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Operating any business or company isn’t easy or intuitive, but running a franchise can present its own set of challenges. Franchise owners might be operating several different locations, keeping each of them up-to-date on the latest franchise standards and expectations. And those locations also might employ a mix of different employees, with full-time workers in addition to part-time employees, and possibly even contractors.
The mix of employee types in particular means that franchise owners must come up with innovative ways to offer workplace benefits to their entire staff. So how can franchise owners structure a benefits plan that is both affordable for the organization and attractive to current and prospective employees? One solution could be providing employer-sponsored emergency savings accounts (ESAs) to workers.
An employer-sponsored or workplace ESA is a savings account that’s dedicated specifically to emergencies and that is linked to the saver’s payroll account. The employee can allocate part of their regular paycheck to help build up savings in the account, and employers can also offer incentives to save more if they choose, such as partial matching, milestone bonuses, and more.
Employees with access to a workplace ESA will open the account through their employer. This is typically a fast and easy process involving just a few clicks or steps on the employee’s side. The employee decides how much to contribute to the ESA for each pay period, and then the payroll deduction will be automatically sent to the ESA.
Employers can offer their own contributions to workplace ESAs, such as sign-up or milestone bonuses, or matching some of the employee’s regular payroll contributions.
Most income groups experience financial stress, but it’s much more pervasive and acute among low-to-moderate-income (LMI) households and individuals. More than four-fifths (86%) of low-income households and more than three-quarters (78.1%) of moderate-income households said they were “very” or “moderately” stressed by rising prices. For low-income households, early delinquencies on car and credit loans started to rise in 2022 and were higher this year than any time since 2020. Many of these LMI employees work at franchises operating in food service (including fast food or fast casual restaurants), retail and convenience stores, cleaning operations, and fitness centers, among others.
More than one in four Americans (27%) have no emergency savings at all, and more than half (59%) are uncomfortable with their current level of emergency savings, according to Bankrate. Our own research found that 29% of survey respondents said that stress over their financial situation has negatively impacted their productivity at work, and 38% of respondents said that they’d experienced a financial emergency in the previous six months that affected their performance at work.
Financial stress doesn’t just affect employee productivity. It can also lead to job-searching among stressed employees, increased absenteeism and presenteeism (when employees are present at work but preoccupied), and it has implications for sleep, personal relationships, and other mental health ripple effects. Organizations lose billions of dollars every year to employee financial stress.
Most employees want help with their finances, and providing financial assistance is a key way that employers can enhance their culture, increase loyalty and retention, and keep employees engaged at work. Our research found that a workplace ESA is the most compelling benefit when considering a new job, and 90% of respondents said they’d be interested in an employer-matched ESA benefit.
For employers, offering workplace ESAs generates a number of positive effects that enhance their culture, their employee satisfaction, recruiting and retention efforts, and even their bottom line. Employees who are worried about their financial situation are nine times more likely to have “troubled relationships” with coworkers and twice as likely to be searching for a new job.
Having access to a workplace ESA can reduce turnover and keep employees engaged. Emergencies are unpredictable by nature, and when a financial emergency arises, employees without any kind of emergency savings might spend hours every day thinking about how they are going to meet this new, urgent expense, including looking for a new job. Offering a workplace ESA answers that question for employees, who can then stop worrying about their emergency financial situation and focus on their work.
Similarly, employees without an ESA might need to take time off work to deal with the financial emergency. Even if they come to work, they could be spending time making phone calls to try to determine their best next step, texting with family or other household members to brainstorm solutions, researching their options online, and possibly even job-hunting. By providing emergency savings through the workplace, employers can reduce or even eliminate this understandable (but unproductive) employee behavior.
A supportive work culture not only helps retain current employees; it also serves as a recruiting mechanism for new employees, especially in regions with competitive job markets where it can be difficult to find highly qualified workers. Current employees are more likely to have positive feedback about the organization, sharing their experiences through word-of-mouth, on Glassdoor, or through other channels, which can enhance recruiting efforts and make franchises more attractive to potential hires.
The first step to adding a workplace ESA to an employee benefit package is to determine which ESA provider will be the best fit for the organization. There are several companies that offer workplace ESAs, but franchise owners or franchisors will need to consider some specific variables that might not apply to other companies.
For example, an ideal ESA provider for a franchise will be able to offer payroll integration and implement seamless rollouts across multiple locations, with streamlined support available for HR, managers, and employees. The ESA provider should also provide multiple program options that can support different employee groups and payroll schedules, from full-time staff to part-time workers and even contract workers, and workers in different municipalities or even different states. And the cost per employee should be affordable to ensure that the franchise owner is able to offer it across all their locations.
Other must-have features include dedicated support staff to help with deployment and SFTP (secure file transfer protocol) integration. A top-tier workplace ESA will have an easy-to-use employee app with a simple ESA enrollment process, reporting features to provide insight into employee usage, and educational resources for employees, franchise owners, and HR staff.
After selecting an ESA provider and initiating the deployment process, organizations will need to inform employees at all locations about the ESA and how to enroll. Telling employees that the benefit exists and sharing details about sign-up is just the beginning; employees might not fully grasp how useful a workplace ESA can be without ongoing education and coaching around the benefits of having emergency savings and the specific use of the workplace ESA. The best ESA providers will have customizable messaging for different types of business and employees, which should be easy for franchise owners to adapt and use across all their stores.
Finally, organizations will want to set up some kind of internal process for reviewing the metrics reports that are generated through the ESA provider and to filter and evaluate them by store, type of employee, and other variables that might influence usage and engagement. This will allow HR staff, franchise owners, and others to tweak the program to generate greater adoption.
One of the biggest barriers to offering a new benefit is the cost to the organization, and this can be especially true for franchises. A workplace ESA can be surprisingly affordable, especially considering its impact on employee engagement and productivity.
SecureSave costs employers between $1 and $3 per participating employee, per month, based on the number of employees (franchise owners can combine the number of employees at each individual location to get a better rate). There’s no setup fee, no administrative or advisor costs, and customer service is included. Our business impact calculator can provide a customized estimate that’s based on company size, annual turnover, average salary, and possible signup and matching bonuses. Employers willing to invest more in the program will see higher adoption rates.
To increase employee adoption and engagement, employers can provide sign-up bonuses to workers who open an account, match a portion of payroll contributions, or offer milestone bonuses to users who meet certain savings goals. Some employers have had success with leaderboard-style contests that track individual or department-level savings and reward the people or groups saving the most; franchises might offer location-specific leaderboards that encourage friendly competition.
The workplace ESA program reduces employees’ financial stress (and resulting absenteeism and presenteeism), increases loyalty, and can serve as a retention and recruitment tool, making it one of the most cost-effective employee benefits available for part-time and franchise employees in particular.
It’s not easy to create a benefits package that is attractive to a full spectrum of franchise employees, from part-time seasonal help to franchisor staff members with years of loyal service. A workplace ESA can meet a range of employees’ needs, alleviate financial stress, improve morale, and is affordable and easy for companies to implement. The return on investment for a workplace ESA makes it an easy choice: It’s one of the best ways for franchise owners and operators to cultivate a more secure, productive, and loyal workforce.