It's no secret that competition for the top talent is fierce. With low unemployment, companies are offering more than a good salary to attract the best job candidates. In fact, companies are increasing employee benefits faster than their employees’ salaries. One of the key areas is financial wellness. According to a recent Prudential study, 57 percent of employees said they are “very or somewhat stressed” about their finances—and 30 percent said that financial stress impacts their job performance. One way to improve these dire statistics is by offering employees more options to save money. Here are some of the most popular choices to consider—and how they may impact your employees’ overall well-being.
Retirement Savings Plans
Most companies offer a way for their employees to save for the future. The majority of companies offer a traditional 401(k) plan and 74 percent will match some percentage of employee contributions.
A 401(k) plan allows employees to start saving for retirement. The power of automation makes it easy to set money aside part of their paycheck every month. If they receive a match from the company, their investments may grow even faster. A 401(k) also offers employees tax benefits. Their money goes into the account before taxes, and they can enjoy tax-deferred growth on their investments until they need the money for retirement.
Health Savings Accounts (HSAs)
Preferred provider organizations (PPOs) are still the most popular type of health insurance. But more companies are starting to offer high-deductible health plans (HDHPs) to save on premiums. To cut back on employees' out-of-pocket healthcare expenses, more than one-half of companies pair their HDHP with a health savings account (HSA).
HSAs offer employees three different types of tax savings. The money goes into the HSA before taxes. Employees can invest and grow the money tax-free. There is no penalty or extra taxes on withdrawals when employees use them for qualified expenses.
Healthcare Flexible Spending Accounts (FSAs)
Healthcare flexible spending accounts (FSAs) are another way for employees to save. Two-thirds of companies offer employees access to an FSA, which allows them to save pre-tax money for healthcare. Employees can use the money throughout the year for qualified medical expenses. These plans are generally a good deal—as long as employees use the FSA money by the year-end deadline.
Other Savings for Employees
Some companies also offer benefits for growing families looking to save. Offering more options for working parents to save on child or elder care can be attractive to employees. You may also offer health wellness benefits, like onsite health screenings and classes. If your company values fitness, you may offer discounts or reimbursements for your employees’ gym memberships.
Providing More Opportunities to Save Pays Off
As companies spend more on employee benefits, you may want to consider what your company provides. Financial wellness is a top concern for employees—and offering ways to save may pay off. Employees may feel less stressed about money, which may boost happiness and productivity. You may also rest easier knowing your employees have more financial stability.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.