Conquer the ‘Great Resignation’ with these 4 tips

As opposed to focusing strictly on traditional benefits, employers should look at these four areas.

The pandemic has shown many people how volatile the economy can be and how fragile their finances are. Financial wellness has become increasingly important, and many employees want solutions and support from their employer. (Credit: Monkey Business Images/Shutterstock.com)

Headlines about the “Great Resignation” and unemployment rates are in the news almost every day.  The battle for top talent is fierce, and as the power dynamic between the employer and employee continues to shift, more and more employees will need to reevaluate how they attract and retain top talent.

For years, employers figured that competitive compensation and traditional employee benefits like medical, dental, vision and retirement benefits would be enough to keep their businesses staffed and productive, but current employment trends prove that is no longer the case.

Employers spend a lot of time, money and resources putting together and offering benefits packages to their employees. Oftentimes, they do so to attract and retain top talent, create a workforce that is happier, healthier, more engaged and productive, and boost morale and employee loyalty. With a tightening labor market and employers competing for top talent, offering a benefits package that truly meets the needs of employees is more critical than ever.  Financial wellness programs are becoming an important part of comprehensive benefits packages today.

Many Americans carry significant financial baggage like debt, lack of savings and assets, and insufficient education on important topics such as budgeting. The volatile economy during the pandemic has heightened financial stress for much of the workforce, causing increased demand for financial wellness. There is an opportunity now for employers to set themselves apart by offering to help employees meet their basic financial needs and teach them how to best allocate their compensation.

Employers need to step away from solely prioritizing traditional benefits, and rather think about how they can offer a holistic benefit solution that helps employees lessen their financial stress and improve their financial education. When considering possible benefits to provide, employers should focus on four areas:

Existing benefits education

The first step to improving your benefit offerings is to make sure your employees understand the benefits that are currently available to them. For example, employees may be participating in the retirement plan and contributing regularly, but there’s a good chance that they don’t understand how those contributions will affect their retirement income. We find that many retirement plan participants overestimate the value of their retirement savings, and as a result don’t save enough or retire too soon.

Helping your plan participants build their knowledge base in this area is more important than ever as the new investment advice rule takes effect, which adds lifetime income projections to everyone’s 401(k) statements. Many participants won’t understand this piece of information and will need help figuring out how to ensure their contributions result in successful retirement.

Education is key to improving outcomes and driving retirement readiness.  One of our clients reported that after they implemented a financial wellness program, 67% of their employees expressed a better understanding of the percentage they need to be saving for retirement.

The need for education doesn’t just apply to retirement plans, as the average employee also doesn’t fully understand other important benefits like how an HSA account works or how it’s different from an FSA. Or perhaps they need help understanding their medical insurance. The benefits you offer aren’t likely being maximized if employees aren’t properly educated about them and receiving guidance on how to best take advantage of them.

Financial wellness

The pandemic has shown many people how volatile the economy can be and how fragile their finances are. Financial wellness has become increasingly important, and many employees want solutions and support from their employer. In its Employee Happiness Index 2019, HR tech company Benify revealed survey data from more than 19,000 participants representing 61 organizations.

The study showed that for every generation except baby boomers, health and wellness ranked in the top two among benefits considered to be the most important. Furthermore, it ranked in the top two for every generation, including baby boomers, among benefits seen as the most appreciated.

According to the 2022 John Hancock “Stress, Finances, and Well-Being” report, 89% of employees think it’s important for employers to offer a financial wellness program, while 66% say financial wellness programs would increase their employer loyalty. Additionally, 56% believe that a financial wellness program would increase their productivity.

So, while it’s the right thing to do for your employees, it also makes good business sense.  Employers who embrace holistic and comprehensive financial wellness solutions typically see improvements in retention and turnover, the ability to attract top talent, boost in employee morale and loyalty, lower healthcare costs, and increases in engagement and productivity. According to a PricewaterhouseCoopers Employee Financial Wellness Survey, stressed employees are nearly five times more likely to say their finances have been a distraction at work. And 69% of employees are more likely to be attracted to another company that cares more about employee financial well-being.

It’s important to remember though, that digital tools and financial education alone are often not comprehensive enough. Studies have shown that employees want and need in-person, face-to-face and/or live education. A John Hancock Financial Stress Survey found that meeting face-to-face with a financial professional is still the preferred way to receive advice. If you’re going to offer financial wellness programs, it’s best to ensure they actually fit the needs and wants of your employees.

Lifestyle benefits

It has become pretty standard for companies to offer 401(k)s, along with medical, vision and dental plans, but companies have to offer more to attract and retain top talent. Other benefits, such as childcare, emergency savings help, subsidized pet insurance, student loan debt counseling, and financial wellness programs can be big differentiators.  These lifestyle benefits are more personalized and can be very impactful because they actually meet the needs of employees today!

One option is to offer them as voluntary benefits. This way, employees can choose to participate in the benefits that pertain to their lives, while opting out of those that don’t. Offering such benefits can show your dedication to the well-being of your employees, both in and out of the workplace.

Understand your employees’ needs

Employees want to feel supported and cared for by their employer. But there’s often a gap between what employers think their employees’ needs and wants are and what they actually are. In order to fully understand your employees’ needs, it’s a good idea to start with an employee survey. And because finances are personal and hard to talk about its best that those surveys be anonymous. The results can be surprising but can help employers ultimately make better decisions about their employees and their benefits spend, And showing that you are willing to meet employees where they are can help boost their loyalty to the company and make them less likely to leave for another one perceived to be better or more supportive.

Amid the Great Resignation, an undeniable power shift is occurring from employers to employees. Across industries, intense competition for quality talent has become a sign of the times. To stand out, companies need to offer holistic benefit solutions that prioritize comprehensive employee wellness. Financial wellness programs are increasingly becoming an important part of comprehensive benefits packages today and can provide benefits to both your employees and your organization’s bottom line.

Christian Mango, AIFA, is the president of Financial Fitness for Life, a leading financial wellness solution providing in-person employee financial coaching coupled with best-in-class technology.

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