What is financial wellness?
Financial wellness can be defined as a state where one is able to meet routine expenses, address financial challenges and stay prepared for financial emergencies. Financial security, financial dignity and financial savings go hand in hand with financial wellness. Perhaps the strongest indicator of achieving a state of financial wellness is having the freedom and choice to say no to alternative financial services that are predatory in nature.
Globally, business communities are recognizing the implications of financial stress in the workplace and are turning to financial wellness programs to alleviate this type of stress. The understanding is that a financially healthy workforce is profitable for businesses and their bottom lines.
Why employee financial wellness programs?
According to the Consumer Financial Protection Bureau (CFPB) 7 out of 10 American workers reported financial anxiety as the most common cause of stress. For businesses it mean that employees are bringing their financial stress to work which translates to losses in productivity and lowered engagement at work.
Picture a situation where it is the beginning of the week and John is $200 short of making his monthly rent due on Wednesday, but does not get paid until Friday – if John is late this month he will be penalized 10% of his rent. John is financially stressed. Now imagine John coming to work in this state – he is distracted and is constantly worrying about that $200 which is causing his productivity to fall. John may even consider taking the day off to make alternative arrangements for the money. The impact on the business resulting from John’s financial situation is a fall in productivity and an increase in absenteeism. And if more than half your workforce is financially stressed, the impact are magnified.
Employees are experiencing the burden of financial stress and are looking for an employer endorsed solution. Therefore, an employee financial wellness program is a win-win for both parties.
How to make financial wellness programs successful at your company?
Offering the program is the easy part – getting employees to use it to their benefit is the real challenge. Even after human resource managers invest heavily in planning and implementation, there is no guarantee that employee uptake and usage will be promising. So, how can HR increase program enrollment and usage? Based on our experience, here are some tips for increasing workplace financial wellness program uptake to end financial stress in the workplace.
1. Employee awareness
Employees are often unaware of the benefits offered by their company or how the benefit works because its true value was not communicated effectively. This can be fixed easily by periodic awareness campaigns of the programs offered by the company. When the tangible benefits of a program are shown clearly, employers can count on an uptick in the overall morale at the workplace.
2. Explainer video
If employees are unable to see the simplicity of a program immediately, they may feel the benefit is not worth the trouble. Some may feel embarrassed to seek clarification and choose to not even use the benefit program. A short explainer video highlighting practical usage is most effective during adoption stages.
3. Easy and timely access
Today, smartphones are more affordable and accessible than ever. Employees are more likely to use a benefit program they can access anywhere rather than one that requires logging into a web portal or scheduling a consultation. Employees are on the go and value information that is easily obtainable and readily available. Whether it is seeking financial advice, using budgeting tools, or analyzing spending trends, employees want information at their finger-tips.
4. Privacy and financial dignity
Since financial wellness is a sensitive area for employees, privacy and discretion are very important. Employees may hesitate to use a program if it means sharing their personal financial details with a person hired by their employer. A program that allows employees to use financial tools independently to gain financial resilience is more likely to be used liberally than one which requires constant interaction with a wellness guru.
5. A program that is actionable
While many programs check off the financial wellness box and provide guidance, but only programs that provide real actionable solutions for employees can effectively improve recruiting and retention numbers. If the financial wellness program is truly valuable to employees, they will think twice before leaving for a small raise at another company.
The Take Away
It is clear that employees have the desire to improve their financial lives – what they need is a solution that reduces day-to-day money worries as well as helps prepare for tomorrow. A holistic financial wellness solution.
Holistic Financial Wellness
Learn how PayActiv measurably reduces employee financial stress and employee turnover.