Healthcare workers have been pushed to the brink during COVID-19, and that stress is taking a physical, emotional, and now financial toll.
Forty-six percent of healthcare employees say their financial condition has worsened during the pandemic, according to TIAA Institute research. Among many, financial confidence, including confidence in retirement saving, has plummeted.
While dealing with front-line care pressures, many nurses, in particular, also are juggling educational debt. Such stresses contributed to a nearly 19% turnover among staff registered nurses in 2020, according to the 2021 NSI National Health Care Retention and RN Staffing Report.
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Many doctors are rethinking retirement strategies, with those in mid- and late-career now more likely to consider early retirement, compared with the pre-pandemic period, when many said they intended to work well into their 70s or later, according to TIAA research.
For many workers, financial stress is a daily burden. Black and Latinx individuals are widely represented in the healthcare workforce, with many in those communities indicating that during the pandemic, they’ve had to use extra money for immediate financial needs, rather than increasing retirement savings.
More employers are seeking ways to help — and in the process, better attract and retain — these valued employees. Perks like signing bonuses, career coaching and leadership development opportunities can certainly make a difference. But one area that often escapes healthcare administrators’ focus is the employee retirement plan.
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Sponsors can give their plan new power by rethinking its purpose, and viewing it not just as a vehicle for retirement savings and income, but as the centerpiece of a well-rounded, highly inclusive offering focused on overall financial well-being.
When designed with that purpose in mind, the plan can help calm financial and retirement preparation worries and better address the needs of an increasingly multidimensional workforce, while also helping to reverse pandemic fueled turnover rates, keep existing employees and attract new ones.
There are several strategies worth considering for strengthening your plan’s impact on the overall financial well-being of a diverse workforce, while also reinforcing its focus on critical retirement savings and income.
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Make plan participation simple and automatic: Meet employees, especially ones experiencing financial difficulty, where they are by using features such as auto enroll, auto increase of contributions and appropriate default investments. This will help to overcome inertia and gradually improve employees’ financial security. These powerful tools make it simple to get started in the plan, boost savings and invest in a prudent, diversified option.
Build in secure retirement income: In the highly competitive race for talent, sponsors can make guaranteed retirement-long income a distinguishing and meaningful plan benefit by offering employees the opportunity for income they can’t outlive. In TIAA’s most-recent Retirement Insights Survey, about 70% of participants said they would consider a program offering ways of obtaining guaranteed lifetime income to be very or extremely valuable. Fifty-one percent said they would be very or extremely interested in such a solution.
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Further, more than 70% of workers say they would choose to work for, or stay with, a company that offers access to guaranteed lifetime income in retirement over one that does not, according to TIAA’s 2021 Lifetime Income Survey. In the same survey, employees said having guaranteed lifetime income offers a sense of financial security (73%), provides spending flexibility and certainty around essential expenses (72%), makes knowing how much to save for retirement easier (68%), and creates security around market volatility (66%).
Give employees comprehensive support for financial health: In our research, 70% of employees said they want their employers’ help in feeling healthy and financially secure. What’s more, they are interested in workplace access to almost all types of financial education and resources, pre-retirement planning, budgeting tools, financial wellness coaching, and much more. In addition to the educational materials, employees crave fund specific investment and savings advice, not just guidance.
Show each employee their own, unique path to retirement: Workers definitely want help, but specific needs will vary for different generations, different professions, and across income lines and gender. To support a multidimensional workforce, sponsors need to understand deeply how participants are uniquely experiencing financial security and retirement planning and readiness, and then respond with targeted and robust education offerings, delivery channels, readiness tools and investment advice.
A well designed retirement plan won’t fix all the workforce challenges facing the healthcare industry, but rethinking your plan is a good start. This can be your secret weapon in improving the recruitment and retention of great employees, while offering a valuable lifeline to undeniably essential workers.
