Providing employees with a 401(k) as their sole financial benefit is like buying a new engine for a car that doesn’t have any tires. It’s a start, but won’t be enough to get the driver to their final destination.
Your employees have a broad range of personal and professional goals that a 401(k) won’t support. Depending on the workforce, your employees could have multiple financial needs. For example, your employees may need help with something as small as properly filling out a W4 form at their first job or as complex as saving for a child’s college fund.
Additionally, financial freedom and flexibility are becoming a more common goal than the standard retirement. Many people hope to retire sooner or take several mini-retirements throughout their careers. The good news is that there are many ways you can support employees throughout their financial journeys.
Start by looking at your current financial wellness benefits. According to SHRM, 95% of organizations offer retirement plans, only 24% offer personal finance coaching to help with the basics such as budgeting, savings, debt and credit management.
There’s no denying that a 401(k) is an important benefit that helps your employees secure their financial futures, but saving for retirement is only one aspect of their financial life. Let’s look at how you can support employees by offering three additional financial wellness benefits.
1. Emergency Savings Accounts
Only 15% of employers offer emergency savings funds to their employees, according to SHRM’s research. With almost half (49%) of Americans not being able to cover a $400 emergency, you can see why broadening the benefits you offer could be life-changing.
An emergency savings account (ESA) is similar to a 401(k) in that employees can automatically deduct contributions from their paychecks — and employers can match those contributions. Automated contributions make enrollment easy and stress-free for employees, and they’ll appreciate your investment in their financial well-being, especially during tough times.
2. Educational Benefits
Education benefits are a long-term investment in your employees’ skills and financial future. By offering tuition reimbursement, for example, you help employees save money while pursuing an education that can accelerate career growth for years or even decades to come. Tuition reimbursement helps employees spend less on tuition today while giving them the skills they’ll need to increase their compensation over time.
Tuition is just one way you can help employees meet their educational needs in a financially responsible way. The same study from SHRM found that 18% of working Americans highly value education benefits such as tuition reimbursement, student loan repayment and access to 529 plans. These benefits help employees meet their financial needs while chasing their biggest goals.
3. Financial Coaching
Financial coaching benefits are a personalized way tailored to help your employees set and achieve their financial goals. With coaching, employees learn how they specifically can:
- Create a budget
- Improve their credit
- Pay down debt
- Manage student loans
- Build emergency savings
- Set long-term savings goals
- Improve spending
- Manage financial crises
- Prepare for major life events
We all have gaps in our financial knowledge and specific concerns and resources. By providing your employees with a range of financial wellness benefits, including access to individual financial coaching, you help them get professional help with the financial issues that directly impact their lives.
Want to learn more about financial coaching for your team? Schedule a demo with Questis and mention this article to receive a free coaching session.