Now, more than ever, companies are doing everything they can to provide an ideal work environment that not only attracts new employees, but also retains the good ones. Whether it’s weekly catered lunches, a pet-friendly workspace, or a break room with bean bag chairs and a foosball table, nurturing a positive culture is becoming a top priority for many organizations.
While all these things are great (I’m not one to turn down a free meal), employers are noticing a new factor that may be affecting employee happiness and productivity; financial stress.
With 71% of employees citing personal finances as their top source of stress, companies are seeking ways to give them the support they need. That’s why offering a financial wellness program as an employee benefit is a growing trend in 2017.
What is a Financial Wellness Program?
For years, offering support when it comes to setting up retirement plans or taking advantage of a 401(k) match has become a norm in most companies. However, it is becoming more evident that employees’ needs are more deeply rooted than this.
Saving for retirement is only one piece of the financial puzzle. What about the staff that are dodging calls from collectors? Or those with double digits in their bank account and two weeks to payday?
Financial wellness programs are designed to assist employees in the areas that are causing the most stress and worry. This includes helping with debt elimination, budgeting, building savings, prepping for emergencies, and planning for retirement.
76% of Americans are living paycheck to paycheck and no money to cover an emergency if it were to arise. This burden can have a negative effect that might follow them into the workplace.
So what should an employer seek in a financial wellness program? A good program does 3 things:
Educates employees on the financial basics and the value of building strong money habits.
Empowers employees to make adjustments in their behavior to create ongoing change.
Coaches employees on their individual needs. Personal finance is personal and should be treated as such.
These programs are not meant to yield overnight results. Instead, they promote and foster ongoing change in how we make decisions in our day-to-day lives.
Why Are Employers Stepping In?
So why would an employer step in to help employees with their money?
A study conducted by the Consumer Financial Protection Bureau (CFPB) found that 40% of employees find it difficult to pay their monthly household expenses on time.
Because of this, and other financial struggles, 24% of workers admit their personal finances have been a distraction at work, with 81% saying it has affected their productivity.
These results haven’t only been cited by the employees, but also upper management. The same study found 61% of HR professionals stated financial stress has some impact on employee work performance.
Solving this problem can yield a significant return. Many employers receive an estimated ROI of up to $3 for every $1 spent on financial wellness programs like ones described above.
Giving employees access to financial support can also show that their company cares about them. This in turn can build loyalty, reduce turnover, and attract new and high quality staff.
Who is Implementing Them and Who Benefits?
A recent survey conducted by Aon Hewitt found that 59% of employers said they are very likely to focus on improving the financial well-being of their workers this year in ways that extend beyond retirement decisions (a big jump from the 30% reported in 2014).
So why the increased interest in these programs? Studies show numerous benefits for both the employer and employees.
Employees have reported lower stress, better health, greater financial confidence, and increased job satisfaction. Employers cited increased employee morale, lower turnover rates, reduced HR costs, and a decrease in employee absenteeism.
There are many financial needs within a company, regardless of an employee’s age. Baby boomers need advice as they transition into retirement and how to make their money last; Generation X is faced with various financial stresses including large credit card debt and retirement planning; while millennials are dealing with more student loan debt than ever before.
How Do I Start a Financial Wellness Program?
If you’re an employer or HR representative, do some research to find a company that fits your needs. Remember to find one that educates, empowers, and coaches.
A vital part of this format is the human engagement. We can’t expect our employees to find their way to wellness through an app on their phone. Find a program that offers personalized financial coaching to guide your staff as they make positive life changes.
If you’re an employee, reach out to your HR department and ask if there is a program already in place at your office. Many people are shocked to learn their company already offers financial support.
If they don’t, share these statistics with them and ask if they might consider adding one. If you’d like for me to contact your company to provide more information, email me at firstname.lastname@example.org.
If you’re an employer, click here to learn more about a financial wellness program that educates, empowers, and coaches employees to financial success.