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Improving employees’ financial wellness is top of mind for many employers. Just ten years ago this wouldn’t have been much of a conversation. But with the pandemic and competitive job market, employers have more pressure to support employee financial wellness.
Financial wellness, also referred to as financial well-being, includes a variety of factors that relate to an individual’s current standing and relationship with money. Those who are doing financially well have the freedom and ability to handle their present and future financial needs.
Financial wellness has become more complex over time. As consumers have easier access to student loans, lines of credit, buying homes, and investing — their financial wellness becomes at risk. And as automation and technology make buying a variety of goods easier, accumulating too much debt is a common problem.
Employee financial wellness can be directly impacted by an employer and the financial wellness benefits they may or may not provide—as a result, it’s very important for businesses to understand financial wellness.
Poor employee financial wellness impacts an organization’s bottom line.
According to a survey done last year by PwC, financial or money matters cause the most stress among employees and 38% of workers report that they have less than a thousand dollars in savings to deal with emergency expenses.
As many of us have felt before, financial stress causes emotional stress which can lead to health concerns. As a result, an employee’s overall well-being includes their mental, physical, and financial well-being. When an employee is financially well, it’s likely their health is better, which means reduced healthcare costs for employers.
Employees who are stressed about their finances will also have poor performance and turnover in your organization. If an employee feels financially secure the opposite results — they’re more likely to be loyal to a company and productive in their role.
Offering financial wellness support as an employer helps attract and retain employees.
Another survey done by Franklin Templeton Investments found that workers today place equal importance on their mental, physical, and financial well-being. However, they feel least in control of their financial health.
As a result, employers who offer programs or support for their employees’ financial wellness have a competitive advantage in the marketplace for workers. In other words, providing financial wellness benefits can be used as a recruitment and retention tool.
To go about improving your employee’s financial wellness, focus on the following three key actions.
There are numerous benefits you can provide your employees that also aid their financial well-being. Though you don’t have to provide all of these, here are some of the most common financial wellness benefits:
One of the challenges we all face when dealing with finances is how knowledgeable we are about money. More education is needed to improve financial literacy. When you provide any of the benefits above, education on those programs will be a necessary step in the process. To make this easier, choose a benefits provider or HR partner who can support your benefits.
Some financial consultants are available to come to your workplace to talk to your team and employees one-on-one about their financial needs. Depending on the employee, they can talk through topics like budgeting, saving, investing, and paying off or managing debt.
One simple, low-cost way to let employees know you care about their financial outlook and keep them engaged is to provide some resources where they can personalize their learnings. For example, there are a variety of free tools or platforms you could promote to help them calculate budgets or hit savings goals.
There are many financial burdens that life may bring. Take note of your employees’ life stages and work with any of your benefits providers to help them transition through particularly stressful financial moments. The birth or adoption of a child, buying a home, going back to school, and retirement can be exciting but financially stressful experiences.
Taking the steps above will support, educate, and transition employees through financial burdens so they maintain their financial wellness — or at the least — reduce financial stress. Focusing on your benefits and how you can improve employee financial wellness is a great way to take care of your employees and gain a competitive advantage in the job market. To learn more about how you can improve your overall employee benefits, download this eGuide.