Prioritizing financial wellness offers the following benefits to employees and organizations.
Improves Overall Productivity
In 2022, PwC’s Employee Financial Wellness Survey reported that financial challenges made 76% of surveyed employees less productive. Furthermore, 55% stated these issues distract them from work. These individuals spend three or more hours a week tackling financial difficulties at work.
Consider how employees are more productive when no financial concerns distract them from work and their employers provide clear guidance in managing their finances. eMoney notes higher productivity as a top benefit for organizations with financial wellness programs.
Boosts Retention Rates
There is a huge difference between establishing financial wellness programs and simply offering temporary solutions to financial challenges. Implementing the first has encouraged employees to search for companies that support financial well-being. According to PwC, 76% would work at organizations that consider financial wellness a priority.
When companies prioritize financial well-being, they can retain top talent. eMoney reported that organizations offering financial wellness programs saw higher employee retention (41%). Moreover, companies planning to develop these programs said retention is one key to a successful program (40%).
Promotes Better Mental & Emotional Well-being
Financial hardship could leave employees feeling more stressed and anxious. Take a look at the statistics below to find out how economic challenges affect well-being.
- 49% of employees said financial concerns had a negative impact on their mental health. (PwC)
- 35% stated they couldn’t report to work due to financial stress. (PwC)
- Employees with mental health issues caused by financial woes feel less motivated to address them. (PwC)
- 82% want to be more confident in making financial decisions. (John Hancock)
Additionally, financial stress affects a company’s bottom line, as it has led to a 26% rise in the cost of financial stress since 2019. Surprisngly, only 11% of companies have implemented financial wellness programs.
Organizations with these programs in place reported high employee morale, motivation, engagement, and attendance.
How Can Companies Help Employees Achieve Financial Wellness?
You can provide your employees with the necessary financial support through the following initiatives.
Offer a Financial Wellness Program
Financial wellness programs help workers manage expenses better and reduce their financial concerns, which can include counseling, coaching, and using a financial management platform.
Start by assesing your company’s needs and determine what the program should offer. Have a financial advisor and a financial plan provider assess these requirements before implementing your program.
Provide Employee Benefits that Promote Financial Wellness
Offering total rewards with benefits, compensation, and rewards that emphasize employee well-being can also help improve employees’ financial wellness. A total rewards package can include the following benefits:
- Legally mandated benefits - These are government-mandated benefits, such as supplementary pay, retirement plans, and healthcare coverage.
- Financial incentives and perks - These benefits keep employees motivated, engaged, and performing at their best.
- Supplementary benefits - These benefits help companies improve their relationships with employees and strengthen organizational loyalty, which include emergency funds, cashback, and exclusive employee discounts or vouchers.
Conduct Financial Coaching Sessions
Financial coaching requires employees to meet with a financial specialist to change their financial behavior, set and achieve specific goals, and form new financial habits.
Work with the Right Benefits Provider
Partnering with a benefits provider can translate to greater time and cost savings and also reduces the frequency of human error.
You can work with insurance providers or benefits administration software vendors for your financial wellness program. Let’s look at how these companies can help you manage your current program.
Insurance providers have agents and brokers who can help you offer health insurance, dental insurance, and related benefits.
Benefits Administration Software Vendors
With benefits administration software, you can manage employee benefits, monitor worker participation, and generate compliance reports.
Some all-in-one HR software suites feature this tool alongside hiring, attendance management, payroll, and other solutions. These systems offer automation to reduce your time spent on crucial HR tasks and store employee data in one place.
Invest in Financial Education
51% of employees say employers should help them improve or maintain their financial wellness. Promoting financial education at work is one way to fulfill that responsibility. If you’re developing a financial literacy training program, consider tackling topics such as:
- Budget and savings planning
- Setting achievable financial goals
- Retirement projections and planning
- Investment education that also covers complete portfolio allocation and balancing
You can discuss these areas through one-on-one coaching sessions, seminars, or webinars.
Take Care of Your Employees’ Financial Well-Being
Employees now find managing finances more challenging than ever, which has significant repurcussions on mental health and work performance. A financial wellness program can help your workforce overcome this and take steps toward better financial security.
Do you want to improve your workers’ financial wellness? Sprout offers InstaCash, a salary advance tool that makes emergency funds accessible to your employees whenever they face financial challenges. Learn more about InstaCash here or visit our blog for more HR updates and insights.