CEO and Founder of DailyPay Jason Lee talks with Senior Editor Lauren Dixon about how real-time pay impacts businesses and their employees.
These were the top Talent Economy stories for the week of April 2-6, 2018:
How Do Financial Wellness Programs Benefit Employees?: Amid stagnant wages and rising costs of living, corporate-sponsored financial wellness programs step in to assist employees, writes Senior Editor Lauren Dixon.
Building Leaders of the Future: Driven by complexity and fueled by rapid change, the practice of leadership development continues to evolve, writes Editor-in-Chief Mike Prokopeak.
Talent10x: Pinsight Founder Martin Lanik on Creating Leadership Habits: Pinsight Founder Martin Lanik joins Senior Editor Lauren Dixon to discuss the flaws in today’s leadership development programs and how to create effective habits as managers.
The C-Suite Needs to Get Smarter About Time: Executives must adapt to modern workplace realities and find the most efficient ways to manage their diverse workforce, writes Talent Economy Influencer Raj Narayanaswamy.
Video: Update Policies About Transgender Workers: Although most states lack specific laws for transgender workers, experts suggest that employers get ahead of the rules that are coming, via Senior Editor Lauren Dixon.
Finally, these are the top talent stories we’re reading from around the web for this week:
Indian companies are increasingly shy about applying for H-1B visas, reports Quartz.
Here’s how the tariffs put on China are already impacting U.S. farmers, via Bloomberg.
More than 3,000 Google employees signed a letter to its CEO, urging him to not develop AI technology for war, reports The New York Times.
Job offers today are increasingly likely to come via text message, writes Fast Company.
Our names could determine our careers to some extent, writes BBC.
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On December 10, 2017, Shayron “Shay” Trostel was driving her 1994 Jeep when another car collided with hers at 55 miles per hour, sending her into a spin — literally and figuratively. Trostel’s doctors continue to assess the damage to her knee and back, and her car was totaled. She lost 10 days of work as a bartender, server, trainer and bookkeeper at BJ’s Restaurant and Brewhouse in Arlington, Texas, missing out on an estimated $175-$250 per day, she said.
To help their employees in times of need, BJ’s has a Give A Slice program, which employees fund through $1 from each of their paychecks. After filling out extensive paperwork, getting approval from managers and submitting proof of their emergency, employees can receive a handwritten check from the corporate office. Trostel received $800 and a personalized note. “I was extremely surprised and so appreciative of the support that BJ’s gave us, not just from a manager level but from a corporate level,” Trostel said. “It was really nice.”
While this financial assistance program was not part of her decision-making process when taking the job more than a year ago, she said their help in her time of need “absolutely” impacts her performance and loyalty to the company.
Given the low unemployment rate in the United States and competition for talented, committed workers, companies are offering financial wellness initiatives that include traditional benefits like health insurance and 401(k)s, assistance with student loans, and even nontraditional benefits such as pet insurance. According to BJ’s careers site, the company offers many of these, including life insurance, pet insurance and identity theft insurance.
Given the lengthy hours spent at work, and with medical insurance and retirement savings being mainstays in corporate life, the prevalence of financial wellness programs is another example of employers becoming the financial home of employees, said Jeff Oldham, senior vice president of global and institutional markets at Benefitfocus, a benefits management software provider based in Charleston, South Carolina. Because the majority of employers are offering similar medical and retirement benefits, employers have to look above and beyond those to attract and retain core employees, he said.
Beyond retention and talent attraction, financial wellness tools aim to help employees’ physical health. Early stages of the financial wellness space began with physical wellness programs, Oldham said. While physical wellbeing initiatives remain popular and important, it’s nearly impossible for employees to feel healthy if they have a burden of a lack of financial stability, he added.
This lack of stability becomes increasingly apparent with student loan debt sitting at $1.4 trillion and the average American lacking substantial savings. One-third of all employees get distracted by their situation, causing 46 percent of them to spend at least three hours per week at work thinking about or handling finances, according to PwC’s “2017 Employee Financial Wellness Survey.” Additionally, those who are stressed by their financial situations cite health problems from said stress at a rate 15 percent higher than those who are not stressed. Finally, employees with financial stress are more likely to delay retirement, the survey said.
One result from this is that people work long after they want to in order to pay bills, said David Stedman, CEO of BrightDime, a financial wellness software provider based in Charlotte, North Carolina. While there is value for older workers in the office, they tend to carry higher costs in terms of health care and wages than young employees. It’s a win-win for both employers and employees if people retire when they are ready, rather than when forced to, Stedman said.
In the age of stagnant wages and increasingly high costs of living, employees could benefit from more money in general. However, if everyone suddenly earned more, the prices of goods would go up and thus make new wages effectively stagnant, said Sarah Newcomb, behavioral economist at Morningstar Inc., an investment research firm based in Chicago. Additionally, people earning six-figure salaries can also have credit card debt; they can still be spending too much and losing sleep at night if they haven’t mastered the fundamental financial competencies of keeping track and being conscious of emotions and motivations around money, she said. Newcomb believes there is often room to become financially well without a raise.
How to Do Financial Wellness
While financial wellness itself is extremely important, how people access it and improve their financial footing is secondary in importance, she said. Wherever employees feel safe learning about these topics is fine, whether that’s through their banks, employers or anonymous online forums; people simply need to know they won’t be shamed when asking questions, as money is a vulnerable topic, she said.
Many programs, credit counselors and apps aim to help people improve their financial situations, but Newcomb still finds that those who are at the most risk for financial crises and debt tend to not take the abundance of help available. “Even if offered for free, they are the least likely to take advantage of it.” This self-selection bias could be from a lack of free time or energy to seek out programs, or it could be on the financial institutions to better market their services.
One issue could be that many programs treat financial wellness as if there’s only math involved, when there’s actually many emotional and social factors as well, Newcomb said. Money management should be compassionate, nonjudgmental and nonmathematical.
Context is also important. “One of the biggest disconnects that I’ve observed in the financial advice industry is that a lot of times it’s people who have always had money and privilege and security trying to give advice to people who never have,” Newcomb said. In defense of its low wages, McDonald’s in 2013 created a budget for its workers that fell short on some basic understandings of how people spend their money; the budget lacked groceries, child care, realistic health care costs, clothing and more.
“C-suite people need to check their privilege a bit and if they’ve come from lower down the [economic] ladder, try to remember what it was like. If they haven’t, put the leadership in the hands of those who have,” Newcomb said.
To get the most out of financial wellness programs, BrightDime’s Stedman added that business leaders should make sure their initiatives follow five criteria:
- Make sure advice is holistic and personalized. “It’s tough to provide pinpoint advice unless you know the holistic picture of a person’s financial situation,” he said.
- Ensure there is continued engagement. Financial wellness needs to be a lifestyle in order to have long-term effects. If engagement is low, companies need to improve communication and marketing of their offerings.
- Measure and show data on the effects of initiatives and third-party providers.
- Keep the information aggregate. Privacy is important, so there should never be information about individual employees.
- Finally, be sure vendors don’t have hidden agendas, such as wanting to sell other products. This will impact engagement among employees.
While there are many ways to help employees become financially well, Stedman emphasized that one size does not fit all. By helping each worker with their individual needs they will become more productive, creating a winning situation for employees and employers. “When they help their employees in this way, they’re also helping the company,” he said. But the reasons to help workers go a step further: “From a moral standpoint, I think there’s a great responsibility for all of us to help.”
Lauren Dixon is a senior editor at Talent Economy. To comment, email firstname.lastname@example.org.
Editorial Director Rick Bell joins Senior Editor Lauren Dixon to discuss Ultimate Connections, the conference for Ultimate Software in Las Vegas. The two gab about payday advances and what’s new in the world of HR conferences.
Women may be from Venus, and men may be from Mars, but are their benefits preferences really light years apart?
A recent study by professional services firm PricewaterhouseCoopers, “Work-life 3.0: Understanding how we’ll work next,” found that 64 percent of women and 54 percent of men said “work-life balance is very important.” However, other opinions on benefits are more polarizing and perhaps not as closely shared.
MassMutual found that men’s top benefits of choice are more vacation time (50 percent) and better 401(k) matches (43 percent). Meanwhile, 44 percent of women surveyed said they valued vacation time most and 40 percent said they valued 401(k).
Those differences aren’t groundbreaking, but one of the biggest disparities between the two genders was on education and tuition reimbursement: 18 percent of men said this was their benefit of choice, compared with 27 percent of women, according to the MassMutual survey.
According to Mercer’s “When Women Thrive — Gender Equality Imperative,” men are focused on retirement and asset accumulation and also appreciate paternal leave options. Women, however, ask for benefits more around general financial wellness, according to Pam Jeffords, a partner at the human resources consulting firm. Jeffords said that although women and men are both equal in terms of financial literacy, women don’t think they are. Therefore, financial wellness courses may be a great value proposition for female job candidates.
Jeffords also said that since firms tend to evaluate their health care by the workforce as a whole, they tend to focus less on some issues that disproportionally affect women. Women increasingly experience anxiety, depression and sleeplessness more than men, which negatively impacts their ability to do their jobs.
Jeffords encouraged executives to attempt to understand these issues their workers experience. One way to do this is by looking at employee health issues by gender. While employers can’t see individual information in their insurance provider’s data warehouse, Jeffords said they can parse out by demographic. Then, to make meaningful changes at an organization, “not only can the employer put some wellness programs in around that [health issue], but sometimes just simply communicating to your female employees, saying ‘Hey. We’re seeing this.’ …That alone is going to make women feel good,” Jeffords said.
Especially for companies with struggling diversity initiatives, this attention to women’s wellness could help drive their ascent to top leadership roles, Jeffords added. By ignoring women’s unique financial and wellness needs, attempts to improve diversity may be incomplete. Furthermore, studies have shown that more equal representation in leadership drives profits. “If you think about how much the average employer is spending on diversity and inclusion to have no results, if it can actually drive results, that goes straight to the bottom line,” she said.
Others disagree that benefits preferences are materially different between genders. Rather, they said that the lifecycle of workers might be a better indicator.
Dow Scott, a professor of human resources and employment relations at Loyola University, Chicago, has studied pay preferences by gender and found only minor differences between the two. Men preferred variable pay only a little more than women did. “You can’t just rely on things like gender, age — these sort of demographic cues — to tell you how people want to be paid,” Scott said. People may have different preferences, but these vary more on an individual basis than by demographic.
As with pay, benefits preferences likely have more to do with lifestyle, not gender, Scott said. “A man and a woman that both are single and living by themselves will probably want about the same thing, but if it’s a man and a woman that are both married, they’ll want something different.”
For example, an individual with children would probably be more likely to want health insurance than someone in their early 20s, who can still be covered by their parents’ insurance.
One solution to differing benefits preferences could be a personalized benefits system, with a menu of options all covered under a company’s benefits plan. This option considers the employee’s lifecycle, not from an employment standpoint, but from life itself, said Sreeni Kutam, division vice president of HR for the Major Account Services business unit at ADP, a human resources consulting company.
From early career workers, to newlyweds, to new parents, to those exploring retirement, “the demands and the needs of [those] distinct segments are different, so organizations are trying to meet those varying demands at that point in life,” Kutam said.
Those demands also might differ based on geography. Kutam said that ADP’s global presence created a need to have country-specific benefits programs. For example, with women working night schedules in India, it’s common to provide safe transportation back to their homes, he said. “Organizations need to be conscious of the needs of the global populations that they have in their workforce and meet that demand in an appropriate way,” Kutam said.
Finally, Jeffords advised to be conscious of biases like offering benefits to certain groups. For instance, some managers could think that flexible work schedules are meant to benefit working parents. However, employees without children could feel left out of the benefit if it isn’t offered to them. “Managers really need to understand that they have to take their own judgments and biases, if you will, out of the equation and look at the policy and how it’s designed to help all employees,” Jeffords said.
Lauren Dixon is an associate editor at Talent Economy.