Promoting employees' financial wellness
Alleviating money worries enhances organizational productivity
Shaky personal finances are a principal source of stress for employees, which can reduce productivity on the job. Research suggests they are looking to their employers for help—and many businesses are responding by offering workplace-based "financial wellness" programs.
Typically, the root of employees' financial stress is a lack of knowledge about personal financial management principles and practices. Financial wellness programs aim to equip employees to make important financial decisions in the workplace about matters such as retirement savings and health plan selection, as well as to help them manage their finances wisely on an ongoing basis.
In 2016, 52% of employees polled by PricewaterhouseCoopers (PwC) reported they find dealing with their financial situation stressful.1 Research confirms such stress has a negative impact on employees and can become a distraction at work. What's more, whether they are stressed or not, employees who lack financial wellness are less able to take advantage of existing benefits, particularly 401(k) plans, threatening their ability to retire.
Because financial wellness programs are still in their developmental stages in pioneering organizations, research into their impact is not yet conclusive. Still, according to the Consumer Financial Protection Bureau, "reports suggest financial wellness training may positively impact stress and related costs the same way employers are finding success in addressing health behaviors."2
Successfully implementing a financial wellness program requires you to address employee needs. PwC research suggests that their biggest worry, insufficient financial reserves for emergencies, highlights the need for education around day-to-day spending management and cash flow planning.
It's also important to take stock of programs already in place at your company that touch on financial wellness, such as retirement savings and planning efforts offered in conjunction with your 401(k) or guidance on taking advantage of a health savings account. Are these programs achieving their goals? Could they be incorporated effectively into a more holistic financial wellness initiative?
Once you've analyzed your employees' needs and how best to address them, you'll need to lay the groundwork before launching a financial wellness program. Common issues that need to be addressed proactively include employee privacy concerns regarding their personal financial information; cost concerns, particularly related to staff time to manage the program; and philosophical issues, as some executives need reassurance the effort isn't an attempt to micromanage employees' personal lives.
Once the initiative receives any required budget and authorization, its advance marketing to employees and launch should be given the same degree of care as is taken, for example, with open enrollment for your health plan.
Devise and implement a method of obtaining baseline data on employee financial awareness prior to launch so you can assess the program's successes and shortcomings. You should also be ready to make any required modifications as you move forward.
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