Attracting and Retaining Talent - Carolinas Cash …...Attracting and Retaining Talent How financial wellness programs can provide a competitive edge May 20, 2019 [HOST]\爀䠀攀氀氀漀

$Page 1: Attracting and Retaining Talent - Carolinas Cash …...Attracting and Retaining Talent How financial wellness programs can provide a competitive edge May 20, 2019 [HOST]\爀䠀攀氀氀漀$
Attracting and Retaining TalentHow financial wellness programs can provide a competitive edge

May 20, 2019

Presenter

Presentation Notes

[HOST] Hello, my name is [INSERT NAME(S)], [INSERT TITLE(S)] with Bank of America Merrill Lynch, and I’ll be your host today. I’d like to start by thanking you for joining us. We really appreciate your taking the time to be with us here.� Today’s session is about Attracting and Retaining Talent: How financial wellness programs can provide a competitive edge. The session will begin with a brief presentation, followed later by a panel discussion. We’ve brought in some well-respected and knowledgeable [local/national] leaders, including [list speakers and titles].� During both the presentation and the panel discussion, we’re going to talk about how benefits, particularly financial wellness benefits, have become a key component in the “war for talent,” and how you, as employers, may be able to gain a competitive advantage by offering benefits tailored to your employees’ needs.� So, let’s get started! It’s my privilege to introduce our speaker, [Speaker Name]. [Speaker First Name] is the [Title], [Group].� [Include three points about speaker, such as tenure with the bank/industry, previous roles, accomplishments and awards, etc.] Ladies and gentlemen, [Speaker Name]. [SPEAKER] Hello, ladies and gentlemen. As [HOST] mentioned, my name is [Name] and I’ll be providing you with critical information on attracting and retaining talent.

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“Bank of America Merrill Lynch” is the marketing name for the retirement services businesses as well as the global banking and global markets businesses of Bank of America Corporation (“BofA Corp.”). Lending, derivatives and other commercial banking activities are performed globally by banking affiliates of BofA Corp., including Bank of America, N.A., Member FDIC. Securities, strategic advisory and other investment banking activities are performed globally by investment banking affiliates of BofA Corp. (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and Merrill Lynch Professional Clearing Corp., all of which are registered broker-dealers and Members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. MLPF&S and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA.

Investment products:

Certain associates are registered representatives with MLPF&S and may assist you with investment products and services.

© 2018 Bank of America Corporation. All rights reserved. | ARCWBRCF l PRES-08-18-0628 l 11/2018

To learn about Bank of America’s environmental goals and initiatives, go to bankofamerica.com/environment. Leaf icon is a registered trademark of BofA Corp.

Notice to recipient

Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value

Presenter

Presentation Notes

First, here’s some important information about us and this presentation.

https://bankofamerica.com/environment

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Laura Grogan-O’MaraDirector – Retirement Policy Planning & StrategyBank of [email protected]

Presenter

Presentation Notes

[If holding questions for the panel] This concludes our presentation. Thank you for your time. In a few moments we’ll introduce the members of our panel, so I ask that you please hold your questions for them. [If taking questions] This concludes our presentation. Thank you for your time. In a few moments we’ll begin our panel discussion. But I’m happy to take questions for a few minutes before the panel begins.

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Compensation growth is limited in most sectors of the U.S. economy

Benefits are considered more important than base salaries by many job seekers

As the war for talent heats up, competitive benefits are increasingly important

The need for human capital, not credit, is often cited as a key obstacle to growth

Presenter

Presentation Notes

You’re here [today/tonight] because you know it’s become increasingly difficult to attract and retain talent. And that has a direct impact on business. In fact, a lack of human capital, and not credit, is often cited as a key obstacle to growth. Even when you do come across attractive candidates, how do you convince them to choose your company? � Compensation is often constrained — we are seeing limited compensation growth in most sectors — so what else can you do to attract candidates? Our research shows that employees are actually paying more and more attention to benefits when considering job opportunities, and some even place a greater importance on benefits than on base salaries.� So what benefits are available? We found that most companies offer the basics of health insurance and assistance with retirement funding.

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Employers say financial wellness programs are delivering tangible benefits to the firms that offer them, including:

Greater employee satisfaction/lower stress

Less employee turnover

Improvement in employee productivity/performance

Potentially lower health care costs for company

Source: Bank of America Merrill Lynch 2018 Workplace Benefits Report. Boston Research Technologies interviewed a national sample of 657 employees who participate in 401(k) plans from December 15, 2017, through December 27, 2017, and 667 employers who offer both a 401(k) plan and a program designed to help improve financial wellness from December 15, 2017, to January 3, 2018. To qualify for the survey, employees had to be current participants of a 401(k) plan and employers had to offer a 401(k) plan option. Neither was required to work with Bank of America Merrill Lynch. Bank of America Merrill Lynch was not identified as the sponsor of the study. Employee respondent demographics broke down as follows: Men: 46%; Women: 54%; Under 40 years of age: 274; 40-59 years of age: 295; 60+ years of age: 88. Of employer respondents, 325 represented small companies (<$5M in 401(k) plan assets), and 341 represented mid-sized to large companies ($5M+ in 401(k) plan assets).

Presenter

Presentation Notes

More companies are expanding beyond those basics to offer some form of wellness program — specifically financial wellness, which is an emerging benefit area, and often comes in the form of access to a financial counselor. As we’ll talk about later, this speaks directly to what employees are telling us they need and want. And employers see huge advantages in offering these programs, including greater employee satisfaction, reduced turnover, increased productivity, and even potentially lower health care expenses. In our latest survey, 95% of employers who offer a financial wellness program say that their program has been successful in reaching its goals.� We expect to see the number of workplace programs grow in the coming years. Helping employees in the area of financial wellness might give you the competitive edge you need in the talent marketplace.

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What is most important to employees?

Invest in your employees by offering a holistic range of benefits

Financial wellness

Offering robust benefits tailored to your employees’ needs and preferences can help you build a stronger workforce — and gain a lasting competitive edge.

Employees’ primary concerns

Health care costs

Lack of clarity/confidence

Presenter

Presentation Notes

Assisting employees with their finances can help you compete with other employers, but why are these programs so important to employees? Many workers today may not see health care coverage or retirement plans as differentiators, so it’s critical to understand what is most important to your employees. The goal should be to offer robust benefits tailored to their specific needs and preferences. That’s how you can build loyalty, improve employee satisfaction, and attract the talent your organizations are looking for. Merrill Lynch conducts an annual proprietary study and issues the Workplace Benefits Report, which shows that employees are most concerned with:� • Their financial situation and how it affects their lives and plans for the future, which we refer to as their financial wellness • Rising health care costs • Personalized guidance that addresses their specific needs and can show them the steps they should be taking With so much on their minds, it’s clear that a multifaceted approach to benefits is needed. A program that caters to a variety of employee concerns is the key to a more competitive benefits package.

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A significant part of the employee population is struggling

I need help identifying my goals

Struggling to get beyond the day-to-day

Don’t know who can help me

Already doing the best I can

Afraid of making mistakes

Don’t know how, where to start, or what to do

Thinking about finances is uncomfortable

Barriers keeping employees from improving financial wellness are varied and wide-ranging

Source: Bank of America Merrill Lynch 2018 Workplace Benefits Report.

Nearly 2 in 5 employees (38%) feel less than financially well

Presenter

Presentation Notes

A lot of employees struggle with their finances. Nearly 40%, according to our Workplace Benefits Report, feel less than financially well. We view financial wellness as being able to manage current finances while preparing for the future. It other words, it’s not about being wealthy, but being able to address short- and long-term financial goals.� And the sense that some employees have of not being in financial control matters, or should matter, to employers. People who feel that they’re not on top of their finances often bring that financial stress to work. They’re distracted, and even report experiencing negative health effects as a result. Why do these individuals feel that they can’t take greater control of their financial lives? Their reasons aren’t surprising, and may be familiar to some of us in this room.� They struggle to set or prioritize their goals. They’re focused on trying to handle their immediate financial demands. They’re not sure how to get started, or where to turn for help. They get uncomfortable when they have to think about money, or are afraid of doing something wrong, so they just avoid the issue. They say, “Look, I’m doing the best I can” — even though they know they should be doing more. �

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When employees feel financially well, they tend to focus more on long-term planning topics, like retirement.

Employees who DO NOT feel financially well are most concerned about short-term goals

Employees who DO feel financially well are most concerned about long-term goals

Preparing for retirement

Good savings habits

Living within means

Budgeting skills

Paying bills & everyday expenses

Managing debt

38%

39%

37%

24%

18%

20%

21%

30%

28%

32%

30%

44%

Shor

t-te

rmgo

als

Long

-ter

mgo

als

How financially well employees feel can influence the goals they are focused on


Presenter

Presentation Notes

We talked about financial wellness in terms of being able to manage both short- and long-term goals.� You see one of the effects of financial stress when you ask employees — both the financially well and the unwell — what they’re most concerned about. People who are not financially well have trouble looking past their immediate demands and challenges in order to plan for the future. They’re most focused (if you look at the bottom line of this chart) on managing their debt — which is a constant, pressing need. By contrast, less than half as many employees who feel financially well are focused on debt management. At the other end of the spectrum, only 21% of employees who feel unwell are able to put their focus on preparing for retirement. Those who are unwell live more in the moment, which can end up compounding their challenges, while employees who feel they’re on solid financial footing are better able to focus on long-term, big-picture goals. The bottom line is, it’s in everyone’s interest for employers to give employees the help they need to address both their short- and long-term goals.

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7% Only 7% of employees identified health care as an important building block of financial wellness

While employees understand most of the factors that directly affect their financial wellness, the majority ignore one of the biggest factors — health care costs.

Yet many employees have foregone health care-related spending for financial reasons

Employees have skipped or postponed:

Medical appointments

Medical tests/procedures

Purchase of medications

Hospital visits or stays

Skipped health insurance

Purchase of supplies

Health care costs are a huge blind spot for employees

53%of employees have skipped or postponed at least one of these activities to save money

32%21%14%10%

7%4%


Presenter

Presentation Notes

A significant number of employees already feel that they’re not managing their financial lives successfully. While it might seem like piling on, there’s an aspect of financial wellness that they need to start paying more attention to, and that's health care.� Even though workers have been taking on more of the responsibility for managing their health care costs, very few of them — only 7% — appreciate or acknowledge how essential health care is to their overall financial wellness. At the same time, more than half of them have put off one or more health care-related activities — doctor's appointments, tests, medication purchases, even hospital stays — in order to save money. So clearly, they are sensitive to the cost of medical care.

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76%of employees say they understand how HSAs work

Employees lack an understanding of one of the most powerful planning tools they can use to help save for and manage health-related expenses — health savings accounts (HSAs).

HSAs: An untapped resource

12% But only 12% could correctly identify the common attributes of an HSA


Presenter

Presentation Notes

There are things employees are looking for from their employers, and we'll talk about those in a minute, but it’s important to note that many employees already have access to a valuable tool for managing their health care costs.� Health savings accounts, or HSAs, let employees on high-deductible health plans put aside pretax income for future medical expenses. They can even earn interest on the funds in the account. Though adoption of HSAs is growing, employees’ understanding of them remains low. 76% of employees say they understand the accounts, yet only 12% can correctly identify the features of an HSA. So, employers have an opportunity to address this knowledge gap.

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The HSA and 401(k) can both helpwith retirement planning

1 Source: Employee Benefits Research Institute, January 2017. A 65-year-old couple, both with median drug expenses, would need $265,000 to have a 90% chance of having enough money to cover health care expenses (excluding long-term care) in retirement. Savings Needed for Medigap Premiums, Medicare Part B Premiums, Medicare Part D Premiums and Out-of-Pocket Drug Expenses for Retirement at Age 65 in 2016.

2 Assumes a 30% tax rate. $265,000 x 1.30 = $344,500.

$344,500 gross withdrawal from 401(k) planto achieve a net of $265,000 for medical expenses in retirement2

$265,000 tax-freewithdrawal from an HSAnets $265,000 for medical expenses in retirement

$265,000The estimated amount needed by an average couple to cover medical expenses during retirement1

Presenter

Presentation Notes

Many people look to their 401(k) as their primary savings vehicle for retirement. But an HSA, in addition to providing a tax-advantaged way to save for near-term health care expenses, can also provide significant benefits once you're retired. The money in an HSA remains yours even after you leave your job or stop working, so you can use those funds in retirement to pay for eligible medical expenses — and avoid paying taxes on that amount. By contrast, if you pull money from a 401(k) plan that was funded with pretax income, you'll pay tax on the distribution — even if you use it to pay medical bills. In this hypothetical example, a couple who incurred $265,000 in medical expenses during retirement could save $79,500 by paying those expenses out of an HSA rather than a 401(k).

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Americans are living longer, but this brings new stresses

Key factors that increase longevity3

• Remaining socially engaged• Practicing healthy living behaviors• Building financial security

Family commitments pose challenges4

• 40 million Americans are caring for an adult family member or friend

• 68% of those caregivers provide financial support

• "Sandwiched" caregivers juggle caregiving, saving for retirement and supporting their families financially

3 2016 Stanford Center on Longevity, “The Sightlines Project: Seeing Our Way to Living Long, Living Well in 21st Century America.”4 2017 Bank of America Merrill Lynch/Age Wave Study, “The Journey of Caregiving: Honor, Responsibility and Financial Complexity.”

Presenter

Presentation Notes

Health care costs, as we know, continue to rise, but there are other reasons why employees need to be planning more for how to handle medical costs. For one, Americans are living longer than ever before. There are some factors that are scientifically shown to help increase the likelihood of living a long and healthy life. For example, remaining socially engaged and practicing healthy living behaviors — keeping in touch with family and friends, staying active, eating right, all the basics. What’s interesting is that building financial security is also a key factor in living comfortably. Indeed, living longer presents its own challenges, like ensuring there’s enough money to live on, and paying for health care in retirement. But it also has an impact on the family. Caring for elderly relatives is a huge issue facing many Americans today, and supporting family or other loved ones can create additional stress.� Forty million Americas are caring for a family member or friend, and of those, 68% are what's known as financial contributors — meaning they're helping to cover the care-recipient's expenses as well. And caregiving is an underestimated need: seven in 10 Americans who are turning 65 will need care for prolonged periods in their lives — but only four in 10 think they will.� So, employers need to consider how they can help employees handle financial challenges as they and their loved ones live longer lives.

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They’re more likely to be less well off financially


47%say they are less than financially well

in investable assets

in investable assets

Women face particular challenges

And women have saved less than men on average

29%say they are less than financially well

Presenter

Presentation Notes

Recall that 38% of employees overall don’t feel financially well. That number was higher for women. The report finds that women are struggling more than men to achieve financial wellness. • Nearly half of women (47%) say they are less than financially well, compared to only 29% of men. • Women also lag men in savings and preparation for retirement. Female employees have significantly less in investable assets compared to men, and they contribute less to their 401(k)s. � �

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5 Source: Centers for Disease Control, National Vital Health Statistics: Life Expectancy, 2016.6 Source: Age Wave estimate, based off Yamamoto, D.H., Health Care Costs — From Birth to Death, Health Care Cost Institute Report, 2013:

HealthView, Retirement Healthcare Costs Data Report, 2016-2017.7 2017 Bank of America Merrill Lynch/Age Wave Study, "The Journey of Caregiving: Honor, Responsibility and Financial Complexity."

They also shoulder, on average, more of the responsibility for caregiving7:

Women live an average of five years longer than men5 and face higher lifetime medical expenses.6

Women pay more for health care

Women $688,000

Men $494,000

Average out-of-pocket health care costs through retirement, including long-term care

Female caregivers who are employed devote 60% more time to caregiving than their male counterparts

Women are three times more likely to retire early to become a caregiver

Daughters provide 31% of eldercare hours, vs. 16% provided by sons

Presenter

Presentation Notes

In addition, the challenges of paying for health care can be even greater for women. They live longer on average than men do, and will incur significantly higher medical expenses over their lifetimes.� Women also tend to assume more of the burden of caregiving, including leaving the workforce earlier than they had intended to in order to help a loved one. That translates into lost wages and benefits and less saving for retirement.�

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As a result, women face greater financial uncertainty

Women express more fear about key financial concerns than men


Running out of money in retirement

Having to work longer than planned

Becoming ill and notbeing able to work

Being able to pay forchildren’s education

Needing to support family members

Men

WomenFor more information on the financial journey of women, see Women & Financial Wellness: Beyond The Bottom Line, a study conducted by Age Wave in partnership with Merrill Lynch.

When you look at employees as a whole, women are:

14% more likely than men to indicate they feel stress from their financial situation

13% less likely to be very optimistic about their financial outlook

+

Presenter

Presentation Notes

All of these factors take a toll. Women express more fears about finances, with concerns that range from running out of money in retirement, to their working situation, to supporting children and family. Women are 14% more likely to feel stress about their financial situation and 13% less likely to feel very optimistic. So, when thinking about financial wellness benefits, employers need to pay special attention to the specific challenges women face.

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• Today’s workforce is almost evenly split among baby boomers, Gen Xers and millennials8

• Each group has different priorities and preferences• Millennials are now the largest group in the workforce — they’re less loyal, prioritize benefits

and want flexible schedules8

All generations are most focused on retirement, but after that, age affects which financial matters are most important to employees.9

2

Gen Xers Babyboomers

8 2015 Pew Research, “Millennials surpass Gen Xers as the largest generation in U.S. labor force.”9 Bank of America Merrill Lynch 2017 Workplace Benefits Report.

A multigenerational workforce requires a multifaceted approach

For millennials

#2Good general savings habits

#3Paying down debt

For Gen X

#2Paying down debt, good

general savings habits and budgeting are all tied

For baby boomers

#2Planning for health care costs

#3Paying down debt

Presenter

Presentation Notes

Aside from the special challenges that women face, there are other ways in which employees have varying needs. Just based on age alone, there’s a lot of diversity in the workforce.� When you have three different generations — baby boomers, Gen Xers and millennials — in the same organization, you’re going to be faced with different priorities and preferences. Everyone’s #1 financial concern is saving for retirement, but after that, you see some variation. Paying down debt is a concern across the board, but millennials are seeking to establish good saving habits, while baby boomers are, understandably, more concerned about handling their health care costs as they age. So employers should make sure their financial wellness programs are designed to address a wide range of employee needs.

17Source: Bank of America Merrill Lynch 2018 Workplace Benefits Report.

Employees are hungry for help from employer-offered financial wellness resources

And employers overwhelmingly feel like they have a responsibility to help employees

of employees say they are very or somewhat likely to participate in an employer-offered financial wellness program, if offered

81%of employees indicate they prefer that financial wellness be offered as a bundled program, instead of as stand-alone resources

18%

Improve talent acquisition

and retention

74%

We feel it is our responsibility to help

employees

7%

Improve bottom line (from higher productivity, cost

savings, etc.)

86%6

Presenter

Presentation Notes

As you can see, between financial stress and rising health care costs, employees need help with their financial situations. It’s natural that, given the connection between finances and work, employees would look to their employers for assistance.� The good news overall is that both employees and employers are interested in workplace financial wellness resources.� 74% of employers feel they have a responsibility to help employees. And employees are receptive, with 86% saying they’re very or somewhat likely to participate in a financial education program if their employer offered one. Employees would prefer that wellness be offered as part of a suite of financial benefits to help them manage many financial challenges, not just retirement. For employers, there is an opportunity here. They can reduce the stress and distractions of their employees (making them more productive), plus remain remain competitive in the war for talent.

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Employees want personalized advice from a professional

The number of employees doing less than well financially varies by age:

70%of employees would be comfortable sharing financial information as part of an employer-offered financial assessment

An action plan or steps

Employees say some of the most important aspects of a personal review are:

Tracking progress & accomplishments

Some indicate that the most important thing to improving their financial wellness is to help them focus on the next single thing to do, while others want to be told several things to do.

And employees have different needs

Assessing how I’m doing

Factoring in my specific goals

Help me focus on the next single thing to do

Or tell me several things to do

44%38%

23%Millennials

Baby boomersGen X

Yet all employees agree on what would be most helpful: advice from a professional


Presenter

Presentation Notes

Younger workers — those under 40, who are less established professionally and may be paying off student loans — are doing less well financially than their counterparts.� But what all employees, regardless of age, want more than anything is personal, one-on-one advice from a financial professional. And most employees say they’d be comfortable sharing financial information as part of an employer-offered financial assessment. When getting a personal review, employees want help that is: 1) Tailored to them — factoring in their specific goals 2) Actionable — they want to know what to do 3) Measurable — they want to assess how they are doing and track their progress People have different needs and approaches, and not everyone wants a full plan upfront. Some want to know just the next single thing to do, while others want to tackle several things at once in a more integrated way. The takeaway is that employers should provide more than one way to deliver action plans to employees — a degree of personalization is important here as well.

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Employers are responding

46%

increase in participation in the last year has been seen by employers who offer these programs

of employers say they offer broad and holistic programs to employees

56%71%

of employers have expanded their financial wellness program offering


Presenter

Presentation Notes

The good news is, employers are stepping up, and employees are taking advantage of financial wellness benefits — but there’s more opportunity all around. Just over half of employers offer broad, holistic financial wellness programs, though 46% say they’ve expanded their offerings. Companies that offer these programs have seen a 71% gain in participation over the last year. This reinforces that: • By offering financial wellness programs, employers really can have a significant, positive impact on the financial lives of their employees� • Employers can increase the awareness and use of financial wellness programs by actively promoting them and communicating the benefits

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What this means for employers

Employees are experiencing financial stress, and it’s affecting their productivity at work. It’s natural they look to employers for help.

Health care costs continue to rise, and employees need help planning for these expenses.

Employees are eager for personalized financial advice, and are open to receiving it through a workplace financial wellness program.

A multigenerational workforce requires thoughtful consideration about employee priorities and communication preferences.

Presenter

Presentation Notes

What does all this mean for you, your organization and your employees? Where can you rise above the competition and provide meaningful differentiators in the area of benefits? First, providing financial wellness assistance and education. It’s become clear that employees are experiencing financial stress. It’s causing their health and productivity to decline. And as they spend so much of their time at work, it’s natural that they’re looking to employers for help managing their finances. Second, rendering assistance with health care costs. As health care costs continue to rise, employees need help planning for increased expenses. Third, personalized financial guidance. Many employees say that advice from a professional could be the biggest contributor to improved financial wellness. Fourth, knowing how to address the multigenerational workforce. As employers, you must have a plan that addresses the varying priorities and communication preferences of the generations you employ.

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Laura Grogan-O’MaraDirector – Retirement Policy Planning & StrategyBank of [email protected]

Thank you

Presenter

Presentation Notes

[If holding questions for the panel] This concludes our presentation. Thank you for your time. In a few moments we’ll introduce the members of our panel, so I ask that you please hold your questions for them. [If taking questions] This concludes our presentation. Thank you for your time. In a few moments we’ll begin our panel discussion. But I’m happy to take questions for a few minutes before the panel begins.

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Attracting and Retaining Talent - Carolinas Cash …...Attracting and Retaining Talent How financial wellness programs can provide a competitive edge May 20, 2019 [HOST]\爀䠀攀氀氀漀