How Small Businesses Can Lure Employees Back Without Wage Hikes
It’s hard to fathom but almost 69 million people quit their jobs in the U.S. last year. U.S. payrolls are almost 3 million lower today than in February 2020, just before the start of the Covid-19 crisis. In an on-air interview with 60 Minutes, Karen Kimbrough, Chief Economist at LinkedIn, noted, “The social contract of work is being rewritten, and right now the workers are holding the pen.” To put a finer point on Ms. Kimbrough’s observation, recently, the Federal Reserve Bank of Atlanta released a study that wage growth alone is not likely to get Millennials and Generation X to return to the workforce. Why? Because, compared to Baby Boomers, these two groups are less responsive to wage changes.
“These differences are not good news for employers trying to coax workers back into the labor market during a robust pandemic recovery,” Atlanta Fed economist Julie Hotchkiss shared in her recent research. “Employers will likely have to also resort to non-wage incentives to entice workers to fill their open jobs.”
The report’s conclusion? “Employers will have to dig deeper into their list of incentives (and not just their wallets) to entice workers back to the labor market— especially employers trying to fill jobs requiring less education.”
Today, nearly 63 million Americans don’t have access to or participate in employer-sponsored retirement savings plans, especially part-time workers and smaller firms’ employees. When workers have access to automatic payroll-deduction-based retirement savings programs, they're 15 times more likely to save. And according to the Aspen Institute, employees are 18 times more likely to participate when employers offer auto-enrollment to these retirement savings plans. PwC research found one primary reason for the lack of employer-sponsored retirement plans is their expense.
Employers’ Investment in Benefits Haven’t Delivered Desired Outcomes
Employers supporting financial wellness programs that include traditional and emerging benefits can help employees manage short-term emergencies and long-term retirement savings. Metlife’s 2019 annual report on employee benefits trends found employees' satisfaction with their benefits packages is declining. Better benefits are the third-highest request — behind salary and a positive work environment.
Employee turnover, absenteeism, and job distraction are consequences of financially stressed employees. This set of employees is also 2.2 times more likely to seek employment elsewhere. The lost productivity, combined with increased turnover costs, and other factors related to poor financial wellness, account for about 11% to 14% of an employer’s payroll expense.
Xiggit is the first company to help small employers ease employees’ financial stress. Xiggit disrupts the benefits market, delivering benefits specifically built for hourly workers. The company’s entry into the SMB market represents a new alternative to inadequate piecemeal solutions or exorbitant bundled benefits that drive away employers from offering workers any benefits. Xiggit provides curated benefits that are 'individual' but packaged for the millions of small business employers who don’t offer any employee benefits -- because they can’t afford them. Xiggit’s vision is to reinvent access to health, retirement savings, and other savings benefits to help employees, hourly, and frontline workers materially improve their financial outcomes.