Help your workforce save
Savings are critical to a person’s financial well-being. There are several strategies you can implement in the workplace to encourage people to build savings.
A lack of short-term savings causes financial stress and can result in significant financial hardship when the unexpected happens. Without a cash cushion, people are less able to save for education, homeownership, retirement, and other long-term goals.
How to build saving into the workplace
Low-cost bank or credit union accounts
If you know of low-cost bank or credit union accounts in your area, share this information with your workforce. Help them shop for accounts that have low or no monthly fees and low or no minimum balances.
Split paychecks and automated savings
Cut down on hassle and help your workers save automatically. Allow them to split their paychecks, so they can put a portion of their pay in a checking account and a portion in a savings account. If this is an option you already offer, help more people take advantage of it:
- Remind workers periodically about the availability of splitting paychecks and the benefits.
- Let workers precommit to save, by directing a part of an upcoming raise or bonus to a savings account.
Incentives and motivation
Create a reward system that reflects your workplace culture. Even informal rewards and recognition can be as effective as financial incentives and prizes.
- Set up a program that encourages participation, like having a buddy system to help people sign up to save, or having a contest among work groups.
- Contributing matched savings amounts or a bonus for opening an account can help reinforce the motivation to save.
Retirement plan enhancements
For employees who are eligible for your retirement plan, consider enhancements that can help them build long-term and short-term savings.
You can consider working with your provider to enroll new hires automatically in the retirement plan (they can still opt out if they want) at a specified contribution rate, like 3% of pay.
You can consider working with your provider so at a specified time of the year, like after employees receive raises, their retirement plan contributions automatically increase by 1% of pay.
Short-term savings and other innovations
You can consider working with your provider to add other ways to save—for example, by allowing employees to save up to a specified amount in a short-term savings account, and then additional amounts are allocated to retirement investments.
Financial education and coaching
While you're talking about saving, take the opportunity to introduce broader financial education and coaching help. Connect with local organizations that provide counseling, coaching, workshops, and other activities. Your public library may be able to help refer you to these organizations.