After a year filled with economic turmoil, followed by the holidays—a season when people tend to overspend—it’s likely that many of your employees are starting 2024 under a fair amount of financial stress.

A new year is a golden opportunity to help your workers reassess their financial well-being and take proactive steps towards a brighter financial future that lasts all year, every year.

Why Financial Resolutions Matter

Long-lasting high inflation has pushed American workers’ financial wellness to an all-time low, according to a recent Bank of America report. Increased living costs continue to impact employees’ overall financial health, and salary increases aren’t keeping pace, leaving workers further behind than ever:

• Over two-thirds of employees feel the cost of living is outpacing their wages.
• Only 4 in 10 employees rate their financial wellness as good, an all-time low.
• Thinking long-term is getting harder for many employees—just 31% continue prioritizing their retirement, down from 45% in 2022.
• 45% say they’re not saving for future healthcare costs.

Another troubling trend is an uptick in 401k hardship withdrawals. The top reasons given for tapping into retirement savings are avoiding foreclosure and paying medical expenses.In this climate, almost all employers (96%) feel somewhat or extremely responsible for their employees’ financial wellness. However, these concerns don’t necessarily translate into meaningful action: Only 2 in 5 employers offer financial wellness programs, and often, the impact of these initiatives falls short of expectations.

Strategies for Optimizing the Impact of Your Financial Wellness Programs in 2024

Let’s look at some ways to ensure your company creates a culture of employee financial wellness for employees that lasts all year round:

Strike a Balance Between Short- and Long-Term Financial Objectives

Many employee financial wellness programs include a plethora of retirement planning tools and resources. While having a long-term financial focus is important, many Americans’ most significant financial needs are immediate. Holding seminars on how to boost savings isn’t much use to the nearly two-thirds of employees who are living paycheck-to-paycheck. Pressing obligations like student loans and credit card repayments can completely erode people’s ability to afford retirement savings and other long-term investments.

Employers should, therefore, incorporate financial education and benefits that provide shorter-term value to their workers into their programs. For instance, student loan debt repayment assistance and tuition reimbursement will provide an instant and welcome boost to employees’ overall financial well-being.

Employer-sponsored on-demand pay schemes can also help greatly. Also known as Earned Wage Access (EWA), these schemes allow employees to receive immediate payment for completed shifts. To better understand how EWA helps U.S. workers avoid financial hardship and increase job satisfaction, consider these statistics from a recent study of Payactiv EWA users:

• 74% of employees say their households would be negatively impacted without timely access to earned wages.
• Three-quarters say timely access helps them cope with rising costs.
• 71% report improved budgeting due to timely access to their earned wages.

Make it Personal and Interactive

How well are your employees really being served by your financial wellness offering? Are your people retaining the information they’re learning and regularly using their financial tools and benefits?

Many companies invest in technology platforms or solutions that claim to improve workers’ financial wellness and just assume they’re working. Unfortunately, all too often these systems bring little value or ROI. Financial well-being isn’t a one-off initiative that can be bought off the shelf. Building employees’ financial literacy and empowering them to manage their money better needs to be embedded in a culture that’s consciously built and continually nurtured.

So, instead of offering dull, lengthy coursework, consider introducing free, confidential, 1-on-1 financial counseling sessions where employees can ask questions in safe spaces and get answers tailored to their specific circumstances from qualified professionals.

Best Foot Forward

By making financial wellness for employees part of your company culture, tailoring programs to your employees’ needs, and investing in programs that grant them immediate financial relief, such as Earned Wage Access, you can put your employees on a journey to financial health improvement that lasts through the year and beyond.

Once you’ve settled on your list of financial wellness benefits, your communication with employees should be consistent and clear throughout the year and offer opportunities for them to speak with an HR representative if they need more information.

Payactiv, a leading corporate financial wellness partner, focuses on bringing employees permanent financial stability through a blend of short- and longer-term financial wellness initiatives. In addition to EWA, we offer financial education tools and learning resources designed to help your employees maximize their income, minimize their money worries, and face the future confidently.

Learn more about our services or get in touch to request a demo for your company.

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