When Employees Save Money, Companies Win

When Employees Save Money, Companies Win

Stress and anxiety create all kinds of problems for productivity, and one of the top causes for these feelings are financial troubles. That’s why one of the top business trends of the last few months has been finding ways to help employees build their savings and establishing a little financial breathing room. Whether it’s for retirement or for emergency planning, companies have been stepping up to support and educate their workers about how to save money.

The interesting thing about this trend is that employees are not the only ones benefitting. Companies have a lot to gain when their workers have greater financial stability. For example, talent attraction, retention rates, and individual performance metrics tend to improve when employees are able to achieve greater savings rates, according to Forbes and the Society of Human Resource Management (SHRM).

With such positive outcomes for businesses, let’s take a dive into several of the strategies that companies can start using today to help their employees start saving.

72% of surveyed workers said they would be attracted to another company that cares more about financial well-being. (Source: PwC).

Inform, Inform, Inform

In looking at all the generations of people across a company’s workforce, it’s a safe bet that widely differing viewpoints exist when it comes to saving money. Younger workers, for example, may not fully understand the value of a long-term savings strategy. Similarly, older workers may not have a solid plan as to how they will manage their money throughout retirement.

That’s why experts recommend that companies provide financial literacy learning opportunities to their employees. Merrillville-based Centier Bank is one example of a company that provides this type of employee education. They

“We host an annual financial wellness fair for our associates. Associates can learn from the industry experts about retiring strong, investing, budgeting tools that can be used to help strengthen financial stability, and community resources that provide resources to save money,” said Michelle Steuer, senior human resources business partner at Centier Bank. “Associates can also have one-on-one discussions with the industry experts.”

“We also stress the importance of retirement,” Steuer said. “Through our benefits program, associates can speak with retirement professionals to help set goals and strategies for how to meet them. Our associates can also speak with an experienced legal expert on risk planning and will preparation. We provide a detailed retirement planning guide so that our associates can be prepared for the next chapter of their life.”

 

Have an Outside Partner

To increase adoption rates and get more of your employees to sign on to a savings program of any type, it is recommended to use a third-party provider or partnering institution. People are often very private with their finances and may not wish to discuss their savings, or lack thereof, with a member of their own company. Therefore, putting a little distance between these relationships and personal money matters may help more people feel comfortable with their saving strategy.

Additionally, providing employees with personalized guidance based on their unique circumstances can be a true financial game-changer. Consider incorporating one-to-one level coaching opportunities into your benefits package. This will help people address their specific needs and also make employees feel like their company has their best interests at heart. That’s incredibly valuable for morale and job satisfaction.

 

Support Students

Did you know that 62% of the class of 2019 graduated with student debt, and the average amount owed is between $25,000 and $50,000? That’s according to data from the Federal Reserve and Zippia.

When a person is saddled by this amount of debt, it doesn’t leave much room for things like saving or investing. Supporting these individuals with student loan assistance programs can be a great way to get them into a better financial position. Plus, it can help your company attract new talent and significantly improve things like loyalty and longevity among the employees that receive this kind of support.

 

Emergency Planning

A surprising number of American workers would have a lot of trouble dealing with an unexpected emergency. One frequently-mentioned figure from the Federal Reserve says that almost 40% of adults would not be able to cover a $400 emergency with cash. That’s pretty stress-inducing for many employees, which is why helping them establish a rainy-day fund can be an asset for companies. Sometimes this is referred to as a financial wellness benefit.

Typically, these are set up as after-tax contributions direct to a savings account for emergencies. When the process is automated as such, it’s considered easier to maintain in the long term. Plus, this tends to create reductions in the amount of loans employees would otherwise need to cover these emergencies, so they take on less debt.

Steuer explained that Centier Bank has its own model for these kinds of situations. “We have a special benefit at Centier, our internal nonprofit organization called C.A.R.E., which supports our associates financially when they are going through a tough financial time in their lives. Included in this benefit is PTO time, which is free, paid time off given to our associates when they need pay coming in, but have to be out for an unexpected circumstance in their lives.”

 

In the Bank

Ideas and strategies that help employees save money will go a long way toward helping them feel more secure and supported by their companies. This, in turn, can likely produce a measurable impact on business performance and bottom lines. The rationale is simple, greater financial security reduces stress, distractions, and anxiety. Keeping those elements out of the workplace will always be a great investment for any firm.

Category Features, Finance