One of the most serious financial conundrums facing many Americans is the inability to weather even small emergencies. CNN reported in January that almost 60% of adults couldn’t handle even a $500 emergency without resorting to a credit card, a loan from friends or family, or a serious budget overhaul. But there is a new wave of companies that have found a new way to support employees and help them achieve financial responsibility without necessarily giving up their unicorn toast: an employee emergency fund.
SunTrust Bank first rolled out the new benefit program two years ago and has found it worthwhile to expand it. Meanwhile, dozens of other companies — including Home Depot, Delta Airlines, Waffle House, and 1-800-CONTACT — caught wind of SunTrust’s success with the employee emergency benefits and are trying the concept out, too. Called MomentumUp, the program is designed to address some of workers’ frequent complaints about their employers, like a consumer market survey statistic that “70% of employees believe their employer has little concern for their financial well-being.”
MomentumUp works by blending a financial literacy component that helps participants better understand how they can reach their financial goals with a matching fund that encourages employees to start socking away in case the worst happens. Indeed, it’s hard to find someone out there who isn’t squeezed by a stagnant minimum wage, ballooning housing costs, student debt, rising insurance premiums (or the looming loss of any sort of insurance coverage), salary-sized daycare fees, and a myriad of other pinches. SunTrust cites their 2016 study that found a whopping 46% of Americans live paycheck to paycheck, so it makes sense that a bank would want to help its employees make ends meet.
A cynic might say this is just a way for employers to say they’re helping by encouraging workers do more with less, and to a certain extent, that’s true. The $1,000 match is generous, but doesn’t necessarily balance out the national drop in 401K benefit matches or the country’s healthcare chaos. That said, SunTrust said their survey of participants showed the number of employees using budgets leapt from 43% to 87%, a 30% increase of those with emergency funds to almost 100%, and a 35% increase in employees’ retirement contributions.
Those numbers are inspiring, but don’t address another major aspect of emergencies that many employees dwell on — how to get the time off to handle personal illness, bereavement, or other events that pull you out of the office. MomentumUp does include a “fiscal health day” to put the program into practice, but that doesn’t necessarily count towards an actual bad day. More and more people are waiting longer to get married and start families, and there isn’t always someone to bicker with over who can meet the repair man, much help carry on amidst a true crisis. But MomentumUp is a good sign that employers are trying to keep up with employees’ needs, and the program’s success is a sign that money-savvy millennials might have finally gotten through to the higher ups that they need more than open offices and kegerators to survive.
(Via Time Magazine, SunTrust Bank)
