Employees are facing financial responsibilities that are putting a strain on their performance. Their work is their bread and butter, which is why about half of employees admitted that their financial well-being is negatively affecting their productivity, according to a report on Fast Company. Recognizing the financial impact of the COVID-19 pandemic on their workers, more employers are stepping up by offering financial benefits and advice that can address their employees’ needs. Here are some recommendations that you can consider when setting financial goals for your employees.
Consider their current status
Your employee’s productivity may decrease due to immediate financial concerns. To ease their worries, you can help by considering their financial burdens based on their current status.
Case in point: working parents have their children at the forefront of their minds, so they’re concerned about childcare or educational expenses. You can help employees balance their career and family obligations through flexible scheduling. This is a good option for working parents, as consulting firm Mercer highlights that it does not negatively affect the productivity of employees. In fact, companies that invest in benefits for their staffs’ families observe a five-fold increase in their revenue, due to high talent retention and increased productivity.
Help them plan for retirement
Besides looking at their immediate concerns, you must also anticipate their future needs. Your employees need to prepare for their long-term financial goals because this ensures their stability in the future.
So if you want to invest in your employees’ long-term financial goals, start preparing them for their retirement. Many companies are already doing this by automatically enrolling workers in their 401(k) plans. Another option is signing up their employees to Qualified Default Investment Alternatives on their behalf, such as Target Date Funds. These are mutual funds or exchange-traded funds that will grow assets in a way that is optimized for a specific time frame. By taking this step for your employees you are giving them a foundation that can help them plan for their retirement or long-term goals. You can then contribute a specific amount into their account through a defined-contribution plan if they have a target sum. An AskMoney article on pension plans highlights how employees can choose to either receive a lump sum or have it released as monthly payments once they leave. A company will be able to guide their employees through the best options for their financial goals.
Encourage employees to make SMART goals
Given the differences in their personal lives, your employees are likely to have unique financial targets in mind. Whether they’re saving up for a home or paying off their debts, you can help them achieve their personal goals by doing the SMART (Specific, Measurable, Achievable, Realistic, and Timely) method.
Particularly, we at Employee Experience Magazine believe in SMART Goal Setting, which encourages individuals to make specific, measurable, achievable, relevant, and time-bound objectives. Through this framework, you and your employees can identify the steps and consider the resources that can propel them towards their dream. By laying out concrete and realistic steps, you can help them work their way towards their target.
Educate employees on financial management
Your employees can conquer their financial objectives, especially if they know how to manage their income. By investing in their education, your staff can learn skills about budgeting and make wiser financial decisions. This sets them up for success, no matter what their goals may be.
There are many options that companies can leverage to educate their employees in this matter. Northwell Health maximized digital education programs, such as articles and videos, which are ideal for a hybrid workforce. They also provided financial planning services to employees, so that they can have individual consultations with professionals. Data supports this approach by showing that employees who received education are less likely to fall ill due to high financial stress.
Your employees’ financial well-being directly impacts their productivity. So if you want to improve their performance and increase retention rates, give them a guiding hand when it comes to achieving their financial goals.
Written by Roslyn Jane
Exclusively submitted to emexmag.com