This is why NY Employers must pair wage transparency with financial wellness | Opinion
New York City continues to make headlines since enacting its wage transparency law on Nov. 1. Its intentions are noble, seeking to minimize deeply rooted income inequality in America’s largest city.
Yet in the midst of a volatile job market, implementation has gotten off to a rocky start. To more effectively recruit and retain employees, and jumpstart a new wave of generational wealth in New York, employers would be wise to pair wage transparency with financial wellness benefits.
Employers are facing a triple threat: a looming economic recession, soaring inflation, and a confusing labor situation. Not only does monthly federal data continue to show a tight labor market, but employers must also contend with “quiet quitting” as a mainstay. While some businesses are offering larger-than-usual raises and bonuses to remain competitive, most employers are not in a position to increase yearly pay or add expensive benefits.
With financial compensation not keeping pace with record-high inflation, competing for and retaining talent must now be about more than just wages. It is simply too costly, and it fails to address the core issue: employees want to feel heard, understood, and valued by their employer, not a cog in a profit-driven corporate machine.
The solution is hiding in plain sight: Employers can attract new talent, boost morale, and improve engagement by becoming true partners to their employees and investing in improving their mental, physical and financial health. This is the cultural shift needed to recruit and retain the best and brightest employees — and ensure that they are thriving.
Best-in-class financial wellness programs — helping employees maximize their compensation and benefits and plan for their unique financial goals — are more common than ever. It’s also what employees want.
According to industry research, nearly 6 in 7 employees believe that their financial well-being impacts their job satisfaction and tenure at a company — with many feeling strongly that their employer has a responsibility to not only provide competitive pay, but also holistic benefits and financial wellness tools. Some of the nation's most successful and innovative employers are figuring this out and seeing the tangible results of making financial coaching the center point of their entire benefits offering. The results are astonishing, demonstrating potential to address wealth gaps head on as well as the root causes of financial stressors that are known to lead to poor mental health.
More than ever, financial wellness benefits must serve as a leading tool for New York’s recruiters. What better way to demonstrate commitment to the success of future employees, than through an investment in their mental and financial well-being? And extending life-changing benefits hand-in-hand with an offer of employment is just the start.
Central to the success of this type of financial wellness program is ensuring that all employees, not just the recently recruited, are aware of their existing benefits and able to access them to become more mentally, physically, and financially healthy. Most Fortune 1000 companies spend hundreds of millions, if not billions of dollars per year on employee perks.
Yet the Financial Finesse Financial Wellness Think TankTM estimates that the amount spent to help employees fully understand and utilize their benefits is a mere 0.12 percent of overall benefits budgets on average. More will be needed in order to close existing benefits awareness gaps.
Human resource departments across New York City are already making huge changes to comply with the new wage transparency regulation. Adding financial wellness benefits to their toolbox — and making employees aware of their existing benefits package — will only strengthen their recruitment success and amplify the city’s goal of closing the wealth gap among Big Apple residents.
Greg Ward, CFP, is the Director of the Financial Wellness Think Tank at Financial Finesse, where he guides industry-leading research on workplace financial wellness best practices and employee financial trends.
This article originally appeared on Rockland/Westchester Journal News: NY Employers must pair wage transparency with financial wellness
