Posted December 13, 2018
Well-being programs at many businesses fail to address employees’ real needs. The programs often feature health incentives, fitness discounts, educational information, and rewards. While employees appreciate these perks, research shows they want help with financial well-being. They especially desire benefits that help them pay off student loans or put money away for future educational needs. Here’s why well-being is more than PTO, perks, and incentives.
Resolve employees’ financial worries
It’s no secret that financial worries weigh heavy on employees’ minds. Researchers report that employees spend several hours every day – often during the work day – sorting through financial problems.
For many employees, these worries revolve around repayment of student loan debts or helping their kids pay for college. Many younger employees owe over $37,172 in student loans. Their monthly loan payment can equal a house mortgage or car payment.
The student loan debt crisis is not just a “younger employee” problem. Studies show that 6.8 million student loan borrowers between ages 40 and 49 owe on average $33,765 each. Many have incurred these loans to pursue graduate degrees, train for another career, or to help their children with college expenses.
Many businesses now offer a BenefitEd student loan repayment benefit to ease these financial stresses.
With BenefitEd, employers can easily set up a monthly, quarterly or annual contribution payment toward employees’ student loans. Employers may provide BenefitEd for specific positions, and others offer it to employees meeting certain criteria.
A twist in benefit choices
Some employers have budget limitations and cannot offer additional benefits. Or, they are concerned about keeping benefits equitable for all employees. Employee Choice resolves these concerns.
Each year, employees leave about $24 billion in 401(k) employer-matched funds on the table. With the Employee Choice program, employees can make full use of these funds to pay off student loan debts, save for retirement, or both. Here’s how it works:
- Employees with student loans can apply employer matching funds toward paying off these debts. Or, they can split the match by paying some toward their loan debt and put the rest into a retirement savings plan.
- Other employees without student loans can designate employer matching funds to retirement plans.
Employee Choice ends up being an equitable benefit solution for all employees.
College savings plan
Employees also appreciate access to college savings programs, such as 529 plans. As college education costs continue to rise, parents and grandparents are stepping in to help out. BenefitEd can help employers designate funds to 529 college savings plans so employees can set aside money to help cover college tuition for their kids or grandkids.
Business growth and success
In a recent survey, about 66 percent of employers indicated that well-being programs play a critical role in their employment brand and culture. They’re starting to recognize that focusing on financial well-being, especially helping employees repay student loans and save for retirement and college expenses, is a tangible way they can make a difference in employees’ lives.
Here are five benefits of offering BenefitEd and Employee Choice:
- Reduced stressed – When employees resolve their financial worries, they are more relaxed and can focus on their work and relationships with family and friends.
- Lower medical costs – Studies show that employees concerned by finances are twice as likely to have health problems, as compared to those who report having few financial worries. Once financial worries are resolved, employees take fewer sick days and have lower medical costs. They are happier, healthier, and more content.
- Improved engagement and productivity – Workers are more focused on their job responsibilities because they don’t have to spend hours during the day worrying about how to pay bills and save for future expenses.
- Increased competitive edge – 86 percent of employees say they would commit to a company for five years if they received help repaying student loans.
- Decreased turnover – Employees appreciate their employer’s commitment to addressing worries about student loan debts, as well as other financial concerns. Workers tend to stay on the job, which means employers have less turnover and business disruptions.
BenefitEd and Employee Choice programs bring help and hope to employees. They fill in the gaps of employer-sponsored benefits programs by addressing employees’ real financial needs.