Most traditional financial wellness benefits, like a 401(k) plan, financial planning, and financial coaching, are built for people who can afford to think about the future.
But the Financial Health Network’s latest data shows that 70% of U.S. households are financially vulnerable or coping. They’re not thinking about financial goals decades away. They’re thinking about covering what’s due this week.
On Episode 772 of the Earn & Invest podcast, “Should Your Employer Provide Financial Care?”, host Jordan Grumet asked Brightside’s Kristy Talorico, VP of Employer Partnerships, directly: Is the workplace even a fitting place to look for financial help?
“I think that in today’s modern society, where there are problems of prevalence that come in many different categories — financial, mental, physical — the workplace is taking responsibility in ways that it hadn’t before,” Talorico said. “We all spend a third, and in some cases much more, of our lives at work. So it’s a natural fit for many.”
The warning signs of employee financial stress traditional benefits can’t help
401(k) hardship withdrawals climbing. An employee sleeping in the company parking lot. Food banks that empty out fast and get quietly restocked. Talorico called these the visible symptoms of an invisible problem.
But traditional financial wellness benefits aren’t built for the people showing these signs, leaving benefits leaders in a tough position.
“I think that the traditional financial benefit of any given corporation is missing two-thirds of their employees at any given point in time in this country,” said Talorico.
She also pointed out that the underlying driver of financial stress and financial insecurity often has little to do with money. “It has to do with behavior. It has to do with systems of prejudice. It has to do with behavioral issues, healthcare,” Talorico said. “There’s a million reasons why somebody just can’t make their paycheck stretch.”
What does employee financial stress cost employers?
Talorico pointed to a WTW study estimating financial insecurity costs employers $3,000–$4,000 per employee, per year, showing up in absenteeism, safety incidents, and unwanted attrition.
She also referenced a recent Mayo Clinic study that found financial strain carries cardiovascular risk that’s on par with smoking, driven by sustained elevated cortisol.
But the numbers are really about the people behind them, and as Talorico put it, an organization doesn’t thrive without its people.
“The people that run a hospital are not necessarily doctors. It’s everyone else, everyone who’s not a doctor, that is keeping the lights on and keeping the environment clean and doing everything that they have to do for these patients.”
Every HR leader she’s talked to comes to the same realization. Helping employees reduce their financial stress means people want to be there, do their best work, and carry out the company’s mission – which saves the organization money along the way.
Why Financial Care beats a one-time fix
Talorico explained that part of what makes Brightside Financial Care different from a traditional financial wellness benefit is what happens after someone asks for help.
For example, she shared that when an employee came to Brightside saying she needed an $1,800 loan, her Brightside Financial Assistant asked why. Not to be combative or difficult. But to understand what the employee was facing, so she could find options that supported the employee’s immediate needs and broader financial situation.
While Brightside Financial Assistants are trained to handle the full financial continuum — debt, credit, savings, benefits navigation, planning — and some hold a CERTIFIED FINANCIAL PLANNER® designation, Talorico explained that many also bring backgrounds in social work and therapy.
That combination helps Financial Assistants build and earn trust with the clients they serve, and it let the Financial Assistant in this case get past the $1,800 loan request to learn what the employee was facing.
What root-cause support looked like
The employee shared that she had left an abusive relationship and had nowhere safe to sleep that night. Her Financial Assistant got her into a shelter and connected her with a local organization for food.
She also found an EAP therapy benefit that was already sitting inside the employee’s benefits package, so she could get the free mental and emotional support she needed. And instead of the $1,800 loan, which would have added to the employee’s stress, her Financial Assistant found and helped her apply for an employer hardship grant. It covered the full amount she needed to secure safe, permanent housing, without requiring that she take on debt.
Weeks later, her Financial Assistant reached back out to the employee to see how she was doing, and because she’d noticed the employee also had $40,000 in credit card debt. She asked the employee if she wanted help with it.
The employee confirmed that she did, and she’s now in a debt management plan that will save her more than $38,000 in interest and fees.
Talorico also explained that because Brightside doesn’t profit from employees’ choices, Financial Assistants are always working in the employee’s best interest.
What it all means for your employee benefits strategy
“I love those really colorful conversations with HR organizations who wonder, ‘Is this really our job? Is this supposed to be our job?” Talorico said.
When employers look at the realities and the opportunity in front of them, they usually land in the same place: a clearer sense of what they can do for their people, and how much it can change for their workforce.
To see how Brightside Financial Care can support your team, schedule a demo with ours.