The Wall Street Journal recently reported that 2019 boasts the best job market in over 50 years. Unemployment rates are historically low, and there’s a general shortage of talent compared to job openings.
When mentioning this, HR managers and talent recruiters often shrug and say “I could have told you that.” Hiring talented employees has become one of the biggest hurdles for organizations across all industries, from education, to healthcare, and even technology companies. Each year, billions of dollars are lost in productivity because of the inability to acquire and retain top talent.
When you consider the new average tenure at a company is roughly 18 months, and the cost of replacing each lost employee is estimated to be between $40,000 and $80,000, the value of any resource that improves employee recruitment and retention can’t be overstated.
To make their organizations more attractive to the most sought-after candidates, companies have had to do more than just raise salaries and sign on bonuses. Following Google’s lead , colorless cubicles are now exchanged for amenities that were once unimaginable to previous generations. Nap pods, standing desks, ping pong tables, brew taps, and many other luxuries are transforming offices into workplace pageantry or modern works of art.
These benefits, however, have quickly shifted from an attractive temptation for new recruits to an expensive expectation. You can test this by going to LinkedIn, or any other site that posts job openings, and scan the “About Us” or “Benefits” section. You’ll see nearly identical benefits from company to company. In addition to the old standards like 401(k) plans and health insurance, things like flexible PTO, snacks, or gym access have become so common that they barely register when applicants explore new postings and opportunities. This leaves HR teams to rely almost entirely on salary and brand name to attract potential new recruits on open positions.
Here are a few examples taken from real current job postings:
Even with this list of benefits, there’s a gaping hole that nearly all American workers have expressed a desire to have at work. To tip the scales in their favor when recruiting new employees, organizations should offer this more impactful benefit: financial wellness.
When companies offer a 401(k), they assume that they’ve provided necessary financial support to employees. Often through their 401(k) broker, there is an Employee Assistance Plan (EAP) or occasional “lunch and learns” focused on retirement planning. When you consider the fact that over 60% of Americans don’t have $1,000 saved for an emergency, thinking about saving for retirement doesn’t even begin to cover the real financial needs of most workers.
In addition, many financial professionals and advisers will not talk to workers about anything besides saving for retirement. That means if you have student loan debt, credit card debt, questions about budgeting to buy a house, or setting up a 529 plan for your child, you’re essentially left with vague internet resources or no one at all. Too often this leads to poor financial decisions that costs Americans billions of dollars each year.
A Financial wellness benefit, especially those that include one-on-one financial coaching, is an innovative and industry-altering approach to financial guidance. Since the benefit is provided by an employer, workers are provided with a completely free and unbiased financial support system. This benefit can often bring uniquely relevant content, educational materials, and certified financial coaches to answer questions related to all aspects of personal finance.
Financial wellness benefits are often a perfect complement to 401(k) plans. They can provide honest, unbiased guidance to employees on which investment options they should consider, how much (if any) to contribute to their plan, and can answer questions in a way that empowers employees. For employers, the ability to attract and retain top-tier candidates is a particularly valuable reason to roll out financial wellness support to their staff.
Imagine if you’re that new 28 year old applicant, with $38,000 in student loan debt, $6,000 in credit card debt, and has no idea how to begin investing. As you look over three different job offers that share similar salaries and perks, you notice one company that provides you with your own financial coach, that’s free to use, and available to support and improve your financial health.
...which company would you choose?