A recent survey from Country Financial found that 67% of Americans say that they are worried about their financial future. Thus, as an employer, it is guaranteed that at least some of your employees are stressed about money. Though money woes may seem like more of a personal issue, employers are beginning to realize that when employees are stressed about finances, it can impact the workplace as well. That is why financial wellness programs are on the rise.
A financial wellness program is a program that aims to support and educate employees in order to improve their financial wellbeing. These programs provide employees with resources and tools that they need to improve financial management skills, manage debt, and plan for the future. They can be greatly beneficial for employees and employers alike, but many companies are still not offering these benefits. Small businesses are particularly lacking, with a reported 49% of firms with fewer than 10,000 employees not offering any sort of program.
As an employer, here are some things you should know about financial wellness programs.
Benefits of Financial Wellness Programs
- Improved hiring and retention: Financial wellness programs are attractive to potential and current employees, so companies that offer them will enjoy an improvement in hiring and retention. A MetLife study found that when financial wellness programs are offered, 51% of employees are more likely to accept a job with a new employer and 53% more likely to be loyal to their current employer.
- Improved employee engagement and productivity. The stress that employees feel from financial concerns can take a great toll on their ability to be engaged and productive at work, which in turn affects the overall wellness of the company. The Financial Fitness Group found that for every 100 employees, a company loses 22.5 workdays of productivity a year as a result of financial stress. Furthermore, a survey from Mercer found that employees spend about 150 hours of work time per year worrying about money. Offering financial wellness benefits can greatly reduce this stress, improving employee engagement and productivity, and ultimately boosting the bottom line.
- Reduced healthcare costs. Believe it or not, financial distress can cause a negative toll on employees’ physical health as well. This could lead to higher health insurance premiums for employers. Investing some time and money into offering financial wellness benefits can positively impact employees’ health and proactively reduce the burden of healthcare costs on the employer.
Areas to Focus On
- Future planning: Many employees are stressed about their financial futures, especially retirement. In fact, Country Financial found that 1 in 3 Americans feel that their finances have not recovered, or never will recover, from the 2008 financial crisis. Many employees are planning to retire later in life as a result. Employers can help employees by not only providing solid retirement benefits but by ensuring that employees know how to take full advantage of these benefits.
- Budgeting: Many employees are ill-prepared to deal with financial emergencies, such as an unexpected auto repair. Financial wellness programs should include educating around budgeting skills, as well as access to tools that can help employees manage their budgets, such as Mint.
- Financial literacy: Employers should provide regular education on topics that will help employees successfully manage and improve their finances, including debt management, taxes, theft prevention, and more. This education can take place through online courses, lunch-and-learns, monthly workshops, and individual or group counseling.
Tips for Financial Wellness Programs
- Make the program accessible. Offering a financial wellness program is meaningless if employees aren’t taking full advantage of it. Make all aspects of the program easy to access by offering both digital and in-person touchpoints. In addition, ensure that reminders are scheduled in a timely fashion, informing employees about tools and supports that are available relative to the timing in the year, such as during tax season.
- Appoint HR as the champion, but get buy-in from the whole team. According to the Employee Benefit Research Institute, 4 out of 5 companies said that HR will be the champions of implementing financial wellness initiatives. Having the HR team spearhead these initiatives will ensure that someone is held accountable for carrying out the program and engaging employees. That being said, there should be buy-in from all team members, especially executives, who should lead by example by fully participating in the benefits and programs.
- Define goals and measure success. Before defining goals, make a point to survey employees about what benefits would actually benefit them. Then, as you begin to plan and implement the program, be sure to establish metrics of success so the program can be continuously improved. Do this by establishing some sort of benchmark of existing financial wellness among employees, and then measuring against that benchmark in the future to see how financial wellness is improving.
Now, you should have a better idea of why financial wellness programs are important, and how you can go about offering one at your workplace. While these programs are of course beneficial for employees, they are also extremely beneficial for employers as well, and can ultimately improve the bottom line. Still, they can be difficult to plan and implement. If you are interested in learning more specifically about how Navigate can help with matters such as this in 2019, contact us today to request a free HR consultation.