Hardship funds are built with good intentions, but they often provide too little relief for the financially struggling while adding too much administrative burden for employers. Read on to explore the hard truth behind hardship funds, and how Brightside Financial Care changes that with an innovative approach that delivers meaningful impact for employees and employers.
The hard truth about hardship funds: Why they fall short
1. Employees need full financial support
Hardship funds are well-intended, but their specific qualifying uses and limited grant amounts aren’t typically enough to help employees deal with the full impact of a specific hardship event, let alone their other financial challenges.
With 70% of employees not financially healthy, they are living paycheck-to-paycheck, struggling with no savings, debt, a low credit score, and a lack of affordable borrowing options – all of which are exacerbated when hardship hits. Those struggling with higher living costs and lower household incomes need even more robust longer-term financial support to deal with a hardship alongside their other financial needs. For example, they may be eligible for resources that assist with housing, utilities, food, transportation, and childcare expenses, but they don’t know how to navigate or access them.
Until the root causes of poor financial health are addressed, employers will pay for it in the form of higher healthcare costs, absenteeism, disengagement, compromised workplace safety, and turnover.
2. Hardship fund administration is a burden
Many employers still rely on manual and paper-based hardship fund processes including applications and supporting documentation that must be printed and submitted via fax or mail; manual application review and decision processes; funds issuance by paper check, and/or manual payroll deductions. These are time-consuming, costly, and frustrating for all involved, eroding the actual and perceived value of the hardship program.
Additionally, HR leaders managing hardship programs must decide who qualifies for assistance while keeping applicants’ identities confidential. While privacy is essential to encourage employees to seek help without shame, it also creates a barrier to proactively helping employees who need more support than the hardship fund provides and/or aren’t approved to access hardship funds.
Hardship funds + Brightside Financial Care: Maximum impact, zero headaches
Brightside Financial Care transforms your hardship funds into 360° integrated support that addresses all employees’ financial needs, acts as the front door to your other employee benefits, and takes the burden off your HR teams.
Approved or not, most employees’ financial needs go beyond a single hardship event – 97% of those who apply for hardship funds through Brightside work with us for additional financial support. Our empathetic Financial Assistants meet employees where they are to help them find and navigate to real solutions for all their financial challenges, including a hardship fund when relevant. Our innovative platform of carefully vetted solutions includes free and/or affordable resources for urgent needs and financial shocks, debt, credit management, student loan support, spending and savings accounts, and more.
How Brightside removes the pain points from hardship funds:
1. Expand employee financial support
Expand reach, engage more employees, and improve outcomes by integrating your hardship fund with Brightside Financial Care for ongoing comprehensive financial support that includes hardships and extends beyond them.
2. Improve hardship fund application and denial experiences
Simplify applications with personalized, tech-enabled support that guides employees through program details, eligibility, and documentation requirements. Even those who don’t meet the hardship fund application criterion can connect with a Brightside Financial Assistant who will work quickly to help them identify alternative solutions for their hardship and surrounding needs.
3. Streamline fund approval and disbursement processes
Preliminary screening and application support simplify processing for employees and HR teams. Brightside also applies eligibility rules to flag “gray area” cases, making approvals more efficient. Funds are disbursed instantly through an FBO account, giving employees immediate access via a free Brightside Spending Account.
4. Understand impact and opportunities
Receive insights, consulting, and impact analysis to maximize the efficacy of hardship programs and optimize your employee financial health support.
Brightside can also put you in touch with one of our trusted partners if you want to set up a hardship fund or offload fund administration and management completely.
Hardship support that delivers results
Employers who trust Brightside Financial Care to support their employees’ financial needs, including hardships, see measurable results including:
- 40% of employees who seek help from hardship funds have an income of more than $50,000, underscoring the value of financial support across pay bands.
- 39% lower turnover among employees who engage with Brightside for help navigating hardships, creating significant savings for employers.
Aria’s story: When needs exceed hardship fund limits
Aria, a certified nursing assistant and mother of four, lost two weeks of income due to illness. Not only did she fall behind on her bills, she received notice that her landlord no longer wanted to rent the property, and that she’d have to move. Overwhelmed and unsure what to do next, Aria called her Brightside Financial Care benefit. She and her Brightside Financial Assistant worked together to:
Access hardship funds: Aria’s Brightside Financial Assistant helped her understand and navigate her employer’s hardship fund, including applying for and securing $1,800 to catch up on her electric bill and car payments.
Connect with community resources: Aria’s Financial Assistant identified a local nonprofit that would provide $1,200 for a security deposit so she could move into a new place.
Improve her credit: She and her Financial Assistant developed a credit-building strategy to raise her credit score, including quick fixes like paying off credit cards twice a month.
“My Financial Assistant has helped me so much. It’s just been such a struggle, and I feel like finally everything is trickling into place.”- Aria
Raven’s story: Support when hardship funds aren’t an option
When Raven, a patient authorization rep and single mother of two, took time off work to care for her hospitalized son, she quickly exhausted her financial resources. She applied for her employer’s hardship fund but didn’t qualify because she wasn’t behind on bills. Desperate for solutions before things got worse, she reached out to her Brightside Financial Care benefit and worked with her Financial Assistant to:
- Address urgent needs: First, Raven’s Brightside Financial Assistant explored opportunities to triage her immediate needs, helping her secure $500 for emergency food assistance.
- Access community resources: Her Financial Assistant also helped Raven apply for and secure EBT support to help with monthly food costs and additional childcare aid that saved Raven $100 a month.
- Receive ongoing support: Raven meets with her Financial Assistant monthly to continue to explore options for her son’s declined application for disability support and take other steps toward resilience, so she doesn’t have to navigate her financial challenges alone.
Let’s improve your hardship fund together
Partnering with Brightside Financial Care amplifies the impact of your hardship programs, lightens the load on your team, and ensures every investment in employee financial health delivers results.
Click here to learn more or book a meeting today.
