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Supporting employees for a more financially resilient 2022

Employee Engagement |Inclusion and Diversity|Retirement|Talent|Total Rewards|Wellbeing
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By Ray Baumruk and Jessica Ruggles | January 12, 2022

Workers who struggle financially are likelier to report anxiety or depression as well as lost work time. It makes sense for employers to want to address financial stress.

Among the employed, work ranked as the top source of stress from 2019 through 2021, with money coming in at second place (61%). As work often is a critical source of income and benefits, it’s logical that the workforce relies heavily on employers as a crucial source of safety nets, responsible for compensation, rewards and benefits.

Financial stress can impact mental health conditions and employee engagement. We found that workers who struggle financially are likelier to report suffering from anxiety or depression and lose 44% more work time to absences than peers without financial worries. It makes sense for employers to want to address the financial stress of their employees.

Most recently, holidays, COVID-19 booster shots, childcare schedules, year-end goals and looming deadlines were converging as employees were anticipating the new year. And it seems individuals decided to cope with these pressures through spending, as nearly 1 in 3 Americans were expecting to take on holiday shopping debt. This trend is not surprising, as our research revealed the powerful interdependencies between different aspects of wellbeing, including a strong linkage between addictive behaviors and overspending. In fact, the financially struggling group from our 2020 Global Benefits Attitudes Survey was the most likely (nearly 80%) to have major spending plans for the future.

Many American households spent less discretionary money in the first months of the pandemic. As a result, credit card debt improved, as the total number of open credit cards fell 7% from January 2020 to March 2021.

Yet, with increased availability of vaccinations, the low-interest rate environment, property and share markets rising, and families and friends longing to re-unite and make up for the “missed” 2020 holidays, the spending trend and consumer debt is ticking back up. For example, new credit card issuances have increased 83% in the past year, and 42% of U.S. adults with credit card debt have increased those balances since the start of the pandemic in March 2020.

The urge to overspend during the recent holiday season connects to the common human-behavior challenges of impulse control and mental accounting, leaving many consumers to enter the new year with a spending hangover as their credit card bills come in. Employers are well-positioned to improve employee wellbeing to address stress through education, solution design and behavioral economics. They also can help employees with diverse needs to become more financially resilient this year.

Following are four ways for employers to understand employees’ needs and provide relevant resources to support them.

  1. 01

    Know what matters to your employees

    Connect with your employees through continuous listening efforts. Listening strategies, like surveys and virtual focus groups, provide critical insights into priorities, frustrations, preferences and core tenets of what people value and the diverse challenges they face.

    Consider, for example, a Fortune 500 chemical-company client thoughtfully measured workforce financial wellbeing with an inclusion and diversity lens. Using virtual focus groups as well as data analytics and available benchmarks, the organization identified challenges faced by segments with higher prevalence of financial insecurity. The organization also had a better understanding of barriers and priorities across diverse populations.

  2. 02

    Meet employees where they are

    The most well-formulated benefits are ineffective unless you can connect with employees, segment populations as needed, and leverage technology to support financial moments that matter. Employers have an opportunity to drive engagement with personalized communication – enabled through technology – to encourage employees to stay on their path. By using frequent nudges toward healthy habits to address diverse workforce attitudes and experiences, employers can set the workforce up for success now as well as throughout the year.

  3. 03

    Make it easy to do the right thing

    Along with understanding diverse financial wellbeing and communication needs and priorities, easy access to resources is key. Take, for example, what we learned in our U.S. Global Benefits Attitudes Survey: Employees are concerned about their future financial state. As such, their willingness to contribute to retirement benefits is growing and the desire for long-term financial security is high across all age groups.

    While not all workers have access to workplace retirement plans, for those who do it is likely the main savings vehicle – and employer-led education is their main source of financial education. Employers can address common barriers by providing easy access and frequent education about tax savings vehicles.

    Also, some benefits may be forgotten toward year-end, so it’s helpful to remind employees how to take advantage of remaining funds in their Health Savings Account (HSA) or Flexible Spending Account (FSA). Another Willis Towers Watson client, a global manufacturer, was struggling with low engagement, broad education and bolt-on point solutions. By taking a strategic approach to address human behavior challenges through automated features and vendor coordination, the organization was able to improve its overall employee experience and increase retirement readiness scores.

  4. 04

    Align employee experiences with organization purpose, culture, vision and values

    The spotlight on wellbeing strategies demonstrates the need to address barriers, reduce behavioral triggers and enable meaningful outcomes for employees. Companies are increasingly looking to reimagine wellbeing as a key part of their overarching human capital and talent strategy in the next three to five years, according to Willis Towers Watson’s 2022 Global Priorities for Employee Benefits Survey.

Employers have an opportunity to amplify wellbeing as a strategy to prepare for future workforce population shifts, ensuring equity across all initiatives and aligning resources to support that strategy. Consider conducting an inventory and gap analysis, roadmap and scorecard, a wellbeing solution diagnostic or vendor assessment to ensure your offerings align with both individual and organizational priorities. All of this will help you differentiate your overall employee experience – and attract and retain workers.

The start of a new year is an obvious opportunity to consider rebalancing your employee experience offering to enhance a culture of wellbeing – including financial wellbeing. Deploy tactics to understand, listen to, communicate with and engage employees in the moments that matter in order to improve your workforce’s financial resilience as well as your organization’s human capital needs through 2022 and beyond.

Authors

Senior Director, Employee Experience

Director, Employee Experience

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