Financial Wellness Benefits: A Game Changer for Retailers’ Recruiting Challenges
A strong workforce is one of the most critical components of a successful retail business, but a tight labor market can make it challenging to recruit and retain employees. The retail industry is one of the largest employers in the U.S., but a recent survey of 50 major U.S. retailers found that 94 percent were having trouble hiring for vacant roles. In fact, 29 percent had implemented a sign-on bonus, which experts say is rare in the industry.
Retail businesses must take into account consumer behavior changes as a result of the pandemic in order to build a workforce that best meets consumer needs. McKinsey predicts a 15 percent to 30 percent growth in consumers who purchase goods online for each major retail category following the pandemic. At the same time, 57 percent of consumers surveyed by YouGov expressed excitement to return to physical stores. To address growing online and in-person consumer demand, retailers will have to develop an effective employee recruitment and retention strategy. Creative and customized employee benefit programs that prioritize holistic worker wellness offer a cost-effective way for retailers to enhance hiring and retention and boost overall productivity in this tight labor market.
Financial wellness benefits specifically, like on-demand pay and financial education resources, can help solve retailers’ key hiring and retention challenges by addressing a top concern employees face: financial stress. The majority of employees say their financial stress has increased due to the pandemic, so workers will seek out benefits that support their financial well-being. Furthermore, the Kaiser Family Foundation reports that 19 percent of low-wage workers are employed by the retail industry, indicating that retail workers are likely to be more interested in resources that can help improve their financial situation.
Partnering with an on-demand pay benefit provider, typically at no cost to the business, can give retailers the ability to offer employees access to the wages they've earned whenever they need them. Access to on-demand pay is critical to giving workers more flexibility over their money, as bills and unexpected expenses can often appear before payday. This way, they can avoid seeking out high-interest loans that inhibit their long-term financial success. While raising wages and offering signing bonuses may be challenging from a business perspective, financial wellness benefits provide alternative ways for retailers to attract workers and provide them with greater financial freedom at the same time.
Given that many financial wellness benefits, like on-demand pay, are free for employers, they also offer a cost-effective way for retailers to boost productivity. According to a PwC survey, 45 percent of employees say their finances pose a distraction at work. Providing workers access to financial wellness tools can help them navigate common challenges ranging from budgeting and saving to credit issues and beyond. Increasing the control employees have over their finances will help them better focus on their work, improving company productivity overall.
Additionally, financial wellness benefits can support holistic employee wellness and enhance the relationship between employers and their employees. PwC found 72 percent of workers would be attracted to another company that cares more about financial well-being than their current organization. In our current climate, it’s not enough for businesses to offer just offer health benefits — they must support employees holistically. Employees will ultimately remember how their employers supported them during the pandemic and after, which can impact how long they choose to remain at their workplaces. Offering on-demand pay and financial education resources is a great place to start and will show employees that the company cares about their well-being.
As the retail industry strives to meet the surge in consumer demand, financial wellness benefits serve as a solution to hiring and retention challenges by meeting both employee and employer needs. Simultaneously offering workers the means and guidance to greater financial security and improving employee satisfaction and productivity, these benefits can help retailers drive success and innovation while supporting employee wellness.
Ron Gaver is co-founder and CEO of Tapcheck, a financial wellness benefit that enables workers to access their wages before payday.