If you are looking for the answer on how to help employees save for emergencies, help recruit and retain motivated workers, and reduce withdrawals and loans from retirement savings, turn to the most basic and yet elegant of strategies – saving automatically through split deposit.
Employers – picture this.
An hourly employee comes to your Human Resource Department asking about a payroll advance because of an unexpected expense. Using your company’s policy, HR staff reviews details with the employee, acquires the necessary signatures, calculates taxes and deductions needed to be withdrawn and finalizes the agreement with the employee. A lot of extra work.
Now picture this.
A different hourly employee facing a similar unexpected expense is able to withdraw money from an emergency savings account that they funded through split deposit. This employee doesn’t have to ask for a pay advance because they set aside cash from every paycheck into their own savings account.
If you are looking for the answer on how to help employees save for emergencies, help recruit and retain motivated workers, and reduce withdrawals and loans from retirement savings, turn to the most basic and yet elegant of strategies – saving automatically through split deposit.
OPPORTUNITY THROUGH SIMPLICITY
Simplicity is the key here. Encouraging employees to save automatically through split deposit requires little in terms of setup time and costs because it is built on your direct deposit payroll system. Using split deposit to encourage automatic savings among employees does not involve creating complicated new programs, adhering to nondiscrimination rules, establishing new internal systems, or funding incentivized saving accounts.
For employees, this system of automatically splitting every paycheck into two accounts – a transactional or checking account and a savings account –supports the basic financial tenet of paying yourself first. It also enables employees to save whatever amount they are comfortable with, no matter how small.
And it works! Among employees who responded to survey questions about using split deposit, 95 percent reported that split deposit helped them save more easily and 90 percent said that split deposit has helped them feel more confident about saving money.
OVERCOMING BARRIERS
Hiring Challenges
Employers of all sizes and across all industries frequently report that creating workplace saving programs is an important goal. The reality, however, is that many businesses are facing hiring challenges in the current labor market and don’t have the bandwidth to focus on starting a workplace savings program. One way to help overcome hiring and retention challenges is to offer enhanced employee benefits including financial wellness programs. This is where split deposit plays a role. Simply by talking about split deposit with prospective and new employees you demonstrate your commitment to your staff’s financial wellbeing. And you set your organization apart from others.
Low Employee Participation
It’s also not uncommon for employers to report low levels of participation in financial wellness programs, some of which are expensive and time consuming to administer. And this is even the case when employees express interest in such programs.
Sound familiar?
If so, a simple answer may be to tell your employees that when they save through their paycheck with split deposit they have complete control over how much they save and when and how they access the money.
The incorporation of split deposit communication into your benefits program is a simple way to let your employees know you are committed to supporting their financial wellbeing. Whether they are saving for that next emergency, a car down payment, to pay off credit card debt or simply to have extra cash on hand for when an unplanned opportunity arises, you’ll help build financial resilience, not to mention good will, among your staff.
America Saves is ready to support you. Go to SplittoSave.org to sign up for access to the free online program designed to make split deposit a part of your organization’s recruitment, retention and benefits strategies.
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.
