The cannabis industry will add 200,000 new workers in the next five years. Retaining the good ones may be challenging. One of the ways both small and large businesses across industries attempt to limit attrition is by taking care of their employees with benefits that extend beyond paychecks.
Although it is legal for cannabis businesses to offer employee benefits, they’re often overlooked due to fast growth and non-corporate culture. This is a mistake. More than half of larger employers across all industries now offer financial wellness programs to help relieve pressure on their employees while small employers, like cannabis businesses, recognize the problem but only recently have begun considering implementing programs of their own.
The COVID-19 pandemic worsened the financial straits of substantial numbers of small-business employees, who typically make less than employees at larger companies and are more likely to have suffered from schedule cuts and layoffs during the pandemic. Pew Research recently found 44 percent of surveyed Americans expect it will take three years or more to regain ground lost during the pandemic. One in ten doubt their finances will ever recover.
Financial wellness programs are as relevant to small cannabis organizations as to large, producing a return on investment that could be as high as 3.1 percent based on a reduction in employee-based costs in productivity and absenteeism alone. More importantly, many of the services that can be offered under such a program’s umbrella don’t create a drain on employers’ resources.
Following a few important guidelines will lead to effective strategies that not only help employees better manage the causes of financial stress, but also position businesses for future success.
1. Assemble a task force of key players with a vested interest
This starts with human resources and employee benefits leaders, but retirement services members are essential, too. The best programs combine ideas from both teams to understand the causes of financial stress and present solutions. Maintaining silos will only block the design of programs that get to the heart of the problem.
2. Undertake employee analytics up front so solutions are on-point
It’s easy to assume Gen Z and millennial employees are saddled with college loan debt. But how are older Millennials and Gen Xers dealing with getting a first mortgage loan or refinancing? And which groups are most in need of counseling about budgeting, saving, and retirement planning? The most effective benefits programs are finely tuned to the specific needs of workforce members. Employee analytics will provide the insights to get there.
Some approaches include:
- Data establishing employee usage of current hard and soft benefits like health insurance, voluntary benefits, sick time, and vacation days can provide good indicators for program development.
- Well-structured, confidential employee surveys can identify specific financial wellness concerns and what kind of employer support would be most valued.
- Persona analysis has tremendous value by doing a far more expansive profile of employees than generational segmentation. Improved insights into needs are gained by looking at employee groups not just by age but also by, for example, length of time in the workforce and company, level of job in the company, and benefit engagement patterns.
3. Investigate solutions that fit needs
Assembling a lineup of solutions that address the financial pressures facing employees doesn’t have to break the bank. Many of them may be hidden in plain sight, which is a good reason to undertake an audit of what’s already in the benefits lineup but has never really been called out. Think about employee assistance programs (EAPs). These tend to be underutilized, which represents a missed opportunity. Financial wellness services like financial counseling are typically in an EAP’s mix of services. Legal services may be another overlooked voluntary benefit. They can be pulled out and repackaged under a new program.
The types of services that may be wrapped into a program will hinge on employee analytics. Typically, though, needs and services fall into different buckets. These include education, which can be online and interactive or workshops or one-on-one counseling, and employer-matching programs like 401(k)s and student loan repayment plans.
Other solutions provide financial assistance like paycheck advance services that help employees avoid the high rates of payday loans. Many of the most needed services cost an employer nothing, but just providing access that employees couldn’t get on their own can make a big difference in their financial situations.
Because cannabis is still deemed illegal federally, there are a limited number of benefits insurance companies willing to provide employee benefits to the industry. Working with a benefits broker who specializes in cannabis operations will be critical to success.
We are emerging from a tough year that created new stresses and exacerbated existing ones for many Americans. As we continue the recovery process, cannabis businesses have an opportunity to help counter the pressures facing their workers through financial wellness programs. Companies will find such programs are a win-win proposition for both the workers and the corporate bottom line.
This article was reprinted with permission from mg Magazine.