The surge in the cost of living is deeply impacting both workers and businesses, as the escalating prices add to financial strain and psychological stress. Adding to this challenge, an alarming 60% of U.S. workers report living paycheck to paycheck, with with nearly three-quarters reporting increasing stress and strain around finances. In fact, money is the most cited factor that has a negative impact on U.S. adults’ mental health.
Mental health and well-being are significantly impacted by financial worries, and without effective support, languishing well-being dampens a person’s confidence, productivity, and overall engagement in the workplace. The constant stress and strain of living paycheck to paycheck contributes to increased anxiety, depression, and even burnout. As financial concerns consume their thoughts, employees may find it difficult to concentrate and perform at their best, leading to a decline in productivity.
Furthermore, the negative impact of financial worries extends beyond individual employees. Businesses may experience higher rates of absenteeism and presenteeism among those who are struggling financially. Absenteeism can increase as employees take time off work because of physical or mental health issues related to their financial stress, while presenteeism occurs when employees come to work but are not fully engaged or productive because of energy lost to their financial concerns. Clearly these hurt performance, productivity, and our potential to build a strong and healthy employee experience and culture. This is shown in our key results map, or Egg Model of Experience and Results, below.
The rise in the cost of living also directs employee, and job applicant, attention to benefits and what the job offers overall. At the same time, there's increased financial strain on leadership and organizations to make each investment in benefits and the employee experience count.
How Organizations Can Realistically Support Employee Well-Being and Engagement
We've partnered with several organizations to take a listening and data-first approach to building their benefits in ways that drive results: specifically, employee engagement and well-being. By supporting well-being and commitment with a holistic approach to employee benefits, we understand the full picture and know what is needed to support key results like performance, sales growth, retention, and strong and healthy employment and overall brand.
The Diverse Needs Gap
Historically, benefit programs were constructed with higher-income and college-educated professionals in mind. This means there's a pressing need for benefits that are inclusive and equitable for all professions and backgrounds, aspects often discussed under the umbrella of diversity, equity, inclusion, and belonging (DEIB). With the companies we've supported, we sought to understand their perceptions of existing and potential benefits through listening methods like surveys and small group discussions. When taking this approach, perceptions of benefits are statistically linked to critical intentions and behaviors, like intentions to stay, satisfaction, and overall employee engagement and retention. This gives leaders the ability to know how specific benefits are connected to key outcomes. In addition, it's also possible to understand how dimensions of diversity are linked to the value of specific benefits.
The Business Case
Our data from 2022 suggests that a powerful link between engagement and well-being benefits, physical or mental. In fact, employees who shared the strongest engagement and reported the greatest likelihood of staying and growing with the company were most likely to value existing well-being and wellness benefits or find them compelling if they were offered.
1. Redefining Benefits
When we consider the challenge of the rising cost of living, and sustaining positive employee well-being, we might be redefining what employee benefits look like within your organization. Seeking to understand how benefits are viewed may lead to the ability to reduce or eliminate some that are not used, lack inclusivity (e.g., a gym membership discount at a location or price-point that's inaccessible), or are not viewed as meaningful. Employee feedback and listening are critical in reengineering benefits that are both inclusive and effective. Less traditional benefits that we've seen drive results that might be valuable to consider:
- Stipends for continuous learning; subscriptions to learning portals
- Sabbaticals (even for frontline employees, like restaurant managers)
- Online mental health counseling
- Financial incentives, like profit-sharing, but focused on targeted areas directly influenced by employee and team performance (like a store, restaurant, or team's year-over-year revenue)
- Volunteer opportunities, support and flexibility for volunteering, and even matching donations
- Memberships to industry-related groups; sponsorship to conferences, or in the case of some organizations, internal meetings and conferences
- Monthly off-site team events (game nights, entertainment venue visits, hikes), sponsored by the company
- Friendly competitions and incentives for reaching specific targets.
Importantly, gathering employee feedback on potential benefits and programs ensures benefits have the highest probability of meeting employee needs and supporting their overall well-being and engagement.
2. Competitive Pay
How do employees view their financial compensation? While the cardinal rule of surveys and feedback is not to ask about something you can't change, we've included questions about satisfaction with financial compensation in surveys. This allows you to know at scale and by job group if financial compensation is meeting employee needs, and how that is statistically linked to commitment and intentions to stay and perform. Long-term budgeting, planning, and salary surveys can be initiated if this is a cause for concern; or, if not, leadership can confidently move forward.
Providing employees with a free or reduced subscription to a financial wellness service is another opportunity to support well-being. A wealth of programs are available to strengthen financial literacy and provide support with managing unexpected costs and budgeting.
3. Invest in Talent and Reward for Skills and Growth
When we think about our compensation, a lot can seem out of our control. Upskilling programs can open doors to higher-paying roles for your employees, making them feel competent, confident, and valued. Seeking employee feedback on which skills they are eager to strengthen can be one part of a listening-first strategy. In addition, leaders can provide employees with roadmaps for upskilling delivering clarity, and connecting skills-based learning with your strategy and projected growth. Guidance on how upskilling will influence their trajectory supports perceptions of fairness and transparency – positively influencing not only well-being but also intentions to stay and grow.
4. Embrace Flexible Work Solutions
Flexibility is a strategic imperative for fostering well-being, and an essential component of a robust diversity and inclusion strategy.
A flexible work environment, which can include remote work options, flexible hours, compressed workweeks, or even job sharing, has many rewards for organizations that extend beyond employee convenience.
Firstly, flexibility contributes significantly to employee well-being. It alleviates stressors across diverse employee lifestyles. While some employees may be raising children, others may have invisible disabilities or health conditions, or hobbies and passions that are supported with flexibility. By allowing employees to work in patterns that suit their natural rhythms, joys, and familial obligations, we demonstrate an investment in their uniqueness and well-being. This emotional equity often translates into increased engagement, lower turnover, and heightened productivity—elements critical to the sustained success of any business.
Secondly, a flexible work environment is inherently inclusive. Traditional 9-to-5 workdays often disproportionately disadvantage specific groups, such as parents, caregivers, or those with chronic health conditions. Flexibility enables a broader range of individuals to participate in the workforce, allowing organizations to tap into a diverse pool of talent that they might otherwise miss. Inclusion in this context isn't just a buzzword but a business advantage, bringing with it varied perspectives, skills, and experiences that enrich corporate culture and decision-making.
By embracing flexibility, whether you're a workforce of largely knowledge workers or customer-facing, you're not just adding another perk to their benefits package. You are making a powerful statement that they understand and appreciate the multi-dimensionality of their workforce. Flexibility is not just about where and when work gets done; it's about creating an environment where diverse talent thrives and well-being is a priority.
5. Supporting the whole person
The past several years led to self-discovery and reimagining of what life can be for many. Tech-enabled programs can make supporting mental and physical well-being even easier, and cost-effective, for your workforce.
Wellness programs come in various shapes and sizes, from virtual fitness classes and meditation sessions to online workshops on nutrition, stress management, and mental resilience. The virtual format allows employees to access these resources at their convenience, thus removing logistical barriers that might otherwise deter participation. It democratizes wellness, making it accessible to employees regardless of location—be it on-site, remote, or international.
Moreover, these virtual programs can be tailored to cater to a diverse workforce. Employers can offer a wide range of activities and educational content that addresses the unique health and wellness needs of different demographic groups. This customized approach not only shows that the company respects individual preferences but also enhances the inclusivity of your workplace.
Our co-founder, Tom DeCotiis, is famous for saying that people never tire of seeing their artwork put up on the refrigerator. He meant this as a metaphor, of course, for the importance of recognition; and also, human connection. Building a program of benefits for the whole person means considering how we're connected to and supported by others. This could mean incorporating mentorship programs or creating opportunities for peers to connect for both professional and personal connection.
7. "We have that here?"
We also helped our clients understand what benefits were not known about or well-understood. With our surveys and other methods, we asked both about value and knowledge. From this, we've equipped leaders with knowledge not only about which benefits are most valued but also which are misunderstood (or not known about at all).
Action planning and debrief sessions, starting with senior leaders and moving outward, also provide a prime opportunity to tackle employee misconceptions about your ways of working, benefits, and coming attractions around benefits in the future. Department and area leaders can further reiterate specifics like the requirements for referral bonuses, future development programs, and upcoming changes to benefits overall.
We often lead ongoing always-on measurement of the employee experience and engagement providing another opportunity to gauge attraction and awareness of benefit programs.
Creating a Lasting Impact on Employee Well-Being and Engagement
An investment in employee well-being is not just a cost but a strategic asset. A data-driven approach can yield actionable insights into what truly matters for your employees, improving not only their well-being but also their long-term loyalty and productivity.
When offering employee benefits, it is not enough to simply provide a list of options. The true key to success lies in creating meaningful benefits that are tailored to the specific needs of your workforce. This can only be achieved through listening and analyzing relevant data to inform your decision-making process.
By taking a listen-first approach, as we've done with our clients, we gain valuable insights into the challenges and concerns facing your employees. This empowers you to design programs that address these issues head-on, ensuring they have a tangible impact on their well-being. Whether it's financial support, mental health resources, or professional development opportunities, every benefit should be carefully chosen to align with the actual needs of your workforce.
In addition, it is crucial to approach benefit design with a lens of inclusivity and equity. These programs are a powerful means to create a sense of belonging. This means considering the diverse backgrounds, experiences, and circumstances of your employees. Benefits should be accessible and relevant to individuals from all walks of life, regardless of their income level, education, or background.
By prioritizing inclusivity and equity, you not only create a more supportive and inclusive work environment but also demonstrate your commitment to valuing every member of your team. This fosters a sense of belonging and empowerment, which in turn leads to higher levels of engagement and productivity.
Ultimately, the success of your organization is directly tied to the well-being of your employees. By offering meaningful benefits that are informed by data, designed to meet actual employee needs, and implemented with inclusivity and equity in mind, you are investing in the long-term success and happiness of your most valuable asset—your people.