Financial Wellness as Recruiting Tool
If healthcare coverage is no longer dependent on one's job status or place of work -- thanks to the Affordable Care Act -- how can businesses establish a competitive edge in the benefits arena?
By David Kilby
As the deadline quickly approaches for individuals to sign up for healthcare coverage under the Affordable Care Act, employers and HR departments can't help but consider the ramifications for recruiting efforts and talent retention.
Retirement packages and robust health-insurance plans have long been considered the key to attracting the best and brightest, but the game is changing now that the Affordable Care Act has put coverage within more Americans reach without having to go through an employer.
This reform is causing HR executives to consider alternatives to include as part of a company's benefits package, and financial-wellness programs are quickly gaining visibility as a viable option.
When it comes to providers, there are various choices to explore, including those that offer a wide array of educational tools, both in print and online, and others give employees financial assistance in the form of small-dollar loans when unexpected emergency situations arise. For employers seeking a comprehensive solution to include in a well-rounded benefits package, there are providers that offer a combination of both educational and lending services.
Before considering different providers, it behooves the HR leader to first understand what an employee wants most in a financial-wellness program. At a time when valuable benefits that appeal to new hires are few and far between, it's critical for employers to understand what new incentives are most effective and advantageous in the minds of talented staff members.
According to a recent internal survey of employees within companies across a wide range of industries, there are distinct features that are considered of highest value.
When offered a solution that promotes financial well-being and provides loans as necessary, employees considered ease of use, a prompt loan-approval process and quick turnaround of funds, and straightforward online tools to be the most-appreciated aspects.
Employees who had been introduced to the company's online platform, which provides tools and information to improve users' financial literacy, ranked "ease of use" as the most-valued aspect of the program. After all, what good are budgeting calculators and financial-planning tools if you can't figure out how to effectively put them to use?
A financial-wellness-program provider should provide employees with the following easy-to-use applications:
- Assessment of current financial situation
- Budgeting and daily cash-flow calculators
- Financial terms dictionary
- Retirement planning
- Information on wills, insurance, and estate planning
- Identity theft prevention
- Credit and debt monitoring
- Tax tips
Although an employee might have a great educational background, in-depth experience in the field, an outgoing personality and all the attributes an employer is seeking, they might not have a stellar credit history. This can be the result of a multitude of scenarios. Perhaps this person relied on credit cards to pay the bills in college, but then landed job that didn't provide the means necessary to pay back the debt. Also, it's not uncommon for single parents who have recently gone through a divorce to depend on payday loans to make ends meet, which carry astronomical interest rates and can lead to a harmful cycle of debt.
Although these employees may be the most capable and reliable among any given workforce, the reality is that many of them are living paycheck to paycheck. When faced with an unexpected financial catastrophe, such as a broken car or a last-minute need for daily childcare, a bank loan either isn't an option or doesn't provide critical funds fast enough.
If an employer-provided loan program is available that deducts the loan payments from each employee's paycheck over a period of time, it's important that credit history isn't a hindrance and that loans are approved and available within a short period of time. Some providers can turn a loan around within 24 hours.
In today's digitized world, many employees find an online program to be the most desirable. Even those participating in the survey who weren't in need of loans rated the ease of finding educational applications on a provider's website to be important. Straightforward access to all aspects of a financial-wellness program on a single integrated platform is a key value.
In addition, if a provider's website is confusing or difficult to navigate, it's probably going to quickly become frustrating for an employer's staff, causing the majority of employees to dismiss it from the start.
The purpose of a financial-wellness program is to simplify the lives of employees. If they are given an outlet for financial stress, they're naturally going to be much more focused during the workday and able to complete tasks efficiently.
On the other hand, if that so-called "solution" is difficult to navigate online, or requires a stack of papers and brochures to read through, the process is going to be viewed as an added stress, not a relief.
Although those charged with bringing in talent are losing some of the clout that was once associated with offering employees an all-inclusive, high-quality health-insurance plan, there are other options that can distinguish your company from competitors.
For many employers, the concepts of financial well-being or pre-packaged employee-loan programs are novel, but providers are making their presence known. If you're considering this as an added component for your benefits package, make sure you're ready to ask the right questions of each provider.
After all, what good does a benefit actually provide if neither existing nor new employees want it, or they find it difficult to take advantage of, or they end up wishing they had a different option?
David Kilby is president of Virginia Beach, Va.-based FinFit, a provider of financial assistance and educational support to employers and their workers.