Years of COVID-19 upheaval, employment uncertainty, and inflation have strained many workers and their finances. Many workers saw their savings, retirement timelines, and other tentpoles of financial well-being change radically or vanish when they lost their jobs or dealt with long-term underemployment during the pandemic. Even in the post-pandemic world, many workers report severe financial strain, reducing the amount they can save or putting them into debt, creating a downward pressure on mobility and stability. Only 42% of workers are optimistic about their finances, and 67% worry that prices are accelerating beyond what they can pay at their current salary level.
This has major impacts on businesses, government agencies, and nonprofits as well. The instability can lead to negative outcomes like high staff turnover, customer or donor churn, and inconsistent funding. It can also put a significant strain on morale, as more and more employees experience financial stress they may not feel equipped to deal with. Very few employees are likely to stay in a position where they feel they are just “staying afloat”, where their entire paycheck is going towards paying off debt and bills and none of it is being saved.
Nonprofits like yours often struggle to find and maintain a talented team, which makes this period of financial stress all the more difficult. However, you can make efforts to help out your team, assisting them with financial literacy, taxes, healthcare savings options, and finding ways to help them make ends meet more efficiently. 76% of employees feel more attracted and loyal to employers who show that they care, making this strategy essential for your employee recruitment and retention goals. Here are some ways you can assist your employees with their finances and help them plan ahead:
Find out what they need
One of the benefits of nonprofits is the sense of a collective mission, which creates a community and sense of trust that is sometimes lacking in other sectors. This can be very useful when gathering information about what your employees want and need. Whether you plan to do something highly formal and overt like circulating a survey or something more informal, having information about what kind of financial help or guidance your team wants is a great way to maximize impact while also showing them you are invested in them. Encouraging managers to share common points of stress they hear about with you is a good way to gather this information, if you don’t want to go with something direct such as a survey or meeting.
Educate your team
Even common benefits that companies provide are often underused or ignored by employees. 40% of employees say they do not understand how to take advantage of benefits, meaning education is essential for building up employee investment and morale. This means providing clear documentation of these benefits to each employee during onboarding, making those same documents available at any time, and backing this up with educational seminars or Lunch and Learns about the value of using these benefits.
A major component of this education is also awareness — employees may not be aware of grants for education or professional training, financial assistance programs, or other resources. Putting together a physical or digital resource list relevant to your employee’s career track can help them take advantage of these resources, improve their own skills, and attain a better financial situation.
Offer critical resources
There are several resources you can offer employees in addition to their salary and healthcare benefits which can help them plan for medical emergencies or other costly issues and prepare for retirement:
- Matched 401k plans are like a personal pension account available to employers who do not already offer a pension plan of their own or via a collective bargaining agreement. Employees can make a contribution tax-free if you use a Roth 401k. These accounts are designed to make it easier for employees to save for retirement and to get help from their employers as they do it, which encourages savings.
- Health Savings Accounts (HSA) are a type of health plan that allows your employees to set aside untaxed money towards eligible healthcare issues that you can then use the saved money to pay for. It pairs with a health plan which typically has a higher deductible than other health plans. However, HSAs are fairly complex and you should make sure your team is given as much information as possible before they choose to go with one, as they aren’t necessarily ideal for every person’s situation.
- Educational resources, such as resources that can help your staff manage debt, start a mutual fund, or help them get a maximum refund on their taxes can be a great way to help boost morale and productivity. If you have the resources and know an organization or professional who can help, you can even organize voluntary meetings with an accountant or tax professional who can help your employees file and manage their finances, or at the very least learn what their options are.
- Mental health resources, offered via an Employee Assistance Program (EAP), is another way to help your employees cope with the stress of an uncertain financial landscape and show that you care for and are invested in their wellbeing. The stress caused by financial issues can be highly detrimental to an employee’s productivity and may cause them to burn out at work or move on. Mental health resources, paired with the educational support and financial tools provided by the programs above, could help your employees see a seemingly insurmountable financial issue as something they can manage and get through.
We can help you identify key resources to help your team plan for the future
Our goal at 501(c) Services is to help leaders like you ensure that you are bringing every resource you have to bear when it comes to supporting your team and your mission. Our collective decades of experience in the nonprofit space means we are well-equipped to help you find financial support for your goals. If you’d like to learn more about how we can help, reach out to us.
501(c) Services has more than 40 years of experience helping nonprofits with unemployment outsourcing, reimbursing, and HR services. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy, and we are committed to providing our clients with customized plans that fit their needs.
Contact us today to see if your organization could benefit from our services.
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The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.