Many employers now offer financial wellness programs for their employees in the form of simple education or counseling.
However, many financial wellness programs don’t actually provide support for one’s current financial problems. In other words, they don’t provide a solution to access cash to pay off debt or unexpected emergencies.
To provide a well-rounded financial wellness program, an employee loan program is needed first.
Why Start With an Employee Loan Program?
Education works far better with a product or service. After all, educating yourself on some of the best practices to get out of debt or grow your savings is difficult when you don’t have a solution for your debt or unexpected expenses.
Unfortunately, many financial wellness programs actually neglect to focus on the loan program because they just think it will temporarily solve the problem. Financial stress is a major problem that has only been exacerbated during the pandemic. In fact, 54% of Americans were recorded to have claimed they had financial stress before COVID-19.
During the pandemic, financial stress certainly didn’t get any better. 42% of Americans with household incomes of more than $100,000 have reported living paycheck to paycheck this year, which is an incredibly high number. Additionally, 61% of Americans reported their emergency funds are on track to run out by the end of the year.
Providing education and financial counseling could help create a better financial cycle, but won’t be completely effective at solving the issue until financial stressors or debt are resolved.
4 Reasons An Employee Loan Program is Non-Negotiable
1. A Benefit For ALL Employees
It’s more likely than not that your organization has a 401(k) program, FSAs/HSAs, life insurance, deferred comp plans or something similar. While these benefits are great, they are tailored towards employees who have savings and aren’t burdened with as much financial stress and debt as others.
On the other end of the spectrum, money stress is very much alive and well amongst your employees even if you cannot see it. Employee loan programs provide support for those who need it most who likely aren’t participating in the other benefits you offer mentioned above.
To read more about the online, predatory loan programs your employees may be turning to, check out this blog.
2. Improve Employee Retention
Reports have shown that nearly ¾ of employees claim financial wellness benefits are important for an employer to offer. Additionally, about 60% of employees have stated that they’d be more likely to stay at a job if their employer offered financial wellness benefits that help them better manage their finances. It should be common knowledge that when employees feel financially secure, they also feel more job security.
3. Provide Financial Support For Long-Term Success
An employee loan program paired with financial education or credit counseling has the potential to be the golden ticket in regards to a financial wellness program. Did you know that more than 20% of employees told the National Financial Educators Council (NFEC) that they don’t have anyone trusted to turn to for financial guidance? Some benefits of providing financial counseling on top of your loan program can help to:
- Improve credit scores
- Manage student loans
- Prepare to buy a home financially
- Protect your home
- Establish a budget
- Consolidates your payments with debt management
4. Make a Difference For Your Employees
Access to safe, simple, and affordable loans regardless of an employees’ financial standing is not something employees can access anywhere. Find an employee loan program that offers loans with no credit check.
⅓ of employees struggle with financial stress. Roughly 11% of Americans have a credit score that is beneath 550 and another 20% have a credit score that is considered “subpar”. When you provide a benefit that is actually a solution for an employees’ financial stress, you can make a real difference for your employees.
The Employee Loan Program Your Employees Need
75% of employees report that they value their companies as a trusted source for assistance when their employers are committed to employee financial wellness.
TrueConnect is an employee loan program that costs nothing for employers to implement and provides financial support to employees when they need it most.
To learn more, contact us today.
