Want to Be a Great Place to Work in 2024? What Could Derail That, and How to Get Ahead of It
Now that benefits plans are in place, open enrollment has drawn to a close, and goals for 2024 are defined, you might be breathing a sigh of relief, if you’re an HR leader or benefits administrator. But if you aspire to be the kind of workplace that draws top talent, you might be overlooking some critical steps you need to take now. Recent research reveals that at the top of your list should be a big focus on helping employees achieve financial wellness.
How a Financial Wellness Fail Could Destroy Chances to Be a Great Place to Work in 2024
Financial problems can be a drag on employees’ ability to improve most other measures of wellness beyond financial wellness—such as on their social relationships and their mental and physical health—because virtually all measures of wellness require financial flexibility and resources. As the song goes, “Money changes everything,” including the ability to both cope with social, emotional and medical problems, and do the things that result in overall well-being. When finances are stressed, so are your employees.
Employee Wellness Is About More Than Just Having Great Benefits Plans
Financial stress can penetrate deep into a company and its culture. A 2023 study by Workplace Intelligence for BrightPlan found that high financial stress impacts mental health, according to 72% of respondents, as well as social health (64%), and physical well-being (60%). About 64% of respondents say financial stress has worsened their relationships with friends and family. And 72% say they’ve passed up opportunities to spend time with family, friends, and coworkers because they couldn’t afford to do so. Financial stress also impacts engagement and productivity, with respondents losing over a day of productive work per week, according to this same study. Even executives aren’t immune: About 76% of C-Suite and HR leaders say they’re stressed about their finances.
The converse is also true: Wellness is associated with a variety of positive business outcomes. Research provided by Fortune for its 100 Best Places® to work found these great places to work outperformed their peers even in a recession. From January 3, 2006, to February 1, 2014, the group of companies where employees were described as “thriving” saw their stock performance increase 35%, while the S&P 500 had just a 9% gain. Furthermore, 60% more employees at the 100 Best say their workplace is psychologically and emotionally healthy compared to a typical employer. The same research showed that depending on the industry, turnover rates of 100 Best companies are 26% to 68% better than those of their industry peers.
Beyond the Statistics: Real People, and Why Benefits Programs Often Fail
Take, for example, “Maria,” who represents a typical employee who is part of “the sandwich generation”: people who care for an elderly parent or other relative while raising their own children. She’s a great employee, has received commendations and a promotion, and really wants to continue working at her current company.
But she’s facing serious financial distress because of uncovered medical expenses she must pick up for her relatives and children, and she needs to come up with extra money on top of that to move to a place where her mother, who has cancer, can stay with Maria and her children in the same home. Scraping up first and last month’s rent, plus a deposit, looks like an impossible task to Maria.
How Do You Ensure Benefits Programs REALLY Promote Wellness and a Better Place to Work?
If people who understood her benefits plan only knew her dilemma, they could make valuable suggestions about how she could better use the company’s generous benefits plan. But Maria isn’t comfortable sharing her full story—because most employees don’t want to discuss their personal situations with their employers for fear that they might be perceived as less able to do their jobs. However, she recently approached her employer and asked for a raise, which was denied due to a company moratorium on salary increases for the next six months.
It was a trust-breaking moment for Maria. She no longer felt that her company “had her back” when she was facing huge obstacles. The saddest part is that she didn’t know that her company offers benefits that could be used to ease her situation, so she reluctantly interviewed for a new job at another company that pays a higher salary, but is an overall lower total compensation package. Her current employer will probably lose her, all because she doesn’t understand how her current benefits could help her get through a tough, urgent situation. Hence having a great benefits plan, alone, is not enough to hold on to a valuable employee.
Replace Trust-Breaker Moments with Trust-building Experiences
Suppose, for example, that Maria had an app that was specifically aware of Maria’s benefits and could help her understand her options. And suppose she could then talk with a financial advisor who could make helpful, practical suggestions. For example:
- Maria could take a penalty-free withdrawal from her 401K of up to $1,000 under recent rules changes.
- She could also take out an emergency loan against her 401(k) through her company’s retirement plan, and pay that money back over time, to cover the costs of a new rental, or to make a down-payment on a house. She could easily borrow $10,000-$20,000, which would cover the move.
- She also has both an FSA and HSA at work, but nobody has ever explained to her how much less she would pay for expenses not covered through her health insurance, if she paid with the pretax money that her company even matches. The financial advisor—who’s a fiduciary who must take Maria’s best interests into account in all advice—could explain all of this, and help her to understand how to sign up for this and how to get reimbursed. She could save about $4,000 each year just by using these benefits.
Imagine Maria’s relief and gratitude if she were to get this help. She wouldn’t have to make a move to a new job on top of everything else she’s dealing with. Essentially, a “trust-breaker” could be replaced with a “trust-maker,” also reducing employee churn and all its associated costs. Maria would tell her friends and social media connections how relieved she is that she’s probably going to be able to make the changes she needs to cope with her new situation. She would feel a greater sense of trust in her employer, because they helped her out when she really, really needed help.
She’ll likely also look for ways to return the favor. Studies show that employees at companies in the 100 Best Companies put in 70% more “discretionary effort”—putting in extra effort in their jobs—compared to typical workplaces. Multiply that by all of the “Marias,” over the course of several years, the savings can build up.
BrightPlan: A Must Have for Achieving a Better Workplace in 2024
So how do you get there? How do you flip those trustbreaker moments, turning them into trustmaker opportunities to build trust—especially since most conscientious, career-minded employees often conceal the stress they're under? How do you foster a culture of financial wellness to achieve both an overall culture of well-being and your organization’s business objectives?
What if your employees had a solution they could use to address financial challenges? An app that would query employees about their personal situations—and make helpful suggestions. And a follow-up service with a Certified Financial PlannerTM, who could help coach your employees about how best to use the benefits you offer to achieve better wellness in every area of their lives.
BrightPlan offers just such a financial wellness service. We not only help employees make use of the benefits you already offer, we streamline benefits processes and give you the anonymized data and metrics you need to understand how employees are using (or sometimes, not using) your benefits plans. This, in turn, helps you monitor your progress toward becoming a great place to work.
The journey to becoming a great place to work isn’t rocket science, but it does require a deeper understanding of your employees, their financial goals and stresses, and how financial well-being—or the lack of it—impacts your workplace. So if you’ve decided this is the year you’re going to have a measurable impact both on employee wellness and the metrics that are most important to your business, arm yourself with the tools and the knowledge you need to achieve it.