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Welcome to This Week in Benefits, a new biweekly podcast from Mployer Advisor, the company that is changing the way employers search, evaluate, and select insurance advisors online.
In each episode, our team will bring you the latest news and industry updates in the world of employee benefits. We’ll break down top headlines, bring you interviews with top industry insiders, and highlight market trends and stories we’re following.
In case you missed Episode 4, click here to listen and here for the show notes.
Date: June 3, 2022
Episode Title and Number: Season 1, Episode 5
Episode Title: Combatting Employee Stress and Financial Burnout With Voluntary Benefits
In this week's episode, we discuss the link between workforce burnout and financial stress, as well as financial well-being benefits that employers are beginning to offer nationwide.
To listen to the fifth episode of This Week in Benefits, click here.
Additional Recommended Reading
The International Foundation of Employee Benefit Plans
Abbey Dean (00:12): Hi everyone, and welcome to this week's episode of This Week in Benefits, a podcast from the team at Mployer Advisor where we discuss all things employee benefits. Hi. Hello, I'm your host, Abbey Dean, Mployer Advisor's Head of Content, and thank you so much for being here. So today we are going to be discussing a topic that is near and dear to all of us, which is money. Specifically, we're going to be talking about the stress and anxiety that can come from managing personal finances. So there's been quite a few studies and surveys around this topic recently. So what I wanna do in today's episode is provide a brief overview and then we're going to sort of go into some of the ways that employers could combat or consider mitigating financial stress among full-time employees. So let's dive in.
(01:26): So money is a deeply personal and oftentimes not openly discussed topic, which is of course, especially true in the workplace. Similarly, something that the team at Mployer Advisor has reported extensively on is burnout. This is a threat to employee health that we of course have seen grown exponentially since the pandemic began. Now of course, burnout existed prior to the pandemic, but as we all can certainly attest, I imagine it's been exacerbated by existing stressors that were already present in the workplace or at home. So what we've seen since the pandemic began is a lot of employers of all sizes and industries across the nation begin to expand their employee benefits to cover more mental health services, telehealth, and even EAP programs or employee assistance programs, which is great. So what I want to talk about now, which I think is interesting, is that in the past, what we have seen, or at least I have seen, these as two separate issues.
(02:50): Employee burnout and financial anxiety discussed in silos as two separate issues each with their own set of solutions. Now what's interesting is that that appears to be changing and more and more I've seen studies and surveys and news reports come out that have linked mental health and financial health and they're being discussed simultaneously. Now that when I say that out loud, it doesn't sound like incredibly groundbreaking, but there was an excellent piece in Harvard Business Review, which I will link in the show notes as I do with everything. So guys check the show notes for sure. But that piece in Harvard Business Review discusses how burnout and financial stress are inextricably intertwined because burnout creates financial risk.
(03:48): So what does this mean? What does financial stress mean? What does financial anxiety look like and how big of a problem is it actually? Is it even something that companies should begin to offer solutions for in the same way that many have expanded their wellness programs or mental health services in recent years?
(04:14): So for a lot of companies, the answer to that question is yes. And here's part of the reason why. According to a report from the Federal Reserve Bank of New York, Americans added $333 billion of aggregate household debt in Q4 of 2021. Now, that's a sharper increase than at any other time in the last 14 years and brings the national total to 15 trillion dollars. It's like hard to say because just that's such a huge number. It sounds like unreal. Okay, so take that into account, but then consider a 2021 survey from SHRM and Morgan Stanley at work on the financial well-being of Americans found that monetary stress stressors and mental health are linked as of June 2021. For instance, a third of working American surveyed reported that during the pandemic they experienced finance-related anxiety and almost 20% reported experiencing finance-related depression. Those numbers are of course higher for those who are unemployed.
(05:33): Yet even as companies continue to invest in mental health benefits, like again telehealth teletherapy employee assistance programs, fewer until lately have reported making similar investments in financial well-being programs. In fact, that same SHRM and Morgan Stanley report I mentioned a couple moments ago found that only one in four HR professionals surveyed said their organization has added or expanded existing financial well-being benefits to "help employees manage their financial stress since the start of the COVID-19 pandemic." So this is certainly an issue we've seen grow and I think it's something that a lot of us can easily relate to, whether personally ourselves, friends, family members, a lot has changed. But how big of a problem is this nationwide still? Is there enough of a business imperative to expand employee benefits offered? And again, I think what we're seeing and what I've found here is a lot of companies believe that yes, it is a business imperative.
(06:47): A recent article I found in Human Resource Executive, again this will be linked in the show notes, found that over the past year, more than half of full-time employees struggled to cover monthly living expenses. Another 37% lived paycheck to paycheck. And this was a survey that Purchasing Power, which is a voluntary benefits company, conducted with the Harris Poll. Now, the stat that kind of made me, it surprised me, it made me feel like we had to do this podcast episode. The stat is 54% of full-time employees struggled to cover monthly living expenses over the past year. So that's profound. That's one in two people.
(07:43): The other important thing about this report that I think is a very critical piece of context is that financial pressures aren't exclusive to lower-income employees. In fact, the survey found that among households with an income of over a hundred thousand dollars or more, 17% have been unable to cover monthly living expenses in the past year alone. And 25% have lived paycheck to paycheck, barely covering monthly living expenses. Now, if you think about the ongoing COVID-19 pandemic inflation at the high rate it's at, as we've reported in previous episodes, it seems to paint a picture that employees are not only struggling financially, but struggling financially in such a way that it is becoming necessary that employers step in because it could be affecting their work or their ability to perform their job to the best of their ability.
(08:56): So a different survey here found that 34% report that financial stress affects their physical health, which again, physical health and burnout are quite interlinked. What's more, 45% reported that it affects their overall stress at home and 25% report that it affects their job satisfaction. Financial stress affecting work, I think is the key here. 28% of employees said it affects their ability to focus at work, which is up from 24% who reported the same in 2021. So it's not hard to imagine however comfortable or stable your current job situation is or however stable your company is right now. If you're an HR executive or manager listening to this with surges in, well, with the high surge in inflation of course, and new surrounding increased stress, financial stress, burnout, and the latest wave of layoffs that have started since 2022, you kind of begin to understand and see the imperative in considering how best you may be able to help employees through this. Of course, like any other benefit or employee benefit I should say, it depends on your company culture, your region, your industry. This may not apply, but for those who it does, you can really see the context leading up to it, and I think in a way that is incredibly interesting.
(10:51): So Weller in our last episode spoke quite well. I'd highly recommend that episode too. It was one of our longer ones that we are really proud of. But he spoke about how employee benefits can signal a company's values and that need to attract and entertain talent right now is something that we have spoken a lot about on the podcast and also in our recent webinars and blog posts. So what are some of the ways that savvy employers can not only use this as a way to combat financial stress with their current workforce and the threat of burnout, but could also appeal to top talent or signal to people or prospective employees that trying to combat financial stress and burnout and caring about that for your employees is a part of your company culture? And I think there's real opportunity there, especially if you consider the new way that the conversation around financial stress and mental health and burnout are linked.
(12:15): So that I think is where there's some real opportunity Now, what are examples of financial, we're going to call them financial well-being benefits. Where do those start and where do they begin? There's currently a there's of course a very long list, but I'm going to go through some of them now in the sort of categories I believe in which these fall under I'm going to quote his name is David Fairburn. He's an associate partner in Aons Retirement Solutions practice, and he recently told HR Brew that financial well-being benefits tend do fall under what he calls the four Ps: prepare, plan, protect, and preserve. So in his description, "Prepare" benefits cover short-term benefits like budgeting. This means creating an emergency fund or perhaps assisting with student loan payments.
(13:27): The "Plan" benefits then are long-term financial offerings like retirement plans. The next category is "Protect." Protect benefits are about protecting the assets you already have through insurance coverage like life insurance. And then the final stage "Preserve." The preserve benefits are those that endeavor to help make an employee's assets last a lifetime and this is through advocating for products like lifetime income benefit writers and more. So when we start talking about the different types of financial health benefits, I think again, those categories are an excellent way to consider the different types of value they can add. So before I provide some popular examples of what we've seen in terms of financial well-being benefits that are currently offered or are popular, I wanted to read this quote from Anna Mahoney. She's the CEO of Addition Health, which is a relatively new company that offers financial planning services. She says, "You're seeing a lot of responsibility on the individual to make financial decisions, whether it be fully understanding their pay and benefits and budgeting or thinking through the best ways to plan for their future themselves. We're living in a world with a lot of sophisticated tradeoffs, we don't grow up necessarily in a world where we're taught how to work through all of these decisions."
(15:06): And I like this quote because I feel like it's very salient and certainly speaks to how I perceive a lot of members of the workforce feeling about this issue. Again, going back to the very top of the episode where most people don't like talking about money, most people especially don't like thinking about money or talking about money when it comes to their job. So I think her quote kind of captures a lot there. Her company Addition Health also had a few statistics that I'm going to read off cause I think they're compelling.
(15:42): $250 billion each year is the total amount lost to companies due to lack of employee productivity. What's more, 58% of employees are stressed out by their personal finances and 87% of employees want professional help when it comes to their finances. So what are the different ways that employers can offer financial well-being benefits? What can that look like? The first one that I think most of you listening will probably have heard of is called safety net insurance. And I'm not going to go into too much detail about any of these, but I just wanna quickly give an explainer in case that's a new term to anyone. Safety net insurance can include many things, but most commonly includes life and disability insurance. We've seen a lot of talk about this type of insurance specifically because of the pandemic and as it became more valuable because workers were going through difficult times or falling ill themselves.
(16:46): So safety net insurance is one type of financial well-being benefit. Another interesting one is an emergency savings accounts. So these accounts can be set up like any savings account and connected to a debit card, but these funds are deducted from employee paychecks like retirement accounts, but employees can access those funds whenever they need without penalties. So this can help employees save much more in case of an emergency. Another type of financial well-being benefit, which I think especially speaks to that last statistic I read 87% of employees want professional help when it comes to their finances. So this one is quite salient. Financial planning and coaching benefits. So this one could mean a lot of things, obviously depending on the demographic or makeup of your workforce, age industry, et cetera. But basically it's about helping employees understand how much income or retirement savings they'll need in the future, and that can motivate them to prepare and save for retirement.
(17:54): A lot of workers lack the financial literacy resources and tools necessary to find this information. So employers giving a sort of helping hand in this way can be really instructive. And then another example, which also has a lot of subcategories, is when we think about financial reimbursements. So this can come in, a lot of this can come to be in a lot of different ways. Most of you probably have seen or been able to access professional development stipends. Another one we've seen become more popular, well popular in the past, maybe not as much anymore, is commuting assistance.
(18:36): Another one is caregiver or childcare support funds. So for all of the working parents out there, again, this is very relevant to last week's episode that can be a big help too, that can entice employees in your workforce too, if you're trying to get them to come into the office more, if you're trying to manage hybrid work or if you're just trying to show that this is something that matters to your company and aligns with your values. That's an excellent financial benefit to offer. A final one that we have also seen increase quite a bit in the past year or so are tuition reimbursement programs, specifically student loan repayment options is what I've seen grow a lot and we've seen a lot of news of companies extending this as the price of college becomes increasingly high. So this is one I'm going to, there's a bit more research behind, so I'm going to touch on this a little bit.
(19:37): So tuition and reimbursement programs enable companies to cover some, or in a very limited case, I imagine all of the costs of an employee's education as long as the program of study and related expenses fall within the guidelines of that company's specific policy. So tuition reimbursements can be used to fund or partially fund undergraduate or graduate degree programs. These benefits could even cover job-related professional development courses or specific skill-building classes. Again, these are just a sort of short list of benefit solutions we've seen under that umbrella of financial well-being benefits. And again, if you think about each of those that I sort of briefly touched on under what Fairburn called the four Ps of preparing, planning, protecting, and preserving, I think it really shows a lot of value. So that was a whole lot <laugh> of listening to me.
(20:47): What I would love is to hear from all of you listening if your company is currently offering any sort of financial well-being benefits, I would love to hear about it. If you're not at the point where you feel that financial well-being benefits would serve your workforce, do you have other strategies in place to alleviate some of the financial anxieties hitting employees? Or do you think this is even an issue that's relevant to your own workforce? We would love to hear from you, so leave us a note in the comments. You can always reach out to me over LinkedIn, or leave us a voicemail message with specific questions around this topic.
(21:50): Okay, everyone that wraps up today's episode, thank you so much for tuning in. If you have not yet, we would really appreciate you subscribing to the podcast and leaving us a review. Also, don't forget to take a look through our show notes section. Again, as I mentioned above, you can leave us a voicemail if you want to suggest ideas, have follow-up questions, or really just wanna talk about this or any past episode. Thanks for listening in and I will see you next time.
(22:34): Thank you for listening to this week's episode of This Week in Benefits, brought to you by Mployer Advisor. Mployer Advisor is changing the way employers search, evaluate, and select insurance brokers. Our intuitive platform connects employers and employees to get great benefits and insurance plans by providing employers with actionable data to easily evaluate and select the best advisor for your company's specific needs. To learn more about Mployer Advisor and our suite of products, please visit our website at mployeradvisor.com and tune in next time. Thanks.
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