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How an Emergency Savings Account (ESA) Can Enhance Employee Benefits Packages

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By
Devin Miller
August 2, 2021

How an ESA fits in

Key takeaways:

  • Today’s employees are looking for benefits beyond salary.
  • Businesses are adding financial wellness programs to attract and keep the best talent.
  • ESAs can be an important financial wellness benefit.
  • ESAs can benefit employers by lowering the financial stress of their employees, improving retention, and increasing production.

A good employee benefits package can set companies apart when they’re hiring new talent. Today’s employees are often looking for “perks” beyond salary and vacation days. Many businesses are looking to add extra benefits, including financial wellness programs such as continuing education assistance, student loan assistance, and emergency savings accounts.

Emergency Savings Accounts (ESAs) are a desirable financial wellness benefit. What is an ESA and how does it fit in with the typical benefits package? We explain what an ESA is, how it can enhance a benefits package, and name other benefits that are worth considering.

Types of financial wellness programs

There are many different types of financial wellness programs. Some are designed to address student debt or save for retirement, while others (such as ESAs) can help employees survive a financial crisis. Let’s look at some common financial wellness benefits.

  1. ESA

ESAs give employees immediate access to emergency funds for anything from medical bills and emergency home repairs to buying a new car. ESA contributions are automatically withheld from an employee’s paycheck, much like a 401(k) plan. Unlike a 401(k), the contributions are post-tax. Employees can also withdraw funds at any time, without having to pay taxes, fees, or penalties. 

  1. Education benefits

Many adults feel stressed about money, particularly younger workers who often struggle to pay bills month-to-month. According to Value Penguin, the average student debt is $32,721 and total student debt is around $1.52 trillion. That debt weighs heavily on employees. 

Education benefits can include financial coaching/counseling, workshops, debt counseling, financial planning assistance, and student loan counseling. 

  1. Retirement plans

Retirement savings accounts have become a staple of benefits programs. Even small businesses offer 401(k)s and certain types of IRAs. Many companies also offer matching benefits, meaning the employer matches employee contributions up to a certain amount. 

  1.  Student loan assistance

Ballooning student loans result in many young adults leaving college with massive debt. This puts a strain on all areas of their finances. Many businesses now offer student loan repayment contributions including matching loan payments directly or matching retirement funding to help younger employees begin saving for the future.

  1.  Insurance benefits

Depending on the size of the business, providing insurance benefits may be required, particularly health insurance. There are other types of insurance benefits that companies may offer, including:

  • Dental/Vision
  • Life 
  • Disability 
  • Critical Illness 
  • Accident 
  • Adoption/Fertility 
  • Long-term care 
  • Pet 

The Benefits of employee financial wellness programs

Financial wellness benefits, such as ESAs, are becoming more popular for employers who are looking to attract and keep top talent. In a competitive job market, businesses are looking for any advantage during the hiring process. As a result, many are starting to offer financial wellness benefits as a way to stand out.

There are several benefits that financial wellness programs offer for employers (and employees).

Benefit 1: Lowering financial stress

Financial stress is high these days, particularly in the age of COVID-19. Millions of people lost jobs or had to live on a greatly reduced salary. Employees who experience financial stress can end up getting physically sick or facing mental health issues. They end up bringing those problems to the office, resulting in work absences and reduced productivity which affects a company’s bottom line. Financial wellness benefits can help eliminate many of these issues, which makes for a healthier office environment and more satisfied employees. 

Benefit 2: Improved employee retention

Retaining good employees is a struggle, especially among younger workers. One study by the Bureau of Labor Statistics found that typical employees stay at one job for an average of four years. Adding financial wellness benefits may help employees stay happy and engaged, making it less likely they’ll look for another job.

Benefit 3: Increased production

Happy employees tend to be more engaged and productive. This has a positive impact on a company’s bottom line, helping them remain competitive. 

Becoming an ESA partner

As you can see, there are clear benefits to offering financial wellness programs. ESAs, in particular, are like life rafts for employees that will make them feel financially secure and ready for an emergency, especially after the stress of this last year plus. 

A variety of organizations might choose to become an ESA partner, including benefits brokers, 401k providers, recordkeepers, and financial institutions. Secure makes it easy for partners to offer ESAs as an integral part of employee benefits. They are also a great way to generate revenue and sign new accounts.

ESAs can be included as part of benefits packages and sold as a key business growth strategy. Join our partner program and start referring companies today. You will be able to provide a discount for your clients. 

Contact us today to get started. We can also discuss other ways partnering with Secure can benefit you, including asset management, product integrations, and bundling services. 


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Devin Miller

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Devin Miller