• When it comes to financial wellness, there’s a concerning gap between intent and execution in corporate America. At the same time, 98% of HR leaders believe financial education and counseling are essential, and only 26% of businesses currently have a program/initiative to improve employee financial wellness.
• Helping your employees achieve financial wellness isn’t just the right thing; it can speak directly to your bottom line.
• By adopting innovative benefits programs, employers can make a tangible impact on their workers’ well-being and boost productivity, retention, and customer satisfaction at the same time.

Financial stress is taking its toll on US workers’ physical and mental well-being. Financial challenges can also impact employees’ ability to be engaged at work, affecting their productivity and engagement and, in some cases, resulting in increased turnover rates. 

We recently polled HR managers from a wide range of industries and learned that 98% of HR leaders believe financial education and counseling are essential, but just 26% of businesses have a program or initiative to improve employee financial wellness. 

Corporate success requires addressing the gap in employee financial wellness, which is a vital aspect of both physical and mental wellness. To achieve this, companies can introduce financial wellness programs to help employees manage their finances effectively and alleviate financial stress. The most effective financial wellness programs incorporate just not the tools but also focus on financial literacy, education, and coaching to empower employees to take control of their financial lives.

Boosting Business Performance with Employee Financial Wellness Programs

A recent global survey reveals that approximately 36% of C-suite executives recognize that investing in employee health and well-being can yield measurable business returns. The survey also shows that financial wellness initiatives are equally effective as health-centric ones.

Poor mental health, estimated by the World Economic Forum (WEF) to cause lost employee productivity of $1 trillion annually, can lead to physical symptoms such as headaches, digestive issues, muscle tension, pain, and insomnia. Some workers may even resort to unhealthy coping mechanisms like drugs or alcohol. Ultimately, employees with lower stress levels perform better at their jobs and make fewer errors.

PwC’s recent Employee Financial Wellness Survey found that 38% of financially stressed employees are actively seeking employment elsewhere, with 75% of them looking for organizations that prioritize their financial well-being. Companies that offer financial wellness programs are more likely to retain their employees, thereby avoiding unnecessary expenditures on recruitment and training and the loss of skills and institutional knowledge that is difficult to recover.

What Does an Employee Financial Wellness Program Look Like?

Some common elements of an employee financial wellness program should include:

1. Digital Financial Wellness Tools

In recent years, there has been a significant increase in software solutions designed to help employees improve their financial health. These solutions offer a range of tools and resources that can help employees build sound financial habits and grow their financial acumen.

Personalized budgeting and savings software can use data analytics to help employees identify areas where they can reduce expenses and save money. These tools can provide employees with a better understanding of their financial situation and help them develop a more realistic and achievable financial plan.

In addition to budgeting and savings tools, many financial wellness solutions offer custom training and counseling to help employees develop financial management skills effectively. This can include training on debt management, retirement planning, and investment strategies.

E-learning platforms can provide employees with a wealth of information and resources on financial management, ranging from basic financial literacy to more advanced topics such as tax planning, risk management, and estate planning. 

2. Earned Wage Access (EWA)

One of the most innovative ways companies can support their employees’ financial wellness is by offering earned wage access (EWA). EWA allows workers to access their already accrued earnings before payday, providing a much-needed safety net in case of emergencies or unexpected expenses.

This means that employees have better control over their finances and can avoid the stress and uncertainty of living paycheck to paycheck. With EWA, workers can access cash when needed most, without resorting to personal loans or other high-interest options that can leave them with debt and impact their credit scores.

By offering EWA, companies can demonstrate their commitment to supporting their employees’ financial health and well-being. This can lead to improved morale, engagement, and loyalty among workers, who appreciate their employer’s efforts to alleviate financial stress and improve their overall quality of life.

3. Employee Discount Programs

Who doesn’t love a good discount? Employee discount programs are a fantastic way for companies to help their workers save money while still accessing the goods and services they need. These programs offer discounts on various items, from gas to medical prescriptions and movie tickets.

By providing access to discounted goods and services, employers can help alleviate financial stress for their employees, ultimately leading to improved productivity, engagement, and job satisfaction. Employee discount programs foster a sense of community and loyalty among employees, as they see their employer is invested in their financial well-being. This can lead to greater retention rates and overall job satisfaction, ultimately benefiting the bottom line.

How to Launch an Employee Financial Wellness Benefit

1. Start by assessing your workers’ financial challenges and needs. Conduct an employee financial health assessment through a confidential questionnaire to understand their financial plans, state of mind, and management habits. Questions like “how confident are you that you’ll have enough money for a comfortable retirement?” and “could you currently raise $1,000 to deal with an emergency?” can provide valuable insights into their financial challenges. Analyzing the results can help you determine which group of employees needs help the most and select a balanced and effective solution.

2. Personalize Your Program.  A program tailored to an individual’s needs and interests is more likely to resonate with them and encourage them to engage. A one-size-fits-all approach may have the opposite effect, potentially disengaging employees from the program.

3. Communicate the launch of your new financial wellness program effectively. A multi-channel approach is recommended, including email, and newsletters, leveraging your intranet, and encouraging managers to discuss it during team meetings and one-on-ones. For your deskless workforce, consider using posters, noticeboards, and brochures to introduce your new financial wellness benefits. Remember that employees can only benefit from the program if they are aware of it and know how to use it.

4. Finally, monitor the impact and adoption rates of your new benefit. Research shows that companies considered “leaders” in financial wellness are more likely to track the success of their initiatives using different metrics. These companies are significantly more likely to track employee satisfaction with the program, completion rates of tutorials and workshops, and worker engagement than “laggards.”

The Wrap-Up

Investing in employee financial wellness is a crucial aspect of corporate success, impacting both physical and mental wellness. Despite this, the gap between intent and execution remains significant, with only 26% of businesses having a program or initiative to improve employee financial wellness. 

However, introducing financial wellness programs, incorporating financial literacy, education, and coaching, can make a tangible impact on workers’ well-being and boost productivity, retention, and customer satisfaction. Companies that offer such programs can avoid unnecessary expenditures on recruitment and training, and retaining employees.

By leveraging innovative tools, discount programs, and earned wage access, employers can demonstrate their commitment to supporting their employees’ financial health and well-being, leading to improved morale, engagement, and employee loyalty. A program tailored to your employee’s needs and interests is more likely to resonate, making it more effective in promoting employee financial wellness.