Financial Well-Being Programs for Restaurants

Several months ago, MRM published our article on absence management and well-being programs. We noted that to compete for talent, the restaurant sector should consider benefits beyond traditional health and welfare offerings. This article focuses on one of the aspects of well-being, financial assistance. 

The Big Picture- it’s Complicated and Stressful

Consider these items:

Since the COVID pandemic: 

• Wages and hourly rates are up. Until the recent bite of inflation, employees had more disposable income.
• Easy access to other job options.
• There is greater concern over medical benefits.
• Government subsidies increased individual savings rates.

Subsequently:

• In 2022, inflation has become a serious issue. Restaurant sector employees are particularly impacted by the increase in fuel costs (they do not have work from home options), rent increases (owning a home is insulation against housing inflation, but rental costs have exploded) and food. 
• And stock market concerns tend to scare investors with small or moderate 401(k) balances into making poor financial decisions.

The immediate and mid-term future may then layer on additional stresses such as:

• Interest rate increases, which impact those with credit card debt.
• Inflation, which is showing little sign of significant moderation
• The growing concern of recession, which will impact the job market

What Does the Data Say? 

John Hancock, a major provider of financial services, conducts an annual report of Stress, Financial and Well-Being. Key take-aways from the report for restaurants:

• Credit card debt is the number one concern for single employees and those under age 36. 
• Emergency savings is the top concern for those with major debt or with annual earnings of less than $50,000.
• Not enough retirement savings is number one for those age 36-50 and those earning $50,000-$99,000.
• 74 percent of employees would appreciate financial well-being programs to improve their financial stress, and
• 82 percent would like to be more confident in making financial decisions.

Nearly all restaurant groups offer a retirement savings program such as a 401(k) plan to employees, however, participation isn’t very high, especially when participation and interest is sliced by age and income. A large portion of restaurant employees simply have financial issues that restrict retirement savings. A question worth considering is are we really providing a service to employees when we recommend saving in a 401(k) while they still have high interest credit card debt? Employees need and appreciate programs that help them with their overall financial concerns. For this type of holistic approach to financial well-being, employers are considering financial coaching and/or advisory services that are independent from retirement planning. 

 Comprehensive Financial Services

The best solution is a program that addresses all these needs. Building a financial plan or coping with a financial problem is an individual exercise, it’s not one size fits all. It’s important to find a provider that has the experience to promote and deliver engagement and does not have a financial stake in the outcome. 

The entry point begins with a website, and the content needs to include many modules such as:

• Managing bill payments
• College loan repayment and obtaining a degree
• Credit card debt
• Healthcare
• Retirement 

The content needs to be meaningful, and it needs to include prescriptive action plans with multiple steps. Digital content should change regularly, providing relevant material and educational tools. The information then needs to be backed up by virtual one-on-one personal coaching services. Again, the coaching can’t include any selling of products or services. Coaches should be completely independent and provide education and advice that is in the best interest of the individual employee.

Financial Well-Being Is Achievable, and Valuable 

These types of financial well-being services are available to plan sponsors with several possible payment options. In some cases, carriers will allow wellness credits to be used to pay for the program. There may also be funds available within the retirement plan known as a Plan Expense Reimbursement Account. 

Like other well-being programs, it may be difficult to accurately calculate a ROI; however, utilization data can help you quantify the success of your program. While the restaurant sector will always have a portion of the staff that participate in the “gig” economy, offering effective programs that help employees improve their financial well-beingshould mean longer tenured and more satisfied employees.