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The What, Why, and How of Financial Wellness Programs In The Workplace
How many times have you thought about money today – or at least something financially-related? Whether we want to acknowledge it or not, there is an unconscious connection between money and the influence it has on our thoughts and behaviors. If you’ve ever experienced financial stress, you will understand just how all-consuming it can be. It’s a mental plague that unfortunately doesn’t switch off or stay at home during working hours.
Apart from the personal affects it has, financial stress costs businesses billions of dollars every year, Naturally, as a caring employer, you want to help, but you still have a business to run.
With the help of financial wellness programs in the workplace, you can simultaneously help employees get back on track and keep your bottom line healthy.
What is a workplace financial wellness program?
A workplace financial wellness program is designed to help employees improve their overall financial health. These programs are designed to help employees reduce money-related stress, increase their asset-building finances, and achieve long-term financial security.
What should you look for in a financial wellbeing program?
There are many financial wellness solutions available, but not all financial programs are created equally. Ideally, employers should look for a program that meets a range of needs on several different levels, such as:
- Support for employees with all levels of financial capability.
- An evidence-based approach using data to improve outcomes.
- A streamlined experience that fits into an employee's everyday life.
- A focus on holistic financial wellness, not just investing or saving for retirement.
- Tools and insights for employers so they can gauge the program's success and see what works best for their workforce.
The different types of financial wellness programs
The first step to choosing a financial wellness program is to think about what you want to get out of it. Find out what it is that your employees truly need, but remember, they might be too embarrassed about their financial situation to directly talk about it. In this case, be sure to ask the right questions in a way that protects the privacy of your employees. This could be in the form of an anonymous survey, for example.
Once you know what your employees need, you can choose the right financial wellness program for your business. Some programs only teach people about money, while others add matching with employers, insurance, and other opportunities.
There are a few different types of financial wellness programs available to businesses, and many can be tailored towards a certain need.
Let's look more closely at some of the different ways you can improve your employee’s financial health:
Educational financial coaching programs
These programs are aimed at educating employees on how money works, how to make money work for them, and how to make better decisions with their money.
Educational programs can be in-person, online, or through live webinars and should be led by a certified financial expert outside the company. This is because employees can be confident that they are receiving unbiased, professional advice.
Insurance programs offer employees access to discounted health insurance, life insurance, and disability insurance. They're a great way to help employees save money on premiums and help them manage their finances better by eliminating out-of-pocket costs associated with medical bills and emergencies.
Employer matching programs
Employer matching programs are a great way for employees to save for the future. The employer matches an employee's contribution, dollar for dollar, up to a certain amount. The most common option is employer matching of retirement account contributions, but it can also be done with other accounts like health savings accounts (HSAs) or health reimbursement arrangements (HRAs). These plans are typically administered by an outside company that handles all the paperwork and ensures the employer is compliant with applicable tax laws.
Financial assistance programs
Financial assistance programs concentrate on alternative pressures that are impacting on their employees’ financial well-being. In most cases, these programs are structured so that the employer will contribute or pay for certain expenses if employees can prove that they are having difficulty paying for them.
Examples of these financial aid programs include:
- Sponsorships for medical bills
- Debt settlement or negotiation
- Flexible spending accounts and health savings accounts
- Relocation assistance
- Mortgage assistance
- Reimbursements for professional development
The benefits of financial wellbeing at work
It’s no secret that money management is an important life skill, but how does financial well-being at work benefit employers and businesses?
Up to 18.8% increased retention and loyalty
Happy, engaged employees are more likely to stay with a company for longer periods of time. A study by BenefitsPro found an 18.8% increase in retention when organizations offered financial wellness programs to their employees. It also showed that employees tend to work harder, collaborate better with their colleagues, and think positively about their company's leadership team.
Reduced cases of employee theft
Between the high cost of living and stagnant wages, it's easy for workers to feel stressed about their financial situation. This financial stress can often lead them to make poor decisions - like stealing from the company they work for.
Employee theft is one of the most common challenges facing businesses today. According to studies, employee theft costs U.S.-based companies $50 billion annually - and nearly half of those losses are due directly to employee fraud or theft-related incidents that could have been prevented through effective financial wellness programs in the workplace.
On average, unplanned employee absences cost employers between $2,660 - $3,600 annually.
There are many ways that financial stress can cause people to miss work. These can be anything from short-term absences to take care of finances to long-term absences to recover from serious health problems like emotional exhaustion or illness caused by stress. Employees who participate in financial wellness programs report feeling better prepared to meet their needs and goals, resulting in their being less likely to miss work due to stress or other issues related to money.
Increased productivity and engagement
Businesses with engaged employees report having 23% higher profitability. Financial wellness programs in the workplace help employees to be more productive, focused, and efficient. By improving their financial lives, employees are able to focus on the tasks at hand without having to worry about money problems.
This leads to a greater level of engagement within the workplace. Employees who are in a better financial situation tend to feel more engaged with their work because they're not distracted by problems outside of the office environment.
What the future holds for employee financial wellness
Financial wellbeing at work sets the stage for highly effective employees and a strong company culture. Employers need to think about how employee financial wellness programs affect the health and engagement of their staff. The time is now for organizations across all industries to think about what their approach to employee financial health will look like in the next few years. Will you be one of the leaders in the field, offering life-changing incentives to your employees? Or will you wait for others to pave the way before you consider implementing any programs of your own?
Start your workplace financial wellness journey today!