Financial stress is taking its toll on US workers’ physical and mental well-being, self-esteem, and relationships at home. Financial challenges can also impact employees’ ability to be engaged at work, affecting their productivity and engagement and, in some cases, resulting in increased turnover rates. That’s not good for any business’s bottom line, and employers must do more.
Our recent research reveals that only 26% of businesses have a program or an initiative to improve employee financial wellness, despite widespread awareness of its importance. In this article, we’ll explore the concept of employee financial wellness, why it’s vital to corporate success, and consider some strategies for implementing an impactful financial wellness program.
Employee financial wellness programs are initiatives aimed at helping employees better manage their finances and reduce their financial stress. The best financial wellness programs combine tools to support their goals, and financial literacy education with coaching to empower and assist them with their financial lives.
A recent global survey reveals that approximately 36% of C-suite executives acknowledge that investment in employee health and well-being delivers a measurable business return. The same research suggests that financial wellness initiatives are as effective as health-centric wellness programs, particularly when positively impacting workers’ behavior. Let’s explore the business advantages of helping employees effectively manage their financial lives:
Employees who are fretting about money and feel out of control of their financial life are unlikely to try new things or come up with new ideas or approaches, both of which are critical to organizational innovation. In addition, financial stress causes many people to become irritable or withdrawn, leading to ineffective communication and collaboration between colleagues and even workplace conflict. This can spell disaster for customer facing roles and isn’t conducive to business or revenue growth.
The World Economic Forum (WEF) estimates that poor mental health results in lost employee productivity of $1 trillion annually. Psychological issues can also manifest in physical symptoms, including headaches, digestive issues, muscle tension and pain, and insomnia. Some workers may even turn to unhealthy coping mechanisms like drugs or alcohol. Ultimately, less-stressed employees perform their jobs better and make fewer mistakes.
PwC’s recent Employee Financial Wellness Survey found that 38% of workers stressed about their financial life are actively searching for jobs elsewhere, and 75% of those employees are looking for organizations that “care more about their financial well-being.” Companies that offer financial wellness programs are more likely to retain their employees, which avoids unnecessary expenditure on recruitment and training and the unrecoverable loss of skills and institutional knowledge.
Here are some common elements of an employee financial wellness program:
Today, there are diverse software solutions available that can help employees improve their financial health. These solutions offer personalized budgeting and savings tools, counseling, and e-learning to help people build sound financial habits and grow their financial acumen.
Lunch and learn sessions allow attendees to expand their knowledge and develop their financial literacy. These can be one-off events or run over a few days. Ideally, such sessions should be accessible to all employees, not just a selected group, so accommodate various shifts.
Employee discount programs let workers access different products and services at a discounted rate. The discounts can include items and services such as gas, medical prescriptions, and movie tickets. Discount programs are a great way to help employees cut down on costs while accessing essential products, services, and amenities.
Offering earned wage access (EWA) gives workers much-needed relief. EWA gives employees timely access to already earned but unpaid wages . It provides immediate access to cash for those with an emergency, and helps those living paycheck to paycheck make ends meet between paydays. EWA isn’t a loan, doesn’t affect credit scores, and there is no credit impact. The amount that a worker accesses is deducted from their next paycheck, meaning there are no repayment processes required.
Now that we’ve shared some ideas on what your employee financial wellness program might comprise, let’s consider some ways to ensure yours delivers the outcomes you’re seeking:
Relevance can be key to employees taking advantage of your financial wellness benefits. Your program needs to be customizable for the individual and connect with them on a particular level for them to take that first step of adoption. A “one size fits all approach” is more likely to turn them off than pique their interest.
Once you’ve settled on your program, spread the word among your workforce – after all, your employees will only benefit from a financial wellness program if they’re aware of it and know how to use it. We recommend a multi-channel approach to inform employees of the new offering, including email and company newsletters. Also, encourage managers to mention it in team meetings and one-on-ones. For “deskless” employees working on sites or in manufacturing plants, consider using noticeboards, posters, and brochures to introduce your new financial wellness benefits.
Once you’ve implemented your program, you need to track adoption levels and impact. Our research into this area reveals that companies considered financial wellness “leaders” are more likely to measure the success of their financial wellness initiatives through various metrics. We found the most common metrics that organizations track and measure are:
By investing in a relevant employee financial wellness program, companies also invest in their success. Those leading the charge approach financial wellness from an employee-centric point-of-view, offering solutions that meet employees where they are at and seeing tangible business benefits on turnover, morale, and productivity.
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