Benefits beyond the basics: What’s needed to retain top-tier talent

Despite talks of a looming recession, workers are in command of one of the hottest labor markets in generations, with ample job openings available and unprecedented voluntary departures—a trend that is not going anywhere for the foreseeable future.

Just look at the facts: job openings far exceed the number of people looking for work by nearly 2-to-1, 4.2 million workers quit their jobs in July alone, and 52% of Gen Z and millennials are considering changing employers this year.

To remain competitive and attract and retain top talent, business leaders are not only deploying off-cycle and larger-than-usual bumps in pay for workers, but providing new perks including free subscriptions to exercise classes, new espresso machines in office kitchens, and unlimited paid time off.

But these band-aid solutions are far from a silver bullet to stemming the tide of resignations. In reality, they fail to address a key issue facing employees: financial wellness.

According to a recent survey, despite the generational shift in labor power, more than 80% of Americans are experiencing financial stress—with worries spanning inadequate savings, credit card and student loan debt, and not having enough money to pay for ongoing expenses like groceries and rent. Strikingly, 61% of Americans are living paycheck-to-paycheck, including 36% of top earners making $250,000 or more.

With economic instability now the status quo, employees are more motivated than ever to take control of their current finances and financial future. When given the opportunity, workers who are offered financial wellness programs by their employer overwhelmingly take advantage of this benefit.

What’s more, nearly six in seven employees believe that their financial well-being impacts their job satisfaction and tenure at a company—with many feeling strongly that their employer has a responsibility to not only provide competitive pay, but also holistic benefits and financial wellness tools.

The irony/? While 95% of employers feel a “sense of responsibility” for their employees’ financial wellness, The Financial Wellness Think Tank estimates that the amount spent to help employees fully understand and utilize their benefits is a mere .12% of benefits budgets on average.

Rhetoric won’t improve the situation—only action can.

Free single-origin coffee and other gimmicks are not the answer. Investing in financial coaching is the best tool at a company’s disposal to see real, tangible results in a competitive job market. Financial coaching not only helps employees maximize their pay and benefits to weather a recession, but can also alleviate financial stress—a huge factor in the current mental health crisis. It also shows that employers are invested in their workers’ future.

Related: A different approach to financial wellness – engaging employees during moments that matter

And, it is not only a win for workers but a net win for a company’s bottom line. Investing in financial wellness services is proven to help businesses increase the number of on-time retirements, lower turnover costs, reduce absenteeism, and improve employee productivity. By reducing the average retirement age, companies can save an estimated $16,667 per employee —a significant price tag.

More than ever, today’s employees know what they want—and they have demonstrated a willingness to quit their jobs to find an employer that exceeds their expectations and truly “walks the walk.” For companies, that means typical fringe benefits like financial wellness programs are no longer a nice-to-have, but a business imperative as job openings and resignations remain the centerpiece of the U.S. labor market narrative.

It is time to think outside the box and consider new, win-win tools that empower workers, inspire positive change, and help companies retain their best and most promising talent.

Greg Ward, CFP, is the Director of the Financial Wellness Think Tank at Financial Finesse, where he guides industry-leading research on workplace financial wellness best practices and employee financial trends.