The New Must-Have Workplace Benefit: Financial Wellness

The search for quality staff is constant, and companies who offer employees access to helpful financial wellness programs can attract the best people.

If you’re a small business owner, you already compensate employees competitively and offer healthcare and benefits to show people you care. But are you also providing them with the knowledge and skills to maintain their financial wellness?

Providing employer financial wellness programs can ensure your employees are set up to achieve their financial goals—and your business remains competitive in the labor market. Learn how to get started and measure real success across your labor force.

What is Financial Wellness in the Workplace?

Financial wellness boils down to knowing what you can afford to spend, how taxes work, and how to save and invest well. Yet this knowledge is lacking for many workers across the country. When employees don't understand basic financial principles, their actions don't align with sound financial behaviors. Because many Americans are not given a formal education in personal finance, sometimes they can struggle to manage money well.

That’s why business leaders or HR teams often set up employee financial wellness programs. When done well, they can serve as a springboard to better personal finance habits and goals for your staff.

Why Financial Wellness is a Workplace Winner for Small Business

Almost 70% of workers identified retirement benefits as a critical factor in considering a job offer, and a further 62% said such benefits were critical for staying in a job, according to an international survey by the National Association of Plan Advisors.

Benefits matter for early-career workers too. In fact, 63% of under-40 workers told a Wills Towers Watson survey that their retirement program was an important factor in accepting a job—a large jump up from 28% in 2009.

These findings suggest financial wellness programs could become a secret weapon for employee retention and attraction across this decade.

You may think such programs are only for large organizations. In fact, smaller organizations are often well-positioned to offer employees more tailored attention. Because they know their employees well, they also know what worries they have and what resources they may need.

Starting Employer Financial Wellness Programs

Getting started with a small business financial wellness program doesn't have to mean starting from scratch or going it alone. A small business may be able to approach a local financial planner with a partnership opportunity where employees receive a service discount.

For remote workforces, you can also set up a resource hub, webinars, or online tools for employees to explore areas such as budgeting, calculating mortgages or maximizing tax deductions.

You can also seek out organizations that offer free financial literacy workshops as an easy way to offer classes to your employees. There are several financial literacy organizations around the country that can provide insight or resources. Call local certified financial planners and see what they have to offer.

Financial Wellness Surveys

If you’re a small business leader who is unsure how to create a financial wellness program, start by asking your employees. Find out what resources they would find useful. It's a good way to ensure you're not making assumptions about their financial needs. Employees will have different lifestyles and obligations. You’ll never learn what they are unless you give people a good environment to share their situation.

And here’s an important tip: do this more than once. Organizations that conduct biannual financial wellness employee surveys are often better prepared to offer resources around timely topics like tax tips or seasonal budgeting. You can't address these ongoing needs without continually checking in.

Look at Budgeting, Taxes, and Retirement

Once you've heard from your employees, it's important to tailor your resources to their needs. If your workforce is mostly single people in their 20s, then social security may not be at the top of their priorities. On the other hand, if pre-retirees make up a large part of your workforce, then classes on credit scores might be covering things they likely already know.

Everyone wins when employees genuinely understand terms in their insurance policies, how their 401(k) or IRA works, how to budget, and what they can do with any money that’s left over at the end of the month. That’s because everyone wants financial security. When you get financial wellness programs right, you can give staff a confidence boost. Often, this peace of mind, leads to a more reliable colleague who contributes so much more at work.

Measuring Financial Wellness in Small Businesses

Not every positive impact of a workplace financial wellness program is measurable. But it's important to be on the lookout for observable gains in your workforce once you've gotten your program off the ground.

Studies show employees who have better money habits:

• Better understand financial principles
• Are less stressed
• Are more productive
• Are happier

Compare an employee who is burdened with debt and at-risk of missing rent or other payments to the person who has enough of a financial cushion saved to pay bills for six months if something catastrophic happened. Who is likely to be the more engaged, more productive employee?

Ultimately, how you measure success is up to you. It could be something as simple as an increase in plan participants. Or maybe it's an uptick in employee contributions to various retirement options. The point is to have that measurable value where you can track a program's effects and make adjustments as needed.

The Time is Now

Financial wellness is no longer a fringe perk or an idea that companies should reserve for retirement-age employees. It has moved from a nice-to-have to a must-have for businesses big and small. Implementing your own financial wellness program this year could keep more of your employees engaged, lift productivity, and give company culture a boost.