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The Benefits Of Financial Wellness Programs
The benefits of financial wellness programs can no longer be overlooked or ignored. Financial stress has been increasing over the years, and it certainly hasn't been helped by the COVID-19 pandemic and consequent layoffs and cuts. A huge number of Americans now suffer from financial concerns as a result of current events. In fact, according to a 2022 survey by Bankrate and Psych Central, 42% of Americans surveyed said that money worries are having a significant negative impact on their mental health. Because of this, financial concerns are also linked with higher rates of absenteeism and turnover among employees who feel overwhelmed by debt or insufficient funds for basic needs.
If this sounds like a problem you are facing with your employees, you might want to consider getting to the root of the problem by offering a financial wellness benefit package.
Financial Wellness benefits employees want
Employers are starting to realize just how important the benefits of financial wellness are.
Financial wellness can improve an employee's outlook on life and their mental state, which has been shown time and again in research studies. But what types of programs can your company implement to make lives easier for your employees?
According to recent surveys, these are the financial benefits that are the most preferred by employees:
Retirement planning options
According to a recent study by SHRM and Morgan Stanley, a retirement plan is a top-sought-after financial wellness benefit. Employees may find it easier to save for the future if their employer offers a retirement plan with automatic payroll deductions.
Retirement programs that match contributions go a step further. They provide tax advantages for employers as well as improved hiring and can potentially be used as a retention strategy, depending on how you structure the benefit.
Access to Emergency Funds
Payroll advances are a great way to help employees get by in an emergency, but they can be risky if you aren't careful. Employers must have a financial agreement with their employees and adhere to certain regulations since they're technically short-term loans.
A better option might be to offer your employees an emergency savings account funded through payroll deductions. These accounts can be set up like any savings account and connected to a debit card. Funds are deducted from employees’ paychecks like a retirement account, but employees can access funds whenever without penalties.
Financial reimbursements help employees gain further peace of mind in their lives and careers by providing them with an added incentive to relieve a financial burden – therefore having less financial stress that takes away from their focus.
Great examples of financial reimbursements that employees are looking for are:
- Tuition or student loan repayment plans
- Paid professional development
- Child-care fund support funds
- Commuting assistance
When payday comes at the end of the month, it’s easy for an employee who spends more than he/she makes in a given week to find himself with insufficient funds in his bank account and no way out until next month’s paycheck arrives. With a flexible paycheck schedule, they could choose not only when but also how much of their income gets deposited into their bank account each payday; this gives them more control over how much money goes through their hands before they get paid again.
Personalized Financial planning and Coaching Programs
Employees want personalized financial advice programs that are tailored to their unique circumstances, goals, and risk tolerance. These programs help give employees a better sense of how to manage their personal finances by helping them understand how credit card debt works and how to pay off loans faster. They also provide resources for employees to develop their financial literacy skills so they can make informed decisions in the future.
The Benefits of Financial Wellness
The benefits of financial wellness not only help employees in the long run, but they can also have a positive impact on your company's bottom line. Here’s how and why:
Improved employee productivity
76% of employees experiencing financial stress say that it impacts their productivity.
Employees who feel like they're on the right track with their finances are more likely to stick to their plans, and they may be more motivated to reach their goals. As a result, they'll be less distracted by money worries and more focused on the tasks at hand—which means you'll probably see an increase in productivity among your workforce!
Increase in Employee Satisfaction
On average, 8 out of 10 employers feel that financial wellness initiatives increase worker productivity and increase their overall job satisfaction.
Research shows that when companies offer a financial wellness program, employees are more likely to be engaged with their work and more loyal to their employer. Employees are also more likely to feel satisfied with their earnings if they know exactly how to manage them and make the most of them.
Greater employee retention
In the past year, two out of three companies believe it has been more difficult to recruit and keep employees.
Another major benefit of financial wellness programs, shown by research, is that employees who are financially secure are more likely to stay with their employer for longer periods of time. This is because they feel invested in their company and committed to the work they're doing there. On the other hand, those who lack financial security tend to be more transient—they may jump ship at any moment if something better comes along or if they find another job that offers more stability or better benefits.
Strong Employee Recruitment
Over 70% of employers say they agree that financial wellness programs make businesses more competitive when it comes to hiring and keeping employees.
Recruitment is always a challenge for companies, and the competition for quality talent continues to grow. One of the most important benefits of a financial wellness program is that it can be used as a selling point when recruiting new employees. You’ll be able to attract top talent by showing them how much you value their well-being while they're on the job.
According to the CIPD, employees are absent from work 6.2 days a year due to financial stress.
Increased absenteeism is a common issue when it comes to employee performance. If your employees are financially stressed, they may be more likely to miss work in order to deal with their financial problems. But with a financial wellness program, you can help employees become financially savvy. By getting to the root of the problem and helping them become more resilient towards financial stress and stressors, they are likely to be more physically and mentally present in the workplace.
There you have it; the benefits of employer financial wellness programs speak for themselves.
It’s not just about a paycheck anymore. It’s important for companies to offer benefits that make their employees feel valued by providing them with the tools needed to succeed in today’s world. Our financial wellness program can help you do just that. Contact us and experience the benefits of our financial wellness program for yourself.