Boosting financial wellness not complicated or pricey
Researchers found that employees’ probability of being able to save rises by 2 percent for every extra dollar earned up to $20 per hour.
Even for workers on the lower end of the pay scale, employers can take steps to improve their financial wellness that are neither complex nor costly.
So says a new study from Commonwealth, “Rise with the Raise: The Promise of Straightforward Employer Benefits for Building Lower-Wage Employee Security.”
The study looks at the effects on workers making under $60,000 per year of such methods as savings accounts, splitting direct-deposit paychecks between checking and savings accounts, automatic bill-paying and access to low-interest loans.
One very simple tactic that 74 percent of employee respondents said would cut their stress levels and give them more confidence about their financial situation is for employers to offer savings options at the time they give employees raises.
And it’s pretty obvious that something should be done, since 65 percent of low-wage employees said they’re struggling or just getting by, and 43 percent of respondents said they have less than $400 set aside.
Saving is a struggle for many, with 45 percent saying they did not save regularly and nearly 77 percent saying they didn’t save more because they couldn’t afford to.
In addition, although 55 percent said they saved something every month, only 24 percent saved a fixed amount; the other 31 percent saved whatever was left at the end of the month.
Researchers found, incidentally, that employees’ probability of being able to save rises by 2 percent for every additional dollar earned up to $20 per hour.
A whopping 80 percent of respondents are in debt, with 67 percent saying paying off that debt was their top priority. More than 50 percent were in hock for at least $10,000 over and above any mortgage they might have.
Most common type of debt? Credit cards, with 55 percent of respondents owning up to carrying balances.
Employers might want to take heed of other findings: 62 percent of respondents said they’d be encouraged to work harder at their jobs by employer-offered financial benefits at the time of a raise, 62 percent said they’d be more productive and 76 percent said they’d be more likely to stay with the company.
READ MORE:
10 findings on employee financial wellness