It’s no surprise that employees are feeling financially stressed right now.
High inflation, the impact of the pandemic, and turmoil in the technology and financial sectors have left many employees concerned about both job security and economic stability.
HR executives are at the forefront of meeting these challenges. Employees are often the first people to turn to for support when they are under financial pressure. Many HR teams have responded by offering financial benefits to support their employees during tough economic times. But HR leaders struggle as much, if not more, than other employees when it comes to personal financial management.
A 2023 survey of 1,400 knowledge workers at large U.S. companies by BrightPlan, a provider of financial and wellness benefits, found that 77% of HR executives reported experiencing financial stress. It has been found. Neha Mirchandani, Chief Marketing Officer and Head of Human Resources at Bright Plan, said only 5% of HR leaders in the survey answered the financial literacy question correctly, compared to 18% of all respondents. . Additionally, nearly 62% of HR leaders said they have unmanageable levels of debt.
“This study really focuses on the fact that financial stress has a significant impact on other aspects of well-being,” Mirchandani said. SHRM Online. “Employers need to look at and focus on all aspects of well-being.”
Deanna Allison, director of benefits, wellbeing and financial programs at financial services firm Bled Financial, said: SHRM Online We believe this data reflects her own team experience.
HR professionals are often responsible for communicating financial health benefits to their teams, but sometimes forget that the content is for them, she said. They focus on making sure employees know about the benefits.
“They’re the executive producers, so it’s hard to enjoy the show,” Allison said. “We take it for granted that they are not seeing the full content that our average employee would see.”
Increased workload for HR personnel
The last few years have been particularly tumultuous for HR teams. Many HR departments were already feeling the pressure between managing a fully remote workforce and developing COVID-19 health and safety measures.
Nearly 60% of HR leaders reported an increase in their workload during the pandemic in 2021, according to a survey by accounting consultancy Sage. Meanwhile, inflation remains high, driving up prices for household essentials such as food and gasoline.
These factors combined to create a perfect storm of economic stress.
“Inflation has eased a bit, but is still at an all-time high,” said Barrett Scruggs, vice president of workplace financial benefits at financial benefits provider SoFi at Work. “This is having a huge impact on household budgets. The number of people who say they are financially well is the lowest since 2016.”
Scruggs said HR leaders face a particularly daunting challenge as they have to support their employees in tough economic times while also dealing with the same challenges themselves. Stated.
“They’re dealing with a lot of internal issues internally, including filling vacancies in a very tight labor market,” he said. “I’m not entirely sure if their financial stress is any different. Compounding their problems is general work stress.”
Support the financial health of your HR team
Financial wellness benefits are one of the ways employers can support the financial well-being of all employees, including HR departments, in addition to more standard strategies such as salary increases. But most companies don’t invest in these benefits.
In the 2021 SHRM survey, 74% of HR professionals said their companies were not adding new benefits to support the financial health of their employees.
Brightplan’s Mirchandani said companies often view financial health benefits as costs, so they are often the first to act when budgets are cut. In fact, a recent Morgan Stanley At Work survey of 1,000 adult U.S. employers and 600 HR leaders found that even though employees are more focused on financial gain than ever before, , found that 1 in 4 HR leaders say their organizations are cutting these benefits to prepare. Be prepared for a possible recession.
But Mirchandani said this may be short-sighted, as such benefits could make a big difference for employers by reducing employee turnover and absenteeism.
“It’s right for employees, but it’s also right for business,” she said.
There are other ways to help your employees with their finances. Allison said employers should consider adding benefits to support retirement workers, such as 401(k) plans with Match, and tools to help workers save for medical expenses, such as health savings accounts. said it should. Access to a financial advisor may also be helpful.
Allison said that at companies that still offer financial wellness benefits, HR executives can better communicate those benefits to their teams. In some cases, HR professionals may feel embarrassed and afraid to ask for help if they do not understand the financial wellness tools their employer provides.
“They tend to put service first and themselves last,” she says. “I hear a lot of guilt, ‘I could do better’.”
Ultimately, the most important tool an employer has is education, Scruggs said. HR executives should focus on educating their own teams, not just their companies, on how to be financially smart.
“I think there is room for improvement in these financial transfer programs,” he said. “Education is the beginning. Then connect employees to the right product. Educating employees is not enough. The big step after that is connecting employees to the right resources.”
Caroline Froncic is a freelance writer based in New York City.