It's the most wonderful (and stressful) time of the year. How can you help?

As we close out what’s been a challenging year, HR professionals have an opportunity to strengthen employees’ trust and loyalty. With the ongoing pandemic, people may be dealing with more unforeseen expenses than usual, especially if their partner lost a job, or if they had health issues, a family member that needed caring for, or work hours that were cut. A survey from J.D. Power showed that 38% say their household income has declined by at least 25% since the pandemic began.

Despite this, people are still looking forward to the holidays and ways to celebrate, give gifts, and spread joy like they would any year. However, a survey from Credit Karma reveals that more than half (54%) of Americans feel more financially stressed about the holidays now than they did last year, and 30% plan on going into debt over the holidays. This should alarm HR professionals, as it creates the potential for employees who are stressed, distracted, and enter cycles of debt that affect their health and well-being as well as their job performance.

Lisa Ball, HR leader at Pack Health, said it best: ““For me as an HR professional, and it’s so important that we provide our employees with all the tools that they need to be successful. Not only as our employees, but also just making sure that we’re providing them with all the tools we can to make their lives easier and better.”

Why should HR leaders care about employees’ financial wellness?

In a typical year, we see financial stress affect an employee’s ability to perform at full capacity. In 2020, that impact is exponentially larger. New benefits that address financial wellness like earned wage access can help reduce employee stress, and raise morale, satisfaction, and retention. In fact, more than two-thirds (67%) of HR executives surveyed by Visa this year said their organizations would be very likely to explore new benefits if those benefits would reduce workers’ financial stress during COVID-19.

Here are three reasons to focus on employee financial wellness before the holidays:

1. Prevent distractions. The holidays can be a tempting time for workers, especially those who are paid hourly, or supplement their income with a second or third job. By addressing unmet financial wellness needs, HR leaders can prevent distraction while improving employee loyalty and retention.

2. Manage holiday spending. Two-thirds (66%) of Americans think they will spend the same amount of money or more on holiday gifts this year compared to last year, and 44% of those spenders said it’s because they are sending gifts to people they won’t be able to see in person this holiday season.

HR can help employees manage their holiday spending, make monthly payments easier, and require fewer loans for holiday purchases by providing a financial solution like earned wage access that gives them the ability to withdraw small amounts when needed. With debit card integrations, HR can put this earned money right in employees’ pockets, and give them control over their financial situation, while putting caps on the amount they can withdraw if needed, to ensure there are still funds available on payday.

3. Enable employees to give back. This is a time of year people want to give back – to each other and their communities. Employees may want to maintain, or even increase their charitable giving this year, to make up for fewer opportunities to volunteer in person. Help employees do that by helping alleviate financial pressures.

Implementing new financial wellness tools like earned wage access can be a simple addition to a benefits package – but it’s one that will make a big difference in employees’ lives, especially during the holiday season. Look for a solution that integrates with your existing payroll vendor, and can be implemented and onboarded quickly. An earned wage access solution can make a significant impact on your employee satisfaction during an especially stressful time of year by giving them the flexibility and control to optimize their financial situation.

To quote Lisa again: “It gives me peace of mind knowing that all of our employees have that opportunity right there on their phone, in the app, to be able to access their money. I would hate to think of anybody silently struggling at home, trying to make ends meet. It makes me sad to imagine that, but earned wage access eliminates that concern. You can never make an assumption based on somebody’s income about how they’re doing financially behind closed doors.”

Whether an employee is hourly or salaried, they are likely dealing with more financial responsibilities than in previous years. Earned wage access is one key benefit that HR leaders can implement quickly as an end-of-year financial wellness tool. By addressing employees’ financial needs during the holiday season, companies can set themselves up for a successful 2021 with employees who are happy, focused, and satisfied.

Matt Pierce is founder and CEO of Immediate, a financial wellness company that enables employers to offer earned wage access and other financial management tools to their employees. Immediate will be donating a portion of revenue to charity this holiday season.