One way employers can ensure that their employees deliver their optimal performance is through workplace wellness programs. Your employees' health is easy to overlook, but the statistics don't lie: healthy employees are simply more productive, have better morale, and are generally more engaged with their workplace.
However, “health” goes beyond your employees’ physical and emotional well-being. Nowadays, it is holistic wellness that employers must strive for.
If you’ve heard of the term “financial wellness” being thrown around by companies, HR managers, and business leaders, know that there’s a good reason for this. Finances remain the leading stressor among employees. Financial instability can negatively impact your employees’ general well-being, and these worries, doubts, and anxieties spill over into their professional lives.
Financial wellness is more than just teaching employees to budget or organizing workshops to help them improve their financial habits.
What Is Employee Financial Wellness?
Financial wellness, sometimes referred to as "financial well-being," is a person’s overall financial health and the absence of stress related to personal money matters. It’s usually the outcome of effective expense management.
The critical components of financial wellness include the following:
- Control. We all have to make financial decisions every single day. Financial well-being includes the knowledge that you gave those choices some thought and consideration.
- Planning. Having a goal in mind encourages us to save money. Being comfortable with our finances requires taking action to prepare for the future.
- Security. Unexpected things happen all the time. Unfortunately, the majority of those unforeseen events have a financial impact. Having money set aside to get you through times of uncertainty—a job loss or a medical emergency, for example—creates a sense of stability and peace of mind.
- Freedom. In addition to providing for our basic needs, money should support our daily personal goals. We should be able to make choices that allow us to enjoy life.
The Data on Employee Financial Wellness
Before we get into why employee financial wellness is essential, let's look at some statistics that show us the current outlook of employees toward their finances and why employers should pay attention:
- 50% of employees admit that their finances are the most significant source of stress.
- One of the reasons why employees become unproductive, disengaged, or distracted is because they’re thinking about their finances for an average of 13 hours a month.
- 30% of employees report being preoccupied with personal finances while at work.
- A 34% increase in tardiness and absenteeism is attributed to financial stress. Additionally, compared to their less-stressed colleagues, employees who are worried about money miss nearly twice as many work days each year.
- Financial stress costs companies more than $2,400 per employee per year.
Why Employee Financial Wellness Matters
As you may have seen from the statistics above, financial stress will creep into your employees’ workdays. It’s true that, in a perfect world, your employees shouldn’t let their problems affect their work. However, it’s impossible to completely cut off your employees from certain aspects of their personal lives, especially their financial wellness.
Neglecting this might negatively affect your business in the long run. Here’s how:
1. Increased Productivity
Employees cannot work at their best when their focus is divided between work and financial difficulties. However, your employees' financial stability also has numerous other effects on their productivity outside of distractions at work.
For instance, some employees might need a second job, which would cause them to work less efficiently at their primary job.
You also have to remember that certain medical conditions may be exacerbated by financial instability. This will further harm your employees' productivity.
2. Reduced Healthcare Costs
Financial stress accumulates over time and eventually affects your employees' physical health. It will weaken their immune system and even contribute to a range of conditions, such as:
- Elevated blood pressure
- Respiratory issues
These and other illnesses can affect your employees’ productivity, but the consequences for your company go beyond that.
The truth is that you have an obligation to your employees’ health. But, unfortunately, you’ll pay more for health insurance to help them manage these conditions. Sadly, if the underlying problem of financial stress doesn’t get better, they might need ongoing medical care.
3. Better Employee Retention
76% of employees experiencing financial difficulties are more willing to consider another company if it offers better pay and benefits.
Every company's operations depend heavily on talented workers. But unfortunately, it's getting harder and harder to attract and hire qualified job candidates. As a result, companies even had to spend around $92 billion on hiring and training between 2020 and 2021, making acquiring and onboarding new staff expensive.
What Can Employers Do To Help?
This is where financial wellness programs come in. These programs are created to improve your employees’ financial situations, but they go beyond the standard economic benefits, such as retirement planning.
Every company should have a financial wellness program with the goal of helping employees create a more positive connection with their finances. With proper programs in place, you and your employees may enjoy the benefits listed below.
Benefits of Financial Wellness Programs For Employees
What’s great about financial wellness programs is that 88% of employees use them. Aside from learning how to manage their finances better, your employees will also:
1. Experience Reduced Mental Stress
Financial programs focusing on credit card debt, student loans, and retirement planning can help alleviate the tension and anxiety associated with managing them. Additionally, these initiatives lower employee stress levels and improve their general health by giving employees the resources they need to take charge of their finances.
2. Enjoy Increased Time Off Availability
Programs for financial wellness provide a range of complementary resources to assist employees during the workday. For example, employees who participate in financial wellness programs experience fewer money-related health issues through mental health counseling, financial education seminars, career coaching, or assistance and benefit programs.
Less stressed workers can use their vacation time for rest rather than spending the day in a doctor's office.
3. Find Ways To Lessen The Impact of Catastrophic Financial Events
A thorough wellness program offers employees a wide range of protections. In addition, employees can face more challenging circumstances with the help of programs like employer-sponsored life insurance and umbrella coverage.
In the same way, knowledge about financial planning and savings can help your employees prepare for problems that may occur and lessen their financial impact.
Benefits of Financial Wellness Programs For Employers
Not only will your employees benefit from comprehensive and tailor-made financial wellness programs! You’re sure to reap some rewards as well.
1. Improved Workforce Productivity
Programs like employer-paid student loans, benefit funds, and financial coaching can all help current employees feel more at ease. When you can minimize these distractions, productivity rises, and your business thrives.
2. Increased Employee Satisfaction
Giving your employees access to financial programs makes them more prepared for unexpected financial emergencies. Without this worry looming, they will likely be engaged at work.
3. Better Employee Retention
If your employees see that they will receive a helping hand with their finances, they are more inclined to stay with your company. This boosts retention and enhances the culture of your business.
In terms of benefits, these are only the tip of the iceberg. Other advantages you may experience with a financial wellness program include the following:
- Reduced absenteeism
- Stronger employee recruitment
- Higher 401(k) contributions
- Increased savings
What Financial Wellness Programs Can Employers Offer?
For your financial wellness programs to be effective, they must be comprehensive and tailored to the needs and interests of your employees. Some programs you can offer include:
1. Financial Wellness Tools
There are a lot of software programs out there that promise to help your employees with their financial situations. These solutions can offer everything from the individualized coaching and on-demand financial advice to targeted training and e-learning to increase the financial literacy of your staff.
2. Dedicated Partnerships
Another option is to collaborate with a business specializing in employee financial planning. You may, for instance, choose a partnership that provides your employees with services and expertise to help them manage their money better.
As unbelievable as it may sound, some businesses provide financial assistance to their employees. This can range from helping someone pay off their student loan debt to providing fertility support or donating toward adoption. They also provide other initiatives like providing access to student banking resources for employees to continue their education, benefitting both your business and employees. You can even start small with free parking spaces and the occasional free lunch.
If you have the budget, this is an option to look into.
You can also try the following:
- Life and disability insurance
- Emergency savings funds
- Company credit cards
- Student loan counselling
- Employee retirement plans
Ensuring Employee Financial Wellness To Achieve Business Success
Financial wellness programs are a win-win for everyone. You'll see a high return on investment in the long run due to increased productivity, performance, engagement, and retention. On the other hand, your employees will feel happier, more secure, and more prepared for whatever life throws at them.
So, if it’s business success you’re after, make sure you’re taking care of your employees’ overall health!