Financial New Year’s Resolutions for Employers and Employees
As the new year approaches, people across the country will make resolutions to improve their lives during the following year and beyond. Although all resolutions are clearly not the same, certain ones seem to be the most common, year after year.
Near the end of 2017, a public opinion company (YouGov) surveyed people to find out which resolutions topped the charts. There was a three-way tie for number one:
- Eat healthier
- Get more exercise
- Save (more) money
It’s not surprising that a financial resolution was one of the chart toppers. In fact, that’s pretty much expected, with financial New Year’s resolutions ranking at or near the top regularly. If those rank high for you as well, here are tips for organizing your finances in 2019.
Financial New Year’s Resolutions for Employers
Resolution #1: Reduce Employee Turnover
Recruiting and onboarding employees can be expensive, and the costs of high turnover can really damage a company’s bottom line. After all, what turnover really means is that you’ll repeatedly be recruiting and onboarding for the same positions over and over again.
Each time you need to replace an employee, you have the costs of recruitment advertising, plus you must screen resumes and conduct interviews or pay someone else to do it. Background checks cost money, and so do headhunters. Then there are the training costs, which can be significant all by themselves—and then, if you have high turnover, you more or less turn around to do it all over again.
Those are just the obvious costs of high turnover. Often, you must pay other employees overtime to pick up the slack while you’re short on staff. Those employees could start to feel burned out, quickly becoming less productive (and those disgruntled employees may look for other jobs themselves). The article estimates that each time you lose an employee, you can figure the costs associated with replacing him or her at 6 to 213 percent of that person’s salary, depending upon whether this is an entry-level position (low end) or executive position (high end) or something in between.
It makes financial sense to focus on retaining quality employees in 2019 and beyond. When you keep an employee happy and engaged in the workplace and provide fair compensation, he or she is less likely to seek employment elsewhere.
Benefits matter as well. In March 2018, we shared a key statistic from the American Bar Association: Seven out of every 10 people in our country will need legal services over the next year. At U.S. Legal Services, our voluntary group legal benefits can protect your employees and help them to feel valued at your company.
In October 2018, BenefitNews.com shared the 15 most popular employee benefits today, which include ID theft prevention and financial planning resources. When you offer your employees our Family Defender™ legal benefits plan, they receive both of those benefits, along with easy, affordable access to attorneys.
If you’re looking for a way to add legal benefits to your voluntary benefits portfolio, we invite you to contact us for enrollment information online or call us at 1.800.356.LAWS. Our plans are easy to manage and there is no cost to your company.
Resolution #2: Create SMART financial goals for the upcoming year
Let’s say you want to cut expenses next year. It’s important to go beyond just stating that as a goal, though, and make it SMART:
S: specific
M: measurable
A: achievable
R: relevant
T: time-bound
Let’s say you create a plan where you’ll review each of your vendors, whether they provide services or supplies to your company, raw materials or shipping materials or something else entirely. You’ll task each manager with providing a plan that cuts expenses by 10 percent in his or her area or assign each department a dollar amount that needs streamlined. What’s reasonable and achievable varies by company and, sometimes, by department.
Provide your employees with whatever tools they need to request quotes and then price compare, and give them a specific deadline to turn in results. Perhaps you can tie in company bonuses or other rewards to how well each department saves the company money without diminishing quality.
Also have corporate goals for this money you’ll save. Will it go into an emergency fund in case any equipment breaks down? Will you expand into a new geography? Research and develop a new product?
Here’s more information about setting SMART financial goals for next year.
Financial New Year’s Resolutions for Employees
Resolution #1: Do a personal financial audit and close gaps
It’s easy to get into the habit of paying whatever bills you have without really thinking them through. In today’s world of online subscriptions, apps and more, it’s far too simple to keep paying monthly charges for services that you rarely if ever use.
Consider making a budget review one of your financial New Year’s resolutions. List your monthly income after taxes and your monthly expenses, which may include:
- mortgage or rent payment
- property tax payments
- insurance costs, broken down into a monthly amount, even if you don’t pay it that way
- vehicle loan payments
- credit card payments
- utility bills, cell phone payments, cable and internet
- student loan payments
- entertainment expenses
Which discretionary expenses can you eliminate? Which ones can you price compare—perhaps your car insurance policy and cell phone plan—to make sure you’re getting the best value for your dollars? Would a debt consolidation loan make sense to combine credit card balances into one loan with a lower rate? Should you refinance any of your loans?
How can you find simple ways to save more money? There’s an app called Acorns that takes any cents left over from your purchases and automatically invests them for you (pay $11 for something that costs $10.23, and Acorn will painlessly invest that 77 cents). Or use apps like Ebates that give you cash back on online purchases.
As part of your personal financial audit, identify gaps exist that may cost you significant amounts of money. For instance, do you have enough life insurance? If you have pets, have you explored whether or not pet insurance makes sense for your family? If your employer offers a legal benefits plan, have you signed up?
If your employer offers our Family Defender™ legal benefits plan, we encourage you to explore the benefits. We’d be happy to talk to you about all of the ways this plan—which is really a holistic legal and financial wellness plan—protects you and your family. It even has an identity theft protection plan enhancement.
Resolution #2: Take full advantage of benefits you already have
If you have credit cards with rewards points, are you taking full advantage of them? If you’re signing up for Weight Watchers or buying a gym membership, does your health insurance pay for it? If you have a health savings account (HSA), are you getting all the reimbursements you’re entitled to receive? Are you paying for classes or databases that your public library offers for free? If you belong to professional organizations, are you aware of all the free services and discounts they may offer or are you paying full price for them?
Opportunities for savings, as well as free services, are likely all around you, and it’s possible that you’re not using them to your fullest advantage. (If so, you’re not alone!)
Here’s something else to consider. If you’re a member of a U.S. Legal Services plan (Family Defender™ legal benefits plan or the CDL Defender™ plan for commercial drivers and their spouses), there are numerous benefits that you may not have had time to take advantage of yet, and we encourage you to consider them for 2019. You can have access to local attorneys who can help you with estate planning, from financial and health powers of attorneys to living wills and last wills and testaments and more.
Plans also include financial wellness coaching, identity theft protection and much more. Check with your company’s human resource or benefits administrators for information on your company’s specific plan.
Bonus Tip: Keeping Financial New Year’s Resolutions
Whether you’re an employer or an employee, step one is making SMART resolutions—and then it’s crucial to stick to those resolutions. To do that:
- Double-check that your goals are realistic.
- Review your progress and, when it makes sense, tweak strategies and tactics.
- Enlist a co-worker, friend or family member to provide support, when needed, and offer to return the favor.
