Here are 4 benefits of workplace financial wellness programs and how to integrate a plan for your small business.
Workplace financial wellness programs are becoming a crucial initiative for forward-thinking employers. Not only do they provide measurable, achievable benefits for both employees and employers, but as they become more popular, workers will come to expect them.
In fact, nearly one in three U.S. employees said they would like their employers to provide more assistance to improve their financial health, according to a National Business Group on Health survey.
The need for these benefits has never been greater, with many people dealing with the financial fallout caused by the COVID-19 pandemic. In one recent survey from the National Endowment for Financial Education, 88% of Americans said that the COVID-19 crisis is causing stress on their personal finances.
If you’re wondering if a financial wellness program is a wise investment for your business, the timing couldn't be better. Here are some of the key bottom-line reasons why a financial wellness program should be on your priority list.
Improves Overall Worker Wellness
Financial stress can impact people’s physical and mental health and wellbeing. And when employees don’t feel well, they aren’t able to fully focus on work. And, think about this: If employees are dealing with money-induced stress, anxiety and depression, they are more likely to take time off of work. John Hancock’s Financial Stress survey estimates that businesses lose $2,169 in productivity and absenteeism per employee each year. Now multiply that by the number of employees you have, and you can see why offering financial resources might provide a return on your investment.
What's more, promoting a culture of wellness—that includes a financial wellness component—can encourage employees to feel comfortable in seeking assistance and guidance before their problems are exacerbated. If employers are able to reduce financial pressures on an ongoing basis, it may help prevent negative impacts on mental and physical well being.
Greater Employee Productivity and Satisfaction
With 50% of workers admitting that financial stress has been a distraction at work, per PwC’s Financial Wellness survey, giving them tools and resources to alleviate stress can help improve productivity. Plus, it can put workers in a better frame of mind to serve customers, converse with clients and complete creative projects. All of these workday tasks require concentration as well as a positive attitude, which can be difficult to muster if one is in a constant state of worry and stress.
If you need another data point, consider that 45% of workers in a survey by the National Financial Educators Council said they would have a more favorable opinion of their employer if they offered financial wellness programming. Satisfied employees are more likely to be engaged, and higher engagement leads to better performance. Employees who feel valued are also more likely to remain with the company for a longer period of time, thus improving your retention rate and reducing turnover. Plus, happy employees are infectious and can end up improving culture and morale across the whole company.
Better Financial Security for Workers
When people are living paycheck to paycheck, it’s hard to focus on big picture goals like saving for retirement. For instance, a 2019 report by the Federal Reserve showed that 37% of adults would not be able to cover a $400 emergency expense from savings.
It's no wonder then that more than half of Gen X has less than $100,000 in retirement savings, and more than half of millennials say they may dip into retirement savings to cover other expenses, according to PwC. Traditionally, employers' financial wellness was mostly focused on things like 401(k) match. While that's still a terrific benefit, imagine if you were also able to encourage employees to contribute more on their end?
Through educational seminars and workshops, employers that expand financial wellness benefits to include education and resources are doing a great service. In addition, help employees free up some money in their budgets to save more for retirement by helping to alleviate other financial pain points in their life (whether it's via a childcare stipend or debt counseling). By doing so, you will illustrate that you are on board to support their long-term financial health.
Strengthens Employer Brand
Attracting top talent is always a challenge, so anything that companies can do to differentiate themselves can ensure they stay competitive. Financial wellness is one area that can help with recruitment since it’s not something that's universally offered. Presenting candidates with a creative financial wellness approach can highlight that, as an employer, you are committed to their overall success beyond the workplace.
Employers with financial wellness offerings have something unique to promote in their job postings and on their career sites. This can help draw quality candidates into your talent pipeline, which in turn can improve your hiring program. Then, once new hires become proud employees, they will act as brand ambassadors, rating your company well on review sites, touting their satisfaction on social media platforms, and referring people in their network for other positions.
Establishing a workplace financial wellness program has many advantages for both your employees and your bottom line. Consider some of these key benefits as you make the case for implementing a holistic financial benefits package for your staffers.