How flexible benefits can give employees financial freedom

The financial well-being of employees has a direct impact on many of the most important measures of a healthy workplace, such as engagement, retention, and productivity. When employees are worried about their finances, this can become a major distraction at work and affect everything from their level of motivation to their mental health. HR teams have a responsibility to help employees manage their finances more responsibly, which will enable them to meet their financial goals while putting the company in a stronger position to succeed. 

Financial wellness benefits are quickly becoming a must-have for competitive companies. Beyond a 401(k) match program, performance bonuses, and other conventional financial benefits, HR teams should be thinking creatively about how to meet employees’ evolving needs, such as the growing demand for flexibility. For example, employees increasingly want immediate access to funds with on-demand pay and financial assistance. These programs can help them stay on top of bills and other expenses without amassing credit card debt, taking money out of their retirement accounts, or relying on high-interest payday loans. 

Employees are eager for financial assistance, which is why they’re asking for educational resources to help them manage debt, track their expenses, and save for the future. The HR teams that make employee financial wellness a priority won’t just help employees meet their financial goals—they will create a more engaged and productive workforce. 

Financial wellness is critical for a healthy workforce

Employee disengagement is one of the most urgent problems companies face, as it leads to declining morale, turnover, and lower levels of job performance. According to Gallup, just 31 percent of American employees report that they’re engaged at work—a rate that just hit its lowest level in a decade. Stress is a major cause of disengagement, and 41 percent of employees told Gallup that they felt a lot of stress the previous day at work. PwC reports that 57 percent of employees say personal finances constitute the top cause of stress in their lives, and those who are stressed about money are five times as likely to say this has been a distraction at work compared to those who feel financially stable. 

According to a recent SoFi survey, employees report that financial stress is causing problems with sleep, mental and physical health, motivation, and relationships. One-third of employees say financial issues affect their focus at work, 25 percent say it reduces their productivity and confidence, and 26 percent say it saps their motivation to pursue professional goals. These problems may be getting even worse—86 percent of employees say they feel increasingly stressed about finances, and this proportion is on the rise. 

Financial issues have a sweeping impact on many aspects of employees’ personal and professional lives, and this can have severe consequences for the overall state of the workforce. HR teams must take action to improve employees’ financial circumstances and address all the aspects of well-being that are affected by their financial health. 

Giving employees better financial alternatives

According to a 2025 survey, just 41 percent of Americans say they would be able to draw upon their savings for an unexpected emergency expense—the rest would be forced to pay with a credit card, take out a loan, or cut back on spending. In the fourth quarter of 2024, credit card balances surpassed $1.2 trillion, while the rate of serious delinquency (which means more than 90 days past due) increased for auto loans and credit card debt. In 2024, 4.8 percent of 401(k) account holders took withdrawals to cover financial emergencies—an all-time high, and up from just 1.7 percent five years ago. 

Millions of Americans also take out payday loans every year, with annual percentage rates (APRs) that can soar to eye-watering heights in many states—up to 554 percent in Utah, 602 percent in Nevada, and 652 percent in Idaho. Many Americans clearly need financial relief, and HR teams can intervene with flexible benefits like on-demand pay and low-cost loans. For example, Kashable is a company that offers employer-sponsored financial benefits like loans with competitive APRs that enable employees to meet immediate financial demands without draining their retirement accounts or relying on extremely high-interest payday loans. 

Employees can also meet urgent financial needs with on-demand pay. Tapcheck allows employees to withdraw funds much more quickly than the typical weekly or biweekly payment structures offered by most companies. Life doesn’t happen in two-week increments, so there’s no reason why employee pay should be constrained that way. By offering alternatives to risky debt and typical payment schemes with services like low-cost loans and on-demand pay, HR teams can help employees take control of their financial lives. 

A new approach to financial benefits

Employees are no longer content with one-size-fits-all benefits that fail to address their unique needs and goals. This is why 70 percent of employees report that the availability of customizable benefits would make them more likely to stay with their current employer. Flexible benefits are broadly popular among employees—according to an ADP survey of employers that offer on-demand pay, 96 percent say employees like it. Hourly workers are especially attracted to on-demand pay, 94 percent of whom say it would be highly beneficial. 

Kashable and Tapcheck aren’t just limited service providers—they are both focused on holistic financial well-being for employees. They offer services such as credit monitoring and financial advice for managing debt and budgeting. These services are especially important at a time when nearly three-quarters of employees say they want help with their personal finances. HR teams should view this demand as an opportunity to help employees get their financial lives in order—a shift that will have substantial benefits for the company. 

It’s no wonder that employees’ personal finances have an immense impact on their well-being and performance at work. While financial problems like debt can be a huge psychological burden, financial freedom gives employees the space to plan for the future and bring their best to work every day. The HR teams that recognize this will have a much easier time attracting and retaining talent, improving productivity, and maintaining a healthy workforce. 

Convertible PTO provides financial flexibility

Although PTO is a core benefit at most companies, over three-quarters of employees don’t use all the vacation time they have accrued. This means many employees aren’t receiving the full value of a critical benefit—value they can’t afford to leave on the table at a time when many are facing significant financial obstacles. This is why it’s no surprise that convertible PTO—which enables employees to redirect the value of their unused time off toward other financial priorities—is a growing trend in 2025. 

With BNFT’s PTO Exchange solution, employees can convert unused PTO into 401(k) contributions, student loan payments, health savings accounts, charitable donations, or cash withdrawals. The solution can be integrated into existing payroll systems and customized to fit employees’ unique needs—as well as the needs of the company. Because the funds for PTO have already been set aside, convertible PTO enables HR teams to provide much greater flexibility to employees without increasing expenses. Convertible PTO enables employees to improve their financial well-being, which will help them reduce stress and become more engaged at work. It also meets the growing demand for flexibility, which will help HR teams attract and retain talent. 

It’s time for HR teams to think more creatively and holistically about how they can improve the financial well-being of their employees. Innovative solutions like PTO Exchange, Kashable, and Tapcheck give employees a wide range of options for managing their money and using their hard-earned benefits, which empowers them to prioritize their financial health like never before.

Looking to take your PTO program to the next level? Discover the power of PTO Exchange and give your employees the financial freedom to self-direct their unused vacation time towards financial causes that are important to them like cash, retirement contributions, student loan payments and more! Schedule your customized demo of the platform today!