Tom Holtam is a regional manager for the west region for UMB Bank, spanning Colorado and Arizona.

When operating a business in a higher cost of living area, ensuring your employees are financially secure may feel out of your hands as things like interest rates and inflation remain high. To meet this challenge, you must have a strong understanding of your metropolitan area and your current employees’ needs, while also knowing your own business and what exactly it can withstand.

Financial wellness and why it matters

Financial wellness considers a person’s financial status and its impact on their daily life and overall well-being. If your employees are spending significant time worrying about making ends meet or what they would do in the event of an emergency, they aren’t bringing their best selves to work and can weigh on their performance. This is why all employers should take the time to consider and prioritize their employees’ financial wellbeing.

According to PwC’s Annual Employee Financial Wellness Survey‡, one in five employees admits that productivity at work has been impacted by financial worries. In fact, 49% of employees who are distracted by their finances at work say they spend three or more working hours each week thinking about or dealing with issues related to their personal finances. That can add up to a significant amount of productivity loss.

With this in mind, employees are having more frequent conversations around pay and total compensation with their employers. And if employees’ needs are not being met, then they are more likely to spend time looking for new jobs, which ultimately decreases productivity even more and requires further hiring and onboarding for employers.

Fortunately, 92% of employees said there are things their employer could do to keep them in their current jobs, listing things like more-personalized offerings in their retirement plans and improving their work-life balance, according to an article in the Denver Business Journal‡ on the Franklin Templeton Voice of the American Workplace survey.

To help manage and inform conversations with your employees, start by getting up to date on the cost of living in your area. High cost of living areas and its impact on your employees’ quality of life can be hard to understand unless you have experienced it. There can be both physical and psychological repercussions to the concerns surrounding housing conditions and other expenses. If you aren’t paying attention to this as the employer, you will start to see your employees’ job satisfaction take a secondary position to concern over cost of living. So, addressing these factors (within your ability) can have a significant impact on employees. To do so, consider what your company can offer beyond salary. A full compensation package is one way to help lighten the financial load for employees. There is monetary value in offering benefits like:

  • Tuition reimbursement
  • Paid time off and sick policy
  • Maternity and paternity leave
  • Sales or other incentives
  • Parking or commuter benefits packages
  • 401(k) match and other retirement support
  • Health and wellness benefits
  • Career development
  • Hybrid or flexible work schedule to reduce commuting expenses
  • Mortgage specials – offered by some banks for things such as rate discounts, down payment assistance and eliminating private mortgage insurance
  • Discounted medical insurance – sometimes offered to employees that complete various health-related tasks throughout the year

By developing a full package of offerings, business owners will have this additional help when managing during economic ups and downs.

Banking benefits

An additional benefit an employer might want to consider is a banking benefit. Some banks offer a free program that helps both business owners and employees by offering banking benefits to users. The programs could consist of financial wellness education curriculum, webinars and events to educate and assist employees to take control of their finances. On top of these tools, banking benefit programs can offer premium banking accounts for any businesses interested in participating and businesses can offer these free services to their employees as well.

The future of employee offerings

Overall, sweeping pay changes to improve financial quality of life take time and require movement by increasing revenue and decreasing expenses to absorb additional labor costs. While salary ranges will increase, the more immediate solution is to add other benefits for your employees to reduce costs. Work with your employees to hear their individual needs and concerns so that you can do your best to help them in times of financial stress. Getting creative with how you can support your employees throughout any financial circumstance can benefit both your bottom line and your current and future employees’ overall wellbeing.

UMB personal banking solutions offer convenience and simplicity to meet all of your past, present and future financial needs. From home loans to auto financing and everything in between, see how UMB personal banking can work with you to find the right products for your life and lifestyle.

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