When it comes to benefits employees want, financial wellness benefits are increasing in their importance. In fact, a recent PwC survey found the vast majority of employees now want help with their finances. Given the amount of stress that finances can create in an employee’s life, it makes perfect sense. In this week’s blog, we explore why financial wellness employee benefits must be a part of every employer’s well-being strategy.
Employees are even more stressed about their finances today than during the height of the pandemic.1
According to a 2023 Bankrate survey, nearly half of U.S. adults have less savings (39 percent) or no savings (10 percent) compared to a year ago.2 The same survey found 68% of people are worried they wouldn’t be able to cover their living expenses for just one month if they lost their primary source of income, including 85% of Gen Zers. A PwC survey found percent of full-time employees say inflation has had a major or severe impact on their financial situation over the past year.3
Given that financial stress can impact employee health and well-being, and productivity on the job, it makes sense that more and more employers are stepping up support for financial wellness. A Bank of America survey found that 97% of employers now feel responsible for employee financial wellness (up from 95% in 2021, and from 41% in 2013).4 Let’s take a look at the reasons why adding this benefit is so important.
6 reasons why financial wellness is a must-have benefit for employees.
- Increased employee engagement: Offering financial wellness benefits shows that an employer cares about employee well-being beyond the work day and can contribute to a healthy workplace culture.5 According to Bank of America, 80% of employers agree that offering financial wellness support can result in more satisfied, loyal, engaged and productive employees.6
- Enhanced productivity: It’s no secret that employees who are financially stressed can be distracted at work and often devote work hours to handling financial issues (presenteeism). They also might need to take time off to handle financial matters, increasing absenteeism. Offering financial wellness benefits can alleviate some of this stress and help employees be more productive in their work.
- Better employee health and well-being: According to the American Institute of Stress, the physical effects of financial stress might include increased irritability, mood swings, appetite changes, stomach issues, fatigue, and insomnia.7 Left unchecked, these symptoms may lead to mental health concerns like anxiety, depression, or even suicide. Providing support for financial wellness can improve the employee population’s health, and possibly lower healthcare costs in the long run.
- Increased retention: A recent Bank of America report revealed that 84% of employers now say that offering financial wellness tools can help reduce employee attrition.8 Research by Purchasing Power found 61% of employees who have utilized their platform’s particular financial solution are more likely to stay with their current employer.9
- Talent recruitment and employer brand: Much like other well-being benefits, job seekers are looking for employers who offer perks and support for financial wellness. Companies who offer these benefits may be viewed more favorably not only by job seekers, but also customers and the public, enhancing an employer’s brand and reputation.
- It’s the right thing to do: Educating employees about financial concepts, such as budgeting, saving, investing and debt management, can help improve the workforce’s financial literacy and lead to long-term financial stability, particularly for historically marginalized groups.
Getting started with a financial wellness program
While employers have traditionally focused on helping employees prepare for retirement through 401(k) plans, the truth is there are lots of important financial decisions that take place in the intervening years, like sticking to a budget, buying a home, sending kids to college and more.
This is where financial wellness programs come in. A financial wellness program gives employees the tools they need to manage day-to-day finances, weather unplanned expenses, and help them plan and save for future milestones.
Not sure what your employees might want in a financial wellness program? Just ask. Pulse surveys are a great way to find out what your employees want help with. Once you gather information on the kind of financial wellness support they’re looking for, you can better cater your benefits to their specific needs.
What are financial benefits to offer?
Whether you partner with an outside financial wellness provider or create an in-house program, you might consider offering employees:
- Online financial tools, calculators and mobile apps to help with day-to-day budgeting, saving for college, retirement planning and more.
- One-on-one financial counseling services to help employees solve immediate financial concerns and financial coaching services to help set goals for the future.
- In-person or virtual financial education classes and seminars led by financial experts on topics of interest, like smart investing or easy ways to save.
- Access to debt management services to help with student loan repayment or paying down credit card debt. Some employers are even providing direct financial assistance with repaying student loans.
- Short-term loans or wage advances, which allow employees to get access to low-interest cash in an emergency and then repay the loan through payroll deductions spaced out over time.
- An Employee Assistance Program, which typically features its own financial tools and resources, including things like help with identity theft.
As employers respond to employees’ desire to receive support across multiple aspects of their well-being, it’s important to consider adding financial wellness benefits to the mix. Offering these benefits is a smart move for employers who want to improve employee satisfaction and increase engagement; raise productivity; enhance well-being; attract and retain top talent; and foster a positive company culture and healthy employer brand.