How to provide financial wellness solutions for part-time or temporary workers

By Devin Miller
May 1, 2024

Part-time and temporary workers are integral to the flexibility and competitiveness of today’s labor market. Often defined as people who work less than 35 hours per week and/or do not hold a formal employment contract, these individuals tend to encounter unique financial hurdles due to their variable income and limited access to traditional employee benefits.

With over 28 million part-time workers in the U.S. alone and upwards of 10-12% of the labor market in a non-traditional or alternative work arrangement, there is a clear need for financial wellness solutions tailored to this population. Moreover, given the fierce competition for hourly and seasonal workers, organizations looking to attract and retain this employee base must consider how they’re meeting these individuals’ financial needs beyond compensation.

There are various strategies that business leaders can adopt to address the distinct needs of this population and help foster their financial security.

Understanding the financial needs of part-time or temporary workers

From seasonal retail workers to agricultural workers, construction laborers, food service workers, consultants, customer service representatives, and computer programmers, part-time and temporary workers are employed across a wide range of industries and professions. But these workers frequently face a common challenge: financial instability stemming from irregular income patterns and limited job security.

The U.S. Bureau of Labor Statistics categorizes many of these part-time and temporary workers as contingent employees, or those “who do not have an implicit or explicit contract for ongoing employment,” do not expect their job to last, or describe it as temporary. The discrepancies between contingent employees and non-contingent — or traditionally employed workers — are stark, particularly when it comes to financial security:

Only 23.4% of contingent workers were eligible for employer-sponsored pension or retirement plans, compared to 47.6% of traditional employees.
Of those eligible for retirement plans, only 18.4% of contingent employees participated in them, compared to 43.4% of non-contingent workers.
Approximately 25% of contingent employees had employer-sponsored health insurance, compared to 50% of traditional employees.

Recognizing the specific financial needs and preferences of these workers is crucial for crafting effective wellness solutions beyond the traditional benefits afforded full-time, non-contingent employees.

Flexible benefits offerings

For part-time and temporary employees, flexible benefits can offer security and support despite their non-traditional employment status. These types of options can often be tailored to fit the irregular working patterns and diverse financial needs of this population. Some of the key flexible benefits to consider include:

Flexible scheduling: This arrangement allows employees to choose their work hours within certain limits set by the employer, such as selecting specific days of the week, times of day, or the number of hours they work. This flexibility can be crucial for individuals who juggle multiple jobs, school, or family commitments, helping them to better manage work-life balance and reduce stress.
Pro-rated benefits based on hours worked: Employers can offer benefits like health insurance, paid time off, and retirement plans on a scale based on the number of hours worked. The more hours an employee works, the greater their benefits. This system rewards part-time and temporary workers proportionally for their time, making employment with the organization more attractive and equitable.
Health Savings Accounts (HSAs): For part-time employees that have access to health insurance coverage, a HSA paired with a High Deductible Health Plan (HDHP) may be an ideal option. Certain organizations with a large base of part-time employees offer such coverage, including UPS, JPMorgan Chase, and Starbucks. HSAs are tax-advantaged accounts that employees can use to pay for qualified medical expenses. Contributions can be made by either the employer or employee and are often prorated based on hours worked. Pairing HSAs with HDHPs is especially beneficial for employees who may not qualify for full health insurance benefits but still need a way to manage medical expenses tax-free.
Workplace emergency savings programs: These designated savings accounts offered by employers, which employees can contribute to directly from their paycheck, are specifically intended for unplanned expenses. Employers may also contribute matching amounts or seed money to encourage participation. Having access to emergency funds helps reduce financial stress by providing a buffer to handle unexpected costs without resorting to high-interest loans or credit cards.
Child care assistance: This benefit could include on-site child care facilities, subsidies for external child care services, or flexible spending accounts for child care expenses. Child care assistance helps relieve a significant personal and financial burden for working parents, potentially increasing their ability to work more hours or remain with the employer longer.
Retirement savings for long-term, part-time employees: The SECURE 2.0 Act includes provisions designed to enhance retirement security for long-term part-time (LTPT) workers. Under the new guidelines, part-time employees that meet certain criteria become eligible to participate in employer-sponsored 401(k) or 403(b) plans subject to ERISA after two years of working a minimum of 500 hours per year.

Financial education and resources

Providing education about financial management can empower non-traditional workers to navigate their finances effectively. Consider offering:

Financial literacy workshops: Educating workers on budgeting, saving, and investing can empower them with the knowledge needed to improve their financial well-being.
Personalized coaching: Provide employees with direct, one-on-one sessions with a financial coach. These sessions can be tailored to address specific financial concerns like budgeting, debt management, savings strategies, and planning for future financial goals.
Online tools and resources: Offering tools for budget management, financial planning, and tracking savings progress can encourage fiscally responsible behaviors.

Portable benefits solutions

Portable benefits are particularly beneficial for the modern worker that changes jobs with some frequency. These benefits are connected to the individual instead of the employer and are designed to follow workers across different jobs and employment scenarios. Portable options offer much-needed security and continuity for temporary and part-time employees. While employers don’t have a direct hand in establishing many portable benefits for employees, there are certain provisions they can offer to help support portability and accessibility of benefits. Some examples of portable benefits include:

Emergency savings accounts (ESAs): Many ESAs, especially out-of-plan accounts that are separate from retirement savings, are portable emergency funds that are designed to help employees set aside funds for unexpected expenses. These accounts typically remain with the employee even if they change jobs, ensuring more financial stability and peace of mind.
Portable health insurance: Individual health insurance plans obtained through the U.S. Health Insurance Marketplace under the Affordable Care Act (ACA) allow employees to maintain their health coverage without interruption when they switch employers or move between full-time and part-time status. This type of insurance is not tied to any specific employer and is managed individually by the employee. Small businesses with less than 50 full-time employees can offer Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), which is a health cost reimbursement plan that reimburses employees for qualified healthcare-related costs, enabling employees to maintain portable health insurance coverage while assisting them with the associated costs.
Portable retirement accounts: When changing employers, employees with 401(k) or 403(b) plans can transfer all vested funds into a new retirement plan without creating a taxable event. In this context, the retirement savings are portable, though the money does need to be moved to a new account. Employer-contributed funds can be rolled into a new retirement account once they are vested.
Health savings accounts (HSAs): If an employee will have a HDHP when moving to a new job, they can carry over their HSA balance into a new HSA account with their new employer. However, it is likely that their health insurance coverage will change and they may no longer be enrolled in a HDHP after moving employers.

Collaboration with third-party providers

Fintech companies and financial wellness platforms like BrightSide, Truist Momentum, and MySecureAdvantage offer a range of tailored solutions that can be particularly useful for non-traditional workers. By collaborating with these third-party providers, employers can enhance their financial wellness offerings with tools like:

Tailored financial apps: Budgeting and savings apps can be customized for irregular income patterns, offering tools that help manage financial volatility.
On-demand financial advice: Access to financial advice on a flexible basis can help workers make informed decisions about their finances without the commitment of traditional financial advisory services.
Debt management and consolidation services: Help employees manage or reduce debt through strategies like consolidation loans or personalized repayment plans. Providers like SoFi offer solutions specifically geared towards debt consolidation and management.

Engagement and communication strategies

Organizations can make sure they’re reaching part-time and temporary employees by employing effective communication strategies to educate them about the financial wellness solutions they have available. By sharing financial strategies and resources through regular communication with non-traditional employees, companies can better support their financial wellness. This can include:

Targeted messaging: Tailor messages with information that addresses specific financial challenges faced by non-traditional workers.
Mobile-friendly solutions: Since many part-time workers may rely on mobile devices for communication, make sure all outreach efforts about financial wellness resources are mobile-accessible.
Personalized outreach: Use data from HR systems to send customized emails that address individual employee needs and interests. For example, if an employee has recently accessed information about HSAs, follow up with more detailed information about how to maximize this benefit.
Behavioral outreach: Trigger emails based on specific employee behaviors or milestones. For example, send a congratulatory email with more savings tips when an employee contributes to their 401(k) or reaches a savings milestone.

Fostering financial wellness for part-time and temporary workers

Providing thoughtful and well-structured financial wellness solutions for part-time and temporary workers is more crucial than ever. Through these initiatives, organizations can not only attract and retain diverse talent, but also make a significant impact on the financial stability and engagement of non-traditional employees.