struggle to make ends meet isn’t unique to low- and middle-income workers. In fact, 3 in 10 households making $75K–$100K annually report difficulty paying usual household expenses.² However, despite the buzz in the benefits industry about financial well-being, many employers have yet to figure out how to best navigate the complex landscape of financial wellness solutions, including how programs may tie to retirement, mental wellness, physical wellness, health care, diversity, equity and inclusion, and more.

With so many factors to consider, as well as the explosion of service providers and new technologies in the financial benefits marketplace, it’s no wonder that employers find financial wellness overwhelming. So how can organizations sift through the mire of financial wellness providers and cost-effectively address their workers’ needs?

Create a Financial Security Scorecard

To get a firm grasp on the numerous considerations concerning your people’s financial well-being, consider creating a financial security scorecard. A scorecard provides a visual representation of all the ways your employees’ financial situations affect the organization. Consider the following:

How employees are doing financially 

• What financial challenges do they face?
• Do they have a handle on their periodic expenses? Are they living paycheck to paycheck?
• Do they have the capacity to handle financial shocks?
• Are they on track to meet both their short-term and long-term financial goals?
• Do they have the financial freedom to enjoy life?

How employees’ financial stress affects them at work

• Are they taking time off work to handle their finances?
• Are they distracted by their finances while at work?
• Is their financial situation prompting them to look for a new job?
• Are their finances delaying the decision to retire?
• Is stress affecting their performance at work?
• Is stress putting strain on professional relationships and harming your company culture?

How stress affects your people’s mental and physical health

• Is stress impairing employees’ mental health?
• Is stress driving higher health care costs?

An effective scorecard doesn’t treat your employee population as a monolith. Employee needs are never homogeneous, and it’s likely that subpopulations have distinct financial situations that aren’t obvious when looking at your employee population as a whole. By sorting individuals into personas, based on key demographic identifiers, you gain a comprehensive view of the financial challenges your employees face.

Of course, your scorecard shouldn’t focus solely on your people’s point of view. Your organization’s perspective is also key. 

What’s Next

A scorecard allows organizations to take a snapshot of the efficacy of their current financial benefits offerings. Identifying shortcomings and areas of concern may allow you to better connect employees to current offerings while also helping you identify gaps that still need to be addressed to support your people’s needs. By reevaluating your scorecard periodically, you can see how outcomes have improved and make adjustments going forward.

With the myriad of concerns and choices around financial benefits, it can be intimidating for decision makers to commit to a course of action. A scorecard clears the clutter and allows you to address the quagmire of employee financial well-being in a disciplined fashion. Invest in your people with confidence, knowing that you’re offering benefits and programs that address their specific challenges and soothe your company’s pain points

We're proud to work with organizations that value their people. If you want to learn more, we’d love to talk.