A new study by BHN (Blackhawk Network) Extras, has found employees grappling with persistent increased costs-of-living challenges, evidenced by the strategic utilisation of benefits. The study found a quarter of individuals (25 per cent) confess to having to spread payments to cover childcare essentials like diapers and formula. What’s more, 15 per cent express that if they had additional disposable income, they would put this towards these necessities.
Further analysis found 56 per cent of employees now rely on workplace benefits to purchase essential items – a 31 per cent surge from the previous year. Despite tentative signs of inflation easing, the pervasive spectre of financial unease looms. A staggering 76 per cent of employees express apprehension about their financial futures, admitting they are worried about their finances in the coming year, with Millennials spearheading the distress at a staggering 80 per cent.
The study also found that while 45 per cent of employers fear losing talent to competitors, only a third (33 per cent) are actively taking steps to prevent it. Surprisingly, the data suggests that this isn’t due to a lack of understanding, regarding employee retention strategies. A significant 40 per cent of employers believe that providing additional financial support could stop employees leaving their organisations – an assertion substantiated by the fact that 57 per cent of employees have sought financial coaching or education in the past six months, independent of their benefits package.
This disconnect raises a poignant query: why do only 16 per cent of employers offer financial coaching or education, especially when nearly one-fifth (19 per cent) of employees crave more comprehensive financial guidance from their employer? It underscores a glaring gap between employee concerns and the solutions preferred by employers for retention.
Furthermore, the research delineates striking generational disparities in attitudes toward benefits provision. Younger cohorts, namely Gen Z and Millennials, are significantly more frustrated with current offerings (74 per cent and 69 per cent) compared to older generations (Baby Boomers, 39 per cent, and Gen X, 55 per cent).
These revelations underscore the imperative for benefits packages to be tailored to the individual needs of employees, ensuring that schemes yield the intended impact. But the research findings suggest that individuals are still struggling to make ends meet, this could be just the bare minimum for the majority of employees.
“The war for talent continues, and our research uncovers a blind spot for employers,’ says Chris Ronald, VP – Incentives, Rewards & Benefits, BHN. “While nearly half fear losing staff to competitors, a surprising number aren’t actively addressing the top concern for employees – financial security. It’s a paradox. We see a laser focus on work-life balance, which is important, but it seems employers are missing the bigger picture. Employers are relieved to see a slow down in the rate of wage increases but they are not off the hook. Paying a ‘fair’ salary is not enough. Employees are stressed about affording basic necessities, and offering alternative options for financial support could be a game-changer. Younger generations, especially, are frustrated with current benefit packages. This presents a tremendous opportunity. By offering targeted financial wellness programs like discounts on groceries, household furnishings and technology, or even financial coaching – resources demonstrably used by younger generations – companies can bridge this gap and secure a loyal, engaged workforce. Financial security is a powerful motivator, and employers who prioritise it will be well-positioned to attract and retain top talent.”
