How Financially Prepared Are Your Employees?
Just when one of your employees thought they were getting ahead with their finances – paying off student debt or having some extra money to put into their savings account – their car might need a tune-up, or their landlord has decided to raise the rent. Whatever the source of this unexpected expense, they often find that they’re stuck with a bill they didn't budget for and will be forced to find a way to manage the burden single-handedly.
So what are employees' biggest financial strains, and how can employers help alleviate some of the stresses caused by these monetary issues? If you want to know what kinds of financial troubles your employees might be facing, continue reading to see what over 2,000 Americans said when we asked the tough questions about their money matters.
What Employees Want, and How to Provide for Them
Many Americans just aren't saving enough money. In fact, 42 percent of survey respondents had little to no savings, and 35 percent were not able to save more than 5 percent of their income. Employers can help alleviate some of the burdens of saving for retirement (or a new car, for instance) by offering direct deposit with the flexibility to deposit to more than one bank account. Employers can also offer a 401(k) with a matching contribution as a healthy retirement plan option for employees.
Unexpected expenses were also a major concern for participants. From sudden medical bills (15 percent) to unanticipated automobile-related costs (20 percent), these expenses can cost employees far more than they earn. Twenty-nine percent of respondents even had to ask a parent for help to pay unexpected expenses.
Offering health insurance or a flexible spending account (FSA) could help with medical costs, and a carpool participation incentive could come in handy when employees struggle with car finances. Employers can also consider including an employee assistance program (EAP) in their benefits package as a resource that workers can turn to when dealing with difficult situations.
Unexpected expenses aside, it's also difficult for many to pay for day-to-day necessities. Nearly half of Americans surveyed had less than $1,000 in their checking account. That's less than $1,000 for rent, food, transportation, media and communication, and other daily expenses. When it came down to the wire, respondents looked into obtaining a second job (14 percent), eating low-cost food (16 percent), and canceling a gym membership (2 percent).
For those who looked into getting a second job to pay their bills, it's worth mentioning that the additional responsibility may impact the work they do full-time. Employees get less quality sleep and are more prone to be irritable or stressed working second (or even third) jobs to make ends meet. Office culture and morale can also suffer when employees don’t join the team for a work lunch or after-hours drink because they can’t afford to or are at their second job.
Employers can step in to assist their team, however. Consider adopting a bonus plan, offering overtime opportunities to workers who are looking for extra hours, or gifting holiday bonuses to employees. Offer on-site snacks and lunches so everyone can eat – and eat together. And for those who miss clocking in hours at their gym, consider offering discounts for a nearby fitness center or offer onsite physical activities to help keep them fit without an additional cost.
Help Your Employees Avoid the Unexpected
With Paychex, you can take the guesswork out of your organization's human capital management. Our HR solution, Paychex Flex®, can help ensure that employees won't be left wondering when their direct deposit will become available. And you'll feel more secure knowing that your payroll, benefits, and HR administration are fully integrated and running smoothly.
We surveyed over 2,000 Americans to determine their financial situation and how they were meeting unexpected expenses.