How Fintech Can Help Improve Employee Retention and Productivity

Women Partners

By Zach Blumenfeld/ Cookie Jar

With the economy at or below full employment since April 2018, employers are finding that attracting and retaining top talent is more challenging than it’s been in a decade. Increasingly, companies are offering benefits that go beyond health insurance and a 401(k) to include support for something many workers in America struggle with: personal finances.

Workers need the help: 40 percent of American adults can’t afford a $400 emergency expense, and only 39 percent could afford one of $1,000. In a PwC survey about workplace benefits, the benefit employees were most likely to want (but not have access to) was help with their personal finances.

As you might expect, this financial precarity impacts performance in the workplace. About 40 percent of workers spend between one and three work hours each week dealing with or worrying about personal financial matters. Another 40 percent spend more than three hours. And many workers – especially younger ones – admit to actually taking time off to deal with personal financial matters.

In other words, employees’ financial struggles have become a liability for their employers.

That’s why a whopping 90 percent of the country’s largest businesses now offer financial wellness programs, including help with debt management and budgeting. More and more employers, it seems, recognize that improving their workers’ holistic wellbeing can offer them a long-term competitive advantage by improving focus during work hours and even preventing absenteeism.

So how can smaller businesses compete?

One answer lies in new fintech startups and products appearing on the market that allow employers to offer financial wellness benefits with little or no upfront investment.

Offerings like Cookie Jar, for example, let small employers create automated (and matched) savings programs for their employees. Unlike financial wellness initiatives designed for enterprise-sized businesses, Cookie Jar offers the setup-in-minutes experience we’ve come to expect from other fintech offerings.

Another exciting option is Peanut Butter, which empowers employers to help employees pay off student loans. The startup acknowledges the reality of crushing debt that is adulthood for many millennial workers.

As Robert Kennedy, senior vice president of Fidelity Benefits Consulting, noted, given the  findings on how financial worries can distract from primary work duties, employers now see wellbeing programs as platforms “to improve employee engagement, increase worker productivity, and reduce absenteeism.”

So how urgent is the call to offer financial wellness benefits?

Less than half of employees currently believe that their employers care about their financial wellbeing. Low unemployment overall and the often-cited skills gap for STEM jobs mean that the most coveted employees will have their pick of positions, meaning that employers who hope to win them will have to offer attractive benefits.

But offering these benefits isn’t just about winning over the best and the brightest: employees at every level are unlikely to be their most productive as long as worries about personal finances interrupt the work they’re being paid to do.

In other words: the call is urgent. Employers interested in keeping their workers – and keeping them happy – will find ways to help them improve their overall financial situation.