The term “financial wellness” has received a lot of buzz over the past few years, and corporations are jumping on board at accelerating rates. According to a 2015 Aon Hewitt survey, 93% of employers intend to increase focus on the financial well-being of their employees in a way that extends beyond retirement. This expansion of benefits could take the form of new plan features, mobile apps or online tools to assist individuals with understanding financial concepts and financial planning, as well as access to affordable funding.
Where did this increased interest in employee financial wellness come from? In the aftermath of the recent economic recession, today’s workplace remains fraught with financial stress. According to SHRM’s Financial Wellness in the Workplace Survey, 38% of surveyed HR professionals say their employees have more financial challenges now than they did in the early part of the 2007 recession. What’s more, 7 out of 10 HR professionals say that personal financial challenges have at least some impact on overall employee performance.
Why prioritize financial wellness programs?
By offering financial wellness education and counseling programs, companies can help lighten the load for employees, improve morale and increase workforce performance and efficiency. When workers are making wise choices about spending, saving and investing, they enjoy more stability and the company’s culture flourishes.
QuoteWhen workers are making wise choices about spending, saving and investing, they enjoy more stability and the company’s culture flourishes.
Specifically, financial wellness programs can benefit your organization in several ways:
1. Productivity. According to a survey by MetLife, Inc., 81% of workers say financial problems hamper their productivity at work. From the managerial perspective, 61% of human resource professionals report that financial stress has some effect on employee performance.
It’s clear that personal financial difficulties are distracting a significant portion of the American workforce — but how can financial wellness programs make a difference? According to a report from the Consumer Financial Protection Bureau, 40% of employees say they want help in achieving financial security, and wellness programs can aid their journey. When workers learn how to create a personal budget and build an emergency fund, they stop worrying about the next financial crisis — because chances are, they’ve averted that crisis before it happens. They’re empowered to take control of their financial situation, and that means they’re happier and more focused at work.
2. Contagious engagement. Engaged employees are those who go the extra mile — they’re not just satisfied with their jobs and employers, they’re committed to the mission of their company with an enthusiasm that’s contagious. Worker engagement has a mighty impact on business growth: high-engagement firms experience a growth rate of 28% per share, while low-engagement firms see an 11.2% decline, according to a global workforce study by Willis Towers Watson.
How can you inspire that kind of enthusiasm in your workers? It depends on a combination of factors: inspiring trust, showing deep care for employees, and striving to communicate clearly about company goals. Financial wellness programs can play a vital part in creating a work environment that’s supportive and low-stress — two elements that contribute to employee engagement.
3. Long-term retention. When workers are productive and engaged, excited about their jobs and supportive of company goals, they’re likely to stay put. Sixty-five percent of employers report that overall financial wellness for their workforce means increased loyalty from employees, according to a study by the Personal Finance Employee Education Foundation.
QLI, a nonprofit organization in the rehabilitation industry, noticed a decade ago that many of its employees faced financial crises. The organization responded by offering a financial training program. Since its introduction, 70% of QLI’s staff has participated in the financial wellness program — and the organization’s turnover rate for the employees it wants to keep hovers between 6% and 9%, a very low rate in the rehabilitation industry.
4. Differentiation and reputation. Offering a financial wellness program — or a better financial wellness program — can help your company stand apart from competitors, building your reputation as a desirable employer. A recent survey conducted by Harris Poll found that 86% of employees said it was important for employers to offer financial wellness programs. But 46% of the same employees said their current employers do not offer those programs.
By creating even a modest financial wellness program and communicating its availability to your workers, you’ll set yourself apart, gaining a competitive advantage against other employers.
Creating a financial wellness program is a win-win decision — when your employees benefit, so does your company. And the investment isn’t as great as you might think — according to the Consumer Financial Protection Bureau, private employers spend an average of $144 per worker per year on financial wellness programs.
Add up the combined benefits of higher productivity, engagement and retention, and you’ll find that a financial wellness program will more than pay for itself.
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