It’s a hiring manager's or business owner’s worst nightmare: you’ve just completed a fantastic interview with a wonderful candidate. They’re resume checks all the experience boxes, and you’ve just spent the past hour conducting an outstanding interview—they’re a shoo-in. But, just before they walk out of the boardroom, they turn to you and say, “Oh yeah, I forgot to ask: what kind of benefits do you offer?” The smile on your face slowly warps into a sad, defeated frown. Why? Because you know your benefits package does not meet the demands of the financial services industry. You’ve tried to remedy it, but, unfortunately, creating a great benefits package is easier said than done.
If this sounds familiar, don’t worry: you’re not alone. At Payday HCM, we’ve received plenty of somber phone calls from clients, likely directly following a scenario that played out almost identically to the one described above, what kinds of steps they can take to improve their benefits package and where they should begin. It’s a very good question, but it can be a hard one to find the right answer to.
That’s why, in this article, we’ll be going over the three essential benefits every financial services business—from credit unions and banks to financial advisors and 401(k) service providers—should offer to their employees. The three benefits we’ll be discussing are:
- Health Benefits for Financial Services
- Earned Wage Access (EWA)
- Paid Time Off (PTO) Benefits for Financial Services
For each of these, we’ll go over the kinds of options available to businesses when it comes to these benefits, as well as the kinds of advantages that come with offering them in a benefits package.
1. Health Benefits for Financial Services
A good benefits package typically begins and ends with health benefits, whether that’s a traditional employer-sponsored health insurance plan or another affordable alternative.
Employer-Sponsored Health Insurance Plans
When people think of benefits, an employer-sponsored health insurance plan is typically the first thing that comes to mind. This is no different in the financial services industry: whether you’re a credit union or an accounting firm, including group health insurance coverage in your employee benefits package is a great first step to offering truly comprehensive employee benefits.
With that said, there are several different approaches a business can take when it comes to offering its employees health insurance. Whether you opt for a fully-insured, self-funded, or level-funded insurance plan, your financial services business has a number of options available when it comes to employer-sponsored health insurance plans.
Additional Health Benefits for Financial Services
Of course, a traditional group health insurance plan isn’t going to work for every single business, especially in the financial services industry, where the needs of a bank are different from the needs of a financial advisor. Flexible spending accounts (FSAs), QSEHRA plans, and ICHRA plans can all be great alternative options.
A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) allows employers to reimburse their employees for qualifying medical expenses, like insurance premiums, prescription drugs, preventive care, or mental health services.
An Individual Coverage Health Reimbursement Arrangement (ICHRA) functions virtually identically to a QSEHRA, with employees finding an individual health plan through the Health Plan Marketplace and then being reimbursed for the qualifying expenses. In both cases, employees are reimbursed by their employer for health-related expenses.
2. Earned Wage Access (EWA)
Next up: earned wage access (EWA) or wages on demand, a new way to pay that empowers employees and bolsters benefits packages.
What Is Wages On Demand?
According to the Consumer Financial Protection Bureau, almost 37 percent of households report that they could not cover their expenses for longer than a month in the situation of loss of income. As such, job seekers in the financial services industry will be looking for employers who can help offer solutions to this problem: enter earned wage access (EWA).
EWA, sometimes referred to as wages on demand, lets employees access a portion of their check before the scheduled payday. This can be a great way to help employees bridge the gap between paychecks, especially in cases where unexpected expenses come up. It also gives employees more control over how they receive their paychecks, ultimately empowering them to get paid on their terms.
How Does EWA Work?
While EWA or wages on demand is a benefit offered to employees by an employer, businesses will typically need to partner with a third-party service provider—Payactiv or DailyPay are popular examples—in order to offer EWA to its employees. Employees would sign up for EWA through the respective provider.
Employees could then go into the app and request a portion (typically capped at about half of their paycheck) of their check early. In some cases, transfer fees may apply depending on the speed of the transfer. These fees will be deducted from the requested amount. The advance amount would then be deducted from the final paycheck, which would be received on the normal date.
3. Paid Time Off (PTO) Benefits for Financial Services
Another benefits package staple, financial services businesses can help retain and attract top talent with a solid paid time off (PTO) policy.
Including PTO In Your Benefits Package
While including paid time off (PTO) may seem like a no-brainer in terms of benefits packages, there is more to consider here than just simply giving employees some number of hours of PTO. According to the Pew Research Center, only about 49 percent of employees are satisfied with the benefits offered by their current employer—a good PTO policy is certainly an important factor here.
There are a few different options when it comes to how employers can structure their paid time off policy, including:
- Banked PTO: a fixed number of hours offered to employees for use throughout the year.
- Earned PTO: PTO hours are accrued with each check, typically capped at a yearly amount.
- Unlimited PTO: employees are allotted an unlimited number of paid time off hours pending approval of time off requests from management.
While banked and earned PTO policies are still used and have their own benefits, unlimited PTO is slowly becoming more and more popular among employers and, especially, employees.
What Makes a Good Time-Off Policy?
For an industry like financial services, employees will be looking for employers whose time-off policy empowers them to take the time off they need, when they need it. This means that, for employers building out a benefits package, you’ll want to look beyond just paid time off at things like sick leave, family and medical leave, and other forms of time off.
Employers can opt to create a combined leave policy, essentially taking the different forms of leave and putting them all into one. This does increase flexibility for the employees, but it could result in employees taking out less sick leave (for fear of using up all of their allotted leave). Employers can also opt to keep their forms of time off separate, reducing flexibility for employees but leaving room for more options for employers.
Empower Your Employees With Better Benefits
Nobody likes bad benefits. Whether it’s ensuring the needs of your current employees are taken care of or wanting to attract new top talent to your organization, a good benefits package remains a crucial component of both employee retention and hiring. This is especially true in the financial services industry, where things like health insurance, paid time off, and earned wage access can mean the difference between a candidate choosing to work for your business or another organization. Luckily, with the information provided in this article, you’ll have the knowledge you need to take your business’s benefits package to the next level.
Of course, actually selecting which benefits you’ll include in your benefits package is only half the battle. Part of knowing which benefits to include in your benefits package is knowing what benefits your business can offer. Not only that, but you also need to know which providers you’re able to work with and, perhaps most importantly, how much it all might cost. Finding all of this information can take up a lot of time. Luckily, partnering with the right benefits broker can help you not only save time and money, but also ensure your benefits package includes the benefits that will actually benefit your employees. Check out our article on the difference between good and great benefits brokers to discover how you can find your perfect benefits partner.
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