NEW YORK (Reuters) – When companies think about the financial health of their employees, they may consider basic issues such as salary, pension benefits and health coverage.
Everything is fine, but not enough.
True “financial well-being” these days addresses broader issues like planning assistance, student debt, tuition reimbursement, and dozens of other potential stress points.
As Morgan Stanley’s Chief Financial Officer, Krystal Barker Buissereth is leading companies towards a more holistic understanding of where workers could be injured – and how a few financial lifelines can help those in difficulty while stimulating an employer’s talent attraction and retention efforts.
She spoke to Reuters about how benefits can change the lives of employees.
Q: How exactly do you define financial well-being?
A: Help people put what matters to them on paper. What is keeping them from reaching their financial goals and how do you make a plan to meet them?
Most people don’t even have a financial plan, so it’s like playing a dart game with no target.
In this era of COVID and the Great Resignation, people need help beyond simple retirement. It could help them with short term needs like budgeting. This could help them build up emergency savings in the event of a health crisis. It could help pay off student debt. Financial well-being is global.
Q: One of the biggest trends right now seems to be student loan assistance for employees. Why?
A: The fastest growing portion of household debt is student debt. The reason this is so concerning is that it gets in the way of planning for other financial milestones.
If I’m stressed out about student debt, it can delay my retirement savings. Companies therefore seek to alleviate some of this stress, either through individual coaching, or through direct contributions, or both.
Q: Can this also be considered a diversity issue?
A: Diversity and inclusion are part of that, because if you look at the people most in debt, it is often women and underrepresented minorities.
If you’re a business looking to attract a diverse workforce, you want to make sure your benefits are helping the most vulnerable.
Q: Are some companies like Target making the headlines for tuition fees?
A: Almost 50% of companies offer some sort of tuition reimbursement or professional development program, but what we are seeing more and more is full tuition coverage.
Competition for talent is very high, and if my company is looking to stand out in a competitive workplace, benefits can be this differentiator. It is one of the best tools in your arsenal.
Q: I imagine you’ve seen a lot of data, so how are people doing financially right now?
A: People were absolutely shocked. What COVID has highlighted is that some populations have been disproportionately affected more than others.
But no matter where you are on the continuum, this period has been a wake-up call. A statistic revealed that 65% of households lost income. When you ask people what causes them stress, the number one answer is financial problems – more than health, work or family.
Q: There is upward pressure on wages, so will this help improve financial well-being?
A: A further increase in salary can be very helpful, especially for those just starting out, but it is only part of the equation in the larger framework.
Q: There are a lot of changes in this area, so what’s the next step?
A: There is no one-size-fits-all program, so we are planning more “cafeteria” style plans, with a menu of different perks for employees to choose from. It’s the gold standard, but many companies haven’t even started with the first few menu items. They have a retirement pension, and that’s about it.
Employees are hurting, they need help, and what we envision is that companies will start to fill more financial gaps.
Q: What financial lessons are we going to learn from the past few years?
A: Just like 2008-2009, it was an eye opener for many of us. We may not have the financial cushion that we thought we had.
For employers, they’ve learned that attracting and retaining talent isn’t just about pay. Their benefits should be linked to their goals and objectives (in terms of human resources), so that employees can perform at their best at work.
(Edited by Lauren Young and David Gregorio)
Copyright 2021 Thomson Reuters.