One key is to recognize the different levels of financial health. While employers have traditionally focused on retirement planning for employees, there are many more immediate hurdles employees need help with. Cosgray broke financial health down into different components based on present and future, security and freedom of choice.

“Where most of want to be is the flexibility to make choices,” Cosgray said. “Not only be able to pay bills but have discretionary income to take a vacation, go out to eat. That is going beyond financial security to financial freedom. But we still have employees struggling back at the beginning to deal with financial shock. This is an area where clients ask us to do more, and there are real opportunities.”

In general, recent college graduates might likely be struggling with financial challenges in the present and older employees might be more concerned with retirement savings. “Overall, it's important to realize that your employee financial challenges aren't going to be all the same even if jobs and pay are similar,” Cosgray said.

From there, according to Despard, employers have an array of options available to them of increasing involvement and complexity. “These products and services can be mixed and match. These aren't either-or types of options. We're working with a lot of fintech companies that provide some pretty interesting digital platforms and apps to help employees manage financial challenges.”

Financial counseling is one example of a high-touch solution that can have an impact. Despard looked at the credit outcomes of low- and moderate-income workers in the New York City area before and after sessions with a counselor. “Employees that had three or more counseling sessions made more progress improving their credit health,” Despard said. “Employees who had the lowest credit scores had the greatest increase in scores after they received financial counseling. It's resource intensive for employers but can really make a difference for employees.”

Another option that's less involved is small-dollar loans, which can create some financial flexibility for employees without the excessive fees of alternative payday loans.

Maybe the easiest thing employers can do is just offer the option of allowing employees to split their direct deposit and have a certain percentage of their paycheck go directly into savings each pay cycle. “We know emergency savings is very important to people,” Cosgray said. “Half of Americans are doing that, but there's another half that don't. Make it easy for employees. And make sure employees know about it.”

Employers can also consider internal fixes to ease the financial stress on employees–making work schedules more predictable for example, or ensuring they're offering an HSA match to employees with HDHPs.

And then there's one resource that's continually overlooked by employers and employees alike: The employee assistance plan. Many EAPs offer a financial counseling service to users. “This is a great example of where you could use a great high-end low-touch strategy,” Despard said. “For that group of employees that need something more than very occasional assistance but have fundamental challenges, access to financial counseling would help them. Sometimes there's a misunderstanding that people are running into financial problems over and over because they don't know how to manage their money.”

In many cases, employees who are struggling financially are also trying to juggle being a caregiver or paying for childcare or have some other underlying issue that could be addressed.

But how do employers determine what their employees need? “I'm going to make a pitch for old data,” Despard said. “Think about the types of data you have in your HR systems: 401(k) participation rates, deposits, withdrawals. Loan requests, outright cashouts. Looking at those types of data, you can begin to paint a picture of where your employees are.”

In addition to the data already on hand, consider simply asking employees about their financial health. If it seems weird to ask your employees about such personal details, but it may help to turn draw from the wealth of resources and studies on financial wellness, including the National Financial Capability Study, the Survey of Household Economics and Decisionmaking or the Consumer Financial Protection Bureau.

“The advantage of asking questions like these is that you can get answers from your employees and then benchmark them against national responses,” Despard noted. “You can also analyse responses such as age or tenure to see how financial stress may be affecting employees differently. You may also want to, particularly when you're looking at new benefits, is conduct a discussion or focus group of your employees to get feedback. Figure out what's going to drive participation and what's going to make them more or less likely to participate in a benefit.”

From there, it's a matter of building a communication strategy to make sure employees who need a particular resource are aware of it. ”We think when we give them the right tools to make the right decisions in the right way, employees will make the right choices to improve their lives,” Cosgray said.

Read more:

• How to create employee financial wellness programs that lead to lasting behavior change
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