One of the most valuable benefits employers can offer is a financial wellness program. Learn how it can help employees reduce stress while improving workplace productivity.
Financial wellness programs are becoming an important benefit for companies of all sizes. In 2021, almost half (46%) of all employers offered financial wellness programs, up from 40% in 2020. Additionally, interest from the workforce had only increased as they assessed how their finances were impacted due to the COVID-19 pandemic. [1]
The primary focus of a financial wellness program is to provide education and resources to help employees better manage their finances and reduce stress. A recent survey found that 60% of workers were concerned about their current level of debt, adding to their financial stress. Employees are seeking opportunities to improve their well-being, and many are interested in benefits like access to a financial professional (56%), financial planning tools (62%), and financial education (54%) [2]
WHAT’S IN A FINANCIAL WELLNESS PROGRAM?
Financial wellness programs should address the key aspects of the employees’ personal finance, including:
— Budgeting basics
— Managing debt (including student loan repayment)
—Credit counseling, including how to build credit
— Emergency and long-term savings strategies
— Understanding financial implications of their healthcare plan choice
— Risk management and insurance planning
— Retirement planning
— Estate planning (including wills and trusts)
— And offer access to financial advisors
Addressing each of these components can be accomplished in several ways, including regular employee meetings and providing financial how-to materials from reputable sources. Setting up access or classes with a financial advisor is a good first step to address a wide range of financial topics
TIPS FOR BUILDING A POWERFUL PROGRAM
Here are 5 key recommendations to help plan, implement and maintain a powerful financial wellness program:
- Prioritize employee needs. Understanding the specific hurdles employees face is an important step toward providing the resources and education when they need it
- Empower employees. Provide support for employees at every stage of their savings journey so they can keep control of their financial futures, and work towards retirement goals
- Provide education. To encourage good financial habits, provide education to employees that helps assess their current situation and plan for what’s next
- Diversity matters. A workforce is often a unique blend of genders, ages and backgrounds, so it is important to adapt support and education to address individual needs
- Think digital. Employees are increasingly more comfortable using digital apps, which can be useful in keeping employees engaged and empowered
DIFFERENT STROKES
Each of your employees are in different stages of their journey. For example, when it comes to retirement readiness, many workers fall into two categories: “Undersavers” (not saving enough for retirement) or “Oversavers” (those that have saved enough to achieve financial goals but are still working, saving and limiting expenditures). Ensuring you have financial wellness initiatives in place that address the specific and unique needs of a wide-spectrum of savers is a key component of any financial benefits program.
MORE THAN A “FEEL-GOOD” BENEFIT
While employers may consider starting a financial wellness program because it’s the right thing to do, it’s more than just a “feel-good” benefit. Helping employees reduce their personal financial stress can also have a number of positive impacts on the overall workplace. Each week, workers spend an average of 9.2 hours addressing their personal finances while at work. Improving employees’ financial well-being could have a positive ripple effect.[3]
- 86% of responded that the help would drive their productivity
- Nearly 9 out of 10 said it would improve their desire to stay with their employer
- Reducing financial stress would increase job satisfaction and engagement at work (84%); improve workers’ ability to focus (84%); and improve mental (84%) and physical (80%) health
Overall, employers of all sizes can implement some aspect of a financial wellness program to help employees reduce financial stress, improve personal well-being, and get on the path towards financial security. We are here to help when you are ready to discuss your retirement plan needs and its financial wellness strategy.
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.
[1] Bank of America “2021 Workplace Benefits Report” 22 Sept 2021
[2] Franklin Templeton “Voice of American Worker” 2 Feb 2022
[3] SoFi “The Future of Workplace Financial Well-Being) 30 Mar 2022