October is here, which means a terrifying time of year is approaching. No, not Halloween: open enrollment. Open enrollment can be a great opportunity for updating and enhancing benefits, but often becomes a nerve-wracking and frustrating time for HR professionals and employees alike. Plus, 2020 has only made the benefits and open enrollment process trickier for all involved.
At this point, your benefits package is likely set—your insurance plan has been chosen, you’ve selected the best HSA, FSA, and 401(k) options, and you’re preparing to educate your employees about any new options or changes to their current selections. However, there is a new topic on everyone’s mind when it comes to benefits in 2021: financial wellness.
COVID-19 has greatly affected the finances of many Americans, with 71% of people saying the pandemic has caused a moderate-to-high impact on their financial situation. This has prompted employers to take a hard look at how they’re assisting their workers. Traditional benefits, such as HSAs and 401(k)s, that have long been the core of financial wellness offerings, are no longer enough because they aren’t fully inclusive—especially for the 25% of Americans who are unbanked or underbanked.
Prioritizing Financial Wellness
These statistics are precisely why employers across the country are now expanding their financial wellness programs. But what exactly does an effective financial wellness program look like? Right now, your program likely contains some sort of health savings option or 401(k) option. These are great benefits—but they require a lot of long term planning and anticipation. Amid a pandemic, many employees are just trying to cover their short-term needs and can’t even begin to think about taking advantage of the traditional long-term benefits.
As a result, a large gap is created between traditional banking services and traditional financial benefits, where workers living paycheck to paycheck (a shocking 78% of the population) do not have the funds to address basic expenses and emergencies, let alone set aside money to save. By providing a financial wellness program, you can help your employees bridge that gap and get on the path to financial stability and being able to take advantage of the long-term benefits you offer.
Every financial wellness package can look different. To help you get started, we’ve outlined a few common financial wellness tools you may want to consider when building one:
Earned Wage Access
For many employees, an unexpected emergency or payment can completely break their bank and begin a cycle of debt. With an Earned Wage Access (EWA) tool, this can be combated. By providing your employees an EWA tool, they can access funds that they’ve already earned when they’re in a jam. This prevents your employees from overdraft fees and predatory payday loans that continue the cycle of debt. Plus, many EWA tools are free and don’t require any payroll changes.
A large issue with many people is simply that they don’t know how to budget and save. This is something that isn’t often taught: we just assume everyone will learn how to properly manage their money on their own. Instead, provide your employees with access to tools that help them budget and learn to properly manage their money. A savings education tool can help your employees improve their financial situation and feel more secure. This translates into happier, more productive workers.
Traditional banks are riddled with minimum balances, overdraft fees, maintenance fees, and can just ultimately be intimidating. By partnering with a financial technology company or challenger bank, you can provide your employees with banking benefits without the fees. For example, with Branch, your employees can get a free checking account, including a debit card, ATM access, and direct deposit, when they sign up through your free employer account.
You may be stressed and worried you missed out on offering financial wellness programs to your employees in time. Luckily, adding financial wellness to your benefits package is quick, easy, and can come at no cost. Check out the quick video below to learn more about how we can help add financial wellness to your benefits package, at no cost.