Rising concerns over financial wellness plans like retirement programs are trickling down to younger generations of workers who want to plan ahead. Already, many companies are improving their retirement plan options for their employees, making them more streamlined and easy to use, to help provide for better employee financial wellness.
When you’re hustling to make ends meet or constantly thinking about setting aside savings for yourself, you’re stressed about the one thing that most people are stressed about: money. Especially for millennials, who are seeing their social security safety blanket fraying, the lack of a retirement plan can cause significant stress. From a management perspective, this stress can be problematic for the entire office. Distracted and worried workers won’t be as effective. Many organizations are making it easier for employees to save for the future and pay off their debts. They’re creating happier workplaces full of engaged employees as a result.
The Power of Peace of Mind
You don’t need me to tell you that employees who are less stressed work more effectively. Lower stress levels in general also lower instances of incivility in the workplace, which has its own host of side effects.
More than the benefits of having happy employees, however, management and company leadership showing that they care for their employees by giving them the tools they need to work their way out of debt or to plan for the future pays dividends. Employee financial wellness, bolstered by leadership that shows it’s willing to help, creates a culture of caring. When employees believe in the company they work for and understand what the company does for them in return for their great work, they’ll more reliably turn in great work.
More Than Compensation
Workers are looking for more than solid healthcare benefits and a good salary. They want flexibility, financial security beyond their salaries, and support in the workplace. They want to collaborate with management and be a part of a larger vision. An attention to employee financial wellness by management is a great entry point for employees into the company’s vision.
According to a recent report by Willis Towers Watson, 401k plans are becoming more commonplace and automatic, with employees opting into handy and streamlined retirement savings options. This shows that more employees than ever not only want better pay, they want the ability to save it and use it.
Defined Contributions Enhancements
Employers have created better opportunities for employee financial wellness because of the mounting concerns over workers not saving enough. Defined Contributions (DC) plans are now the main retirement savings product workers in the United States are using. Employers are providing workers with automatic opt-in options, streamlined investment options, and better fee transparency, which is boosting employee involvement and contributions.
Not only will these additional DC options and features make it easier for employees to save for retirement and plan for the future, they’ll help overall employee financial health and wellness, leading to a happier, more secure, more stable, and more engaged workforce. Another opportunity for employers to further improve their retirement plans for employees is to improve their measurement of who is using them and why. According to the Willis Towers Watson survey, only a little over a third of the employers asked measure the overall retirement readiness of their participants annually, while 88% of them only measure basic statistics, such as participation rate in their programs. There is a huge opportunity to not only improve the plans themselves, but to improve the data companies have on who uses their plans and how effective they are.