September 22, 2023
Over the past few years, you may have heard of financial wellness from gurus, business executives, and HR personnel. While it may sound like a buzzword, there’s a good reason why employers nowadays should look into this increasingly necessary benefit—especially since the economic fallout caused by the pandemic is showing no signs of slowing down.
As the cost of living blows up and pension plans decline, financial insecurity is looming over everyone’s head. There’s no doubt that your employees are experiencing a significant amount of stress due to economic uncertainty. With stress comes a sharp dip in their productivity and frequent absenteeism, which, in the long run, results in lower output and profitability.
The financial wellness of your employees definitely isn’t an issue to take lightly. The good news is that, as an employer, you are in the perfect position to help.
If you’re still on the fence about creating financial wellness programs for your employees, here are reasons why you should prioritise this benefit in 2023.
The article emphasises the importance of financial wellness programs in improving employee productivity, reducing stress and healthcare costs, enhancing recruitment and retention, and fostering a supportive company culture.
One of the most notable benefits employers like you will enjoy when you have financial wellness programs in place in your workplace is the increase in employee productivity.
Hiring financial wellness coaches that can teach them how to build wealth or pay off their debts can help minimise personal financial hardships and the distractions they create. You can even look into programs such as budget counseling or student loan repayment support. According to recent stats, up to 43.4 million borrowers collectively have over $1.76 trillion in student loan debt.
With comprehensive financial wellness programs, you can lessen the disruptions due to concerns over their debt, such as calls from collection agencies, extended breaks to deal with late credit card payments, and extra days off to deal with bad credit when looking for housing.
So maybe you already took a step toward improving your employees’ overall health by offering remote work benefits. Why not go above and beyond with employee financial wellness programs? Money remains one of the leading causes of stress.
While temporary stress can cause sweaty palms and elevated heart rates, chronic stress leads to symptoms such as increased fatigue, difficulty concentrating, and heightened irritability. Plus, we can’t forget to mention the physical manifestations of prolonged stress, such as headaches and increased susceptibility to serious diseases.
The diseases listed above and other illnesses can directly affect your employees’ productivity, but the effects on your business go beyond that.
Employers have an obligation to their employees’ health. Unfortunately, this means that you may run into unexpected financial risks, as you’ll need to pay extra for health insurance to support them in managing these conditions. Sadly, they might require continuous medical care if the underlying issue of financial stress doesn't get better.
Another benefit of financial wellness programs is that they can help reduce instances of your employees going absent. You don’t have to worry about them missing work to research the best stock to add to their 401(k) plan.
Situations like frozen bank accounts for an overdraft, their car being repossessed, or needing to look for a new apartment because their rent payment bounced are what you have to look out for.
These scenarios can be reduced with the use of debt management, budget counseling, and bank account education, which most financial wellness programs and institutions offer.
Financial wellness programs that include credit building and debt reduction services help your employees build more stable and secure financial lives. A likely result that will come out of this is a rise in employee homeownership, which in turn promotes longer tenure at work.
Plus, offering a program that emphasises the importance of saving for emergencies and both short- and long-term goals, allows your employees to develop sound financial practices that will enable them to take advantage of other benefits, like paid vacation days. An employee who can afford to take one or two vacations a year is considerably more likely to remain loyal to you.
As you may have already experienced in the past few years, the competition nowadays is fierce. What’s even more challenging and alarming is that job-hopping is becoming a common trend. Employers like you have to offer all the benefits and perks necessary to attract and retain top talent.
Benefits like employee financial wellness programs give your employees a strong sense of stability. That’s why a successful recruitment plan includes providing support for your employees’ finances.
This, in turn, makes younger generations of employees, like millennials and Gen Z, feel valued in the organisation. As a result, this leads to higher chances of recruitment in your company.
Financial wellness programs are also crucial in developing a caring and inclusive company culture.
These programs help level the playing field for all employee populations by empowering underrepresented groups—who are often more prone to experiencing financial stress—to gain financial confidence and enhance financial well-being for future generations.
Employees with better personal finance practices make fewer payroll advances, which saves HR time and reduces lost productivity. Managing payroll advances may or may not take up much time in your company, but it can be disheartening and even embarrassing for employees.
Financial wellness programs encourage basic personal financial practices and behaviors that reduce the likelihood that an employee may require a payroll advance.
Your financial wellness initiatives must be thorough and customised to your employees' needs and interests to be successful. Some of the programs you can provide are:
A great way to get started is to work together with a company that specialises in employee financial wellness. You can, for instance, decide on a partnership that offers your employees services and knowledge to assist them in better managing their finances.
There are several software solutions available that can help your employees with their financial situations. These solutions can provide everything from individualised coaching and on-demand financial assistance to focused training and e-learning.
Another way you can prioritise your employee’s financial wellness is to help them out in any way possible. This can include lending a hand with student loan repayment, providing fertility support, or donating toward adoption. Even free parking spaces and the occasional lunch are a good place to start, especially if you’re a small business.
Financial wellness is not a fad. Adding the right financial wellness benefit to your offerings will lead to substantial improvements in your employees’ financial and overall health, as well as their morale. In the long run, the benefits you’ll experience include a high return on investment due to increased performance, productivity, and retention.
For more insightful articles on finance, business, and productivity, check out Robin Waite’s blog!