Financial stress is at record levels. More than two-thirds of employees report financial stress, and 88 percent of American workers say the pandemic has negatively impacted their finances. That stress translates into distracted employees with lower job satisfaction and increased absenteeism linked with financial problems.
And the traditional financial tools employees have don’t always serve their needs. For example, 401(k) and other retirement plans are focused on long-term financial goals, and programs designed to assist with student loans don’t help those struggling with other forms of debt. That gap was underscored last year when the COVID-19 pandemic caused financial stress to soar nationwide.
Like millions of Americans, Dwane had a plan — one that didn’t anticipate a global pandemic. “My wife wanted to retire early,” he explains. “Her plan was to do a partial retirement — substitute teaching to make up that gap. When COVID hit, she didn’t want to go back to the classroom.”
Even though Dwane, a senior business analyst in Atlanta, Georgia, had a secure job and income, his household finances were impacted by this sudden, unexpected event. He also supports his son financially and wouldn’t be able to handle both without help. He decided to consolidate his debts to free up cash to cover their expenses. “Having my wife not going into the workplace right now while COVID is going on, I wanted to maintain our current lifestyle by shifting some things around without having to pay a ridiculous interest fee or initiation charge.”
His employer had recently introduced Salary Finance as an employee benefit. Salary Finance offers employees easy, affordable loans that are paid back directly from their paychecks. Dwane looked into it and liked what he saw. “The interest rates were going to be fixed and extremely reasonable,” he notes, “and it was going to be a payroll deduction. All of these things just made it appealing to knock out that last few thousand dollars that I just wanted to consolidate.”
Dwane estimates he is saving $100 a month because of Salary Finance. “To have an extra $100 a month doesn’t seem like an awful lot,” he says. “But that’s money I can put into saving or [use to] make an additional payment on the principal of the house because I’m trying to get the house paid off. It just allowed me to make better long-term decisions as I’m looking to retire myself one day.”
Employee stress and satisfaction
Making better financial decisions — and having better financial options — not only lowers employee stress, but it also benefits employers. Employees with financial stress are more distracted, have lower attendance, and spend time at work thinking about and dealing with financial troubles. And existing financial benefits don’t always offer the flexibility that a product like Salary Finance has.
“Like most places, my employer offers a stock purchase plan,” Dwane says. “They do matching into your 401(k). But Salary Finance is the only thing where you can take a look at your overall budget, and it has a direct, immediate impact. You know, it’s really set up in a way to help you succeed with your financial goals.”
For Dwane, Salary Finance was the perfect solution for his financial stress. “Some tools are just better than other tools,” he says. “Salary Finance allows us as employees to say, ‛Hey, this is a need that I have at a particular time’ and just be done with the process. And from a financial security perspective, this was something that could assist without being predatory, and that is a secure feeling.”
To learn more about how you can help make your employees financially healthier and happier, visit Salary Finance.