Ask Benny: What is the benefit to adding a financial wellness program?
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With the unemployment rate at a 50-year low of 3.8%, HR professionals are in a fierce competition for top candidates. But once they acquire that talent, they’re constantly facing the challenge of retaining and grooming top performers. Expectations are high with today’s workforce — everyone is looking for a personal approach to the way they are treated and supported by their employers.
A holistic financial wellness program can serve as a powerful tool to help clients recruit, retain and groom top talent. Based on my experience, I’ve found there are five elements to these programs that can be hugely beneficial to HR professionals.
Culture. Starting a financial wellness program demonstrates that clients care. It shows that they promote a culture of overall well-being and attention to the personal growth of employees. Too often HR professionals are the welcome mat to an organization. They're seldom recognized for what they do, and more often criticized for what they aren’t doing. Financial wellness helps employees recognize that employers do care about them on an individual basis, and this fact alone can provide for a more desirable and interactive culture for the organization.
Less paperwork. Benefit administration is an under-appreciated, time-consuming HR responsibility. Financial wellness programs that provide real-world solutions to financial challenges drastically reduce the time clients spend administering employee loan requests and processing 401(k) advances.
Indeed, nearly 60% of investors ages 18 to 34 say they already have taken money from their retirement account.
Reduce turnover. This is a big one. About 69% of employees are stressed over their finances, and 72% admit to focusing on personal financial challenges at work. If clients can provide them support and options to get through these issues, they’ll stick around.
Increase ROI. Financial wellness programs are proven to reduce stress and absenteeism, which ultimately creates positive ROI for clients. Those 72% of employees focusing on personal finances at work are costing employers $2,000 per employee. Organizations that implement a holistic financial wellness program see a 3:1% return on their investment.
Employee development. Educational tools and resources create behavioral change within each employee, motivating them to improve their knowledge and progress down the path to financial stability. This includes helping employees define their retirement goals and providing recommendations to ensure they’re able to retire comfortably and predictably. This allows clients to model and follow workforce migration trends and more effectively plan for future organizational needs.
About 82% of employees want their company to offer free financial education courses focusing on retirement planning, emergency savings, budgeting, student loan payoffs and identity protection.
Employees want to feel valued and appreciated. They also want access to resources that will help them live their best life. Clients should engage their employees as if they were customers. They should focus their benefit communications on the traditional “what’s in it for me?” methodology. Financial wellness programs have tangible, real-world applications whereby employees will see immediate return on their investment. Ultimately, they’ll have clients to thank for making the benefit available and allowing them to live their best lives.