How employers can help employees with financial insecurity: A Q&A with Tate Hackert

More than ever, employees are looking to their employers for financial wellness help. Each individual employee has a different need when it comes to finances. Where do employers even start?

Tate Hackert, co-founder and president of ZayZoon, suggests financial planning programs, Emergency Spending Accounts (ESA), or Earned Wage Access (EWA) as places to start.

With 63% of the workforce living paycheck to paycheck, more and more employees are struggling to accommodate unexpected and everyday expenses. What do you see as the main contributing factors to this rise in financial insecurity?

Employees are struggling to make ends meet because their daily expenses are outpacing their income. At ZayZoon, we have the benefit of being able to directly interact with employees across the U.S. and our data shows that they’re most stressed about paying their bills, followed by having a place to live, putting food on the table, and navigating emergencies. The anxiety produced by a potential recession and decreased job security has many Americans wondering what will come next.

How has the current economic climate exposed existing issues around financial literacy and the need for financial wellness support? Why are employers, specifically, in a position to address these pitfalls with their employees?

Last year, we launched a survey, the State of Financial Wellness, to thousands of employees because we wanted to gain a deeper understanding of the challenges they’re facing in the workplace. The insights were telling. Even though a quarter of respondents are very stressed about their finances, only 44% have a personal budget to track monthly spending.

For many employees, managing personal finances can be stressful and overwhelming – there’s a huge opportunity for employers to step in and help. In fact, more than half of employees think employers have a responsibility to assist them in improving and maintaining their financial wellness. Organizations that provide benefits and resources with reliable information on how to earn, save, invest, protect, spend and borrow can save employees from seeking advice from risky online programs or advisors. By offering financial wellness benefits and education programs like guest speakers, monthly webinars, and access to financial planning apps or advisors, employers not only show they care for their workforce, but also create a positive impact on the workplace culture by improving employee engagement, performance, and retention.

There are many options when it comes to financial wellness benefits in the workplace. Financial planning programs, Emergency Spending Accounts (ESA), or Earned Wage Access (EWA), are popular offerings, but what do these programs look like when they are implemented?

There are some financial wellness programs that are effectively hands-off for businesses and require little to no administration. It’s important for employers to take the time upfront to choose benefit offerings that have the potential to make an immense impact on their teams, without negatively burdening their administrative functions. Typically, hands-off solutions leverage existing team communications (email, payroll portal, IM system) and provide easy-to-digest materials for communication with employees. Additionally, these solutions may even offer standing webinars and support sessions for employees to join.

Through proper diligence and implementation of a solution, employers should be able to sit back and feel the effects of those decisions, which can often include easier recruitment, increased productivity, and lower turnover.

How can an employer determine which financial benefits are needed by their employee base? Once implemented, how can employers encourage participation in these programs or benefits?

In order to determine which financial benefits best fit employee needs, business leaders need to understand their employees’ biggest financial concerns. Accomplishing this is actually quite simple. Employers can leverage survey tools to collect data or gather feedback from managers through 1:1s with various team members. Business leaders can also look to their peers at similar size businesses to identify if they are offering financial benefits and what they might be.

Once employers implement these benefits, they don’t have any value unless employees are utilizing them. Awareness is key. Specifically, with the expansion of benefit categories, it’s important to provide clear and concise information regularly to employees on how they can access new benefits. This can include a monthly benefits newsletter, an employee hub/portal, direct meetings, Slack communications, and more.

Simply revisiting and reviewing benefit offerings once a year during open enrollment can be overwhelming for employees and results in many employees being unaware of the valuable benefits their employer offers. Business leaders can offer employees bite-sized chunks of information to keep all benefits like mental health resources, disability coverage, or financial wellness programs top of mind for employees.

During a time when businesses are preparing for a recession and facing budget cuts, why is now the time to invest in financial wellness benefits?

A volatile economy means a volatile workforce, and when employees are financially healthy, businesses are too. Still, while headlines are dominated by large tech layoffs, many businesses continue to hire. No matter what position a business might be in, investing in improving the financial wellbeing of your team is always a win.

Employees that are concerned about their financial wellness lose an average of 11.4 hours of productivity each week, thus directly impacting business efficiency. Financial wellness benefits like Earned Wage Access are not only helpful as a recruitment tactic, but can also protect business results through economic uncertainty.

Related: Financial wellness: Low investment, high-output benefits that offer peace of mind

Helping employees afford day-to-day expenses through financial wellness benefits will not only improve morale, but 89% of employees say benefits like Earned Wage Access would generate more loyalty to an employer. Doubling down on these benefits during an economic downturn is one of the best things you can do for your business.