After two years of upheaval due to the pandemic, the last thing companies needed was the job resignation wave that took the world by storm. Right now, most companies are either struggling to fill in the millions of open positions – or are urgently searching for bold retention strategies that will make their current workforce stay.
The reasons for workers quitting are manifold, with a bad employee-manager relationship (19%), low pay or lack of benefits (17%), and an insufficient work-life balance (13%) as most commonly cited explanations. For the majority, the dreadful outlook of working in a 9 to 5 job over the next 30+ years to pay off their college our housing loans was a deciding factor in the decision as well. The consequences are notable: Reducing the company’s profit, increasing recruitment and training costs, disrupting routines, and increasing pressure on the workers that haven’t handed in their resignation.
As much as the pandemic was a wake-up call for the working force, the Great Resignation should become a critical moment for employees to rethink their current employment approach. It’s time to offer employees tools that boost their financial health, use financial help for enhancing mental health, and make them happier in the long run.
Many people are fed up with the idea of having to go to work every day for the rest of their lives – without knowing how much money they need to be financially independent during retirement.
A 2021 study by Northwestern Mutual found that, on average, people save $98,800 for retirement. At the same time, people's expectations for how much they'll need to retire comfortably is $1,047,200. This means the average person won’t be able to live the life they want when retired – and this is driving people to rethink their financial situation.
It’s important to provide retirement-saving tools and education. Have you ever heard of FIRE as in ‘Financial Independence, Retire Early’? It is a savings strategy recommending you to invest more than 50% of your annual income to retire in your late 30s or early 40s. While there are many rules on setting the savings budget for early retirement, there are even better tools helping people build an optimal FIRE plan.
Retirement funds estimators driven by AI allow users to calculate how much of retirement they must invest annually. What costs can one cut from their current expenses to achieve this goal? As an employer, you might offer such financial analysis to help your employees achieve greater financial independence. Equipping them with a bank account that spits out financial statements and indicates savings or retirement insurance plan recommendations, you give financial help for mental health.
2. Help with the bills
People mostly spend their salary on housing, food, mobility, and lifestyle choices. However, a big chunk of their budget might also go into expenses related to their job. While it's possible to get tax deductions for work-related expenses, many people don't know the exact costs.
That’s why you can accommodate your employee’s needs by offering them compensation for work-related costs. Imagine they find out they're spending about 11% of their salary on private transportation, using Uber or single-ride bus tickets to commute between home and the office. You could offer that employee a discount on an annual public transit pass instead – or give the option to work from the home office.
3. Personalize benefits in addition to salary
Everyone has different needs – but most get the same benefits and salary checks. However, a workplace can be much more attractive with personalized compensation. For example, suppose an employee’s financial assessment shows that they have high health costs because their insurance doesn’t cover most of their spending. In that case, employers could help the employee to identify better health insurance for that specific employee. Other employees might opt for education benefits, including tuition reimbursement or employer-provided loan repayment.
Some companies even offer investments instead of salary benefits – like businesses that partly pay their employees in crypto, or companies at the stock market that hand out businesses’ shares to employees (tied to dividends). In the end, it all comes down to looking at each individual’s financial status, understanding their personal needs, and customizing compensation to this employee.
Paying for financial health assessment tools, or giving seminars that help them measure their financial health will show your employees that you have their best interest at heart.
A financial wellness program works like this:
•Set up a financial health program, including educational resources and financial assessment tools to engage employees (retirement readiness, financial literacy).
•Assess the current financial situation of your employees, including their financial stress level and current financial health.
•Tailor a financial wellness plan for each employee.
•Establish metrics to measure success (program costs, utilization rates).
After all, flexibility with money and salary is a key aspect of fighting the Great Resignation. By empowering employees on improving their financial health and personalizing pay and benefits towards their individual needs, you will make a strong statement why people need to stay in your company – or why they should come on board in the first place.
Connect with BOND.AI to learn how our platform can help people and companies improve financial health.