Something’s distracting your employees as they ring up sales and stock shelves.
According to the Federal Reserve, 4 in 10 adults say they would not have the money to cover an unexpected $400 expense. But those who work in the retail sector have an especially hard time. With associates bringing in only $26,000 per year on average, they make the list of the top five industries in need of financial well-being programs.
And the Businessolver MyChoiceSM Recommendation Engine Report backs up these national statistics. During the 2019 Annual Enrollment season, nearly 500,000 employees—many of whom work in retail—were asked how they would handle a large, unexpected expense; 42% said they would go into debt, dip into their retirement savings or simply not know what to do.
But supporting your employees' financial concerns isn’t just good for them. It also makes good business sense for retailers.
Financially Fragile Employees Hurt Retailers
Consider these statistics from PwC’s Special Report: Financial stress and the bottom line. Financially stressed employees hurt retail businesses on several fronts:
- Behind the Register: 44% of financially stressed employees deal with money problems 3+ hours each week while on the clock.
- On the Showroom Floor: They are two times more likely to miss work due to personal financial issues.
- At the Doctor: Employees hurting financially are more inclined to experience health issues caused by financial stress.
The Direct Impact to HR
Poor employee financial well-being also has a direct impact on your HR team, particularly in the areas of turnover and retention. That’s not good news considering that the retail industry already has one of the highest turnover rates in the US economy—just above 60%. That’s costly; recent estimates indicate that the high turnover rate in the retail sector translates into more than 230 million days of lost productivity and $19 billion in costs associated with recruiting, hiring and training.
As Americans’ financial well-being continues to deteriorate, retailers can’t afford to ignore the following statistics:
- Retention: 76% of financially stressed employees would be attracted to an employer who cares more about their financial well-being.
- Compensation: 58% feel their pay isn’t keeping up with the rising cost of living.
- Competitiveness: 40% of financially stressed employees believe their employer’s benefits offerings are not competitive.
It’s clear: when your employees are hurting financially, your entire organization suffers—from productivity to healthcare costs to hiring and retention.
What’s an HR Pro to Do?
When it comes to investing in employee financial well-being solutions, it’s natural to have a few concerns and questions, especially if this is new territory for you. Here are the top three most common questions we receive from our clients and the HR community at large when considering a variety of financial well-being benefits.
- What’s the lowest-cost method of improving employee financial well-being? We get it, HR departments are stretched thin as it is. Research suggests three approaches are particularly successful at getting results without a lot of lift: financial counseling, small-dollar loans and savings goal accounts.
- How can I find the right benefits that fit the needs of my employees? The best way to find out what’s keeping your employees up at night is to listen. A simple financial well-being survey can yield a lot of actionable information, even if not all your employees participate in the survey. Think about it. If 50% of your employee population fills out the survey, that’s a pretty great sample size to work from. Be sure to send reminder emails about the survey and provide a cutoff date for responses.
- Can we simplify the enrollment of employees into savings accounts as we do with HSAs? Many studies illustrate that behavior change is best achieved by “making the right choice the easy choice.” Saving money is no exception. Simplified enrollment into savings goal accounts will be key to successful utilization. Keep in mind, when you’re searching for a vendor, the more integrated they are to your benefits system the better. Every time an employee leaves your benefits system it decreases retention and engagement.
If these questions occurred to you, you’re not alone. Retailers who are serious about improving engagement and retention rates among their staff have a number of concerns before moving forward. Read the full guide below that goes into more detail and lists seven more FAQs about financial well-being benefits from retailers like you.