As the United States suffers through the COVID-19 pandemic, more and more data shows that employees face financial stress. A recent John Hancock survey revealed 67 percent reported financial stress in 2020, up from 44 percent before the pandemic.
Since financial stress impacts employees personally and how they do their jobs, it’s becoming more critical than ever for employers to step in and help workers build financial stability. Developing effective employee financial wellness programs is especially important in these financially uncertain times.
Here are three ways companies can help their employees manage their finances.
- Earned Wage Access
Companies across the country are asking their employees what’s important to them. They learn that employees need access to cash much more quickly than is provided during the traditional pay cycle.
Enter earned wage access (EWA). EWA is a financial benefit that lets employees receive at least part of their paycheck before traditional payday. Employees request money they’ve already made and receive payment. It’s a valuable tool to help workers build financial stability.
EWA, or on-demand pay, helps employees manage their short-term finances and can help with emergency costs like car problems, doctor bills, or any other unplanned expenses that occur. Employees who use EWA pay a small fee. This financial benefit is more helpful than credit cards, loans, or writing checks with little or no funds in their account.
2. Bring in The “Right” Financial Experts
Since not all employees earn the same wage, uniform financial advice is not relevant to all your employees. It helps if you can bring in experts that can speak to the specific challenges they are facing in building financial stability.
For example, some may be living paycheck to paycheck and having problems with paying down debt. Others could be struggling to save for a first house. While some financial advice like saving for emergencies works for everyone, getting there will be a challenge for some. Providing relevant guidance to everyone will be appreciated. Offering advice and resources for employees in all walks of life will help to develop a well-rounded employee financial wellness program.
3. Educate Employees on Credit
Not all credit is bad, of course. But often, employees might not understand how the credit system works. Whether it’s a car loan, home loan, or some other type of loan, employees need to know all their options for the situations they might need it. By setting up an expert to walk them through the process, you’ll be helping them improve their financial stability along with becoming a better employee.
There’s no doubt the stresses of 2020 are impacting employees across the country. Now is an excellent time to think of ways to help them cope. EWA is a financial benefit that can help many of them with their short-term financial issues. Then, helping them understand their challenges and what they can do about it will pay off for everyone in the long run.