The relationship between an employer and an employee is complex as it is made up of several different layers of responsibilities on each side of the line. The most critical component of this connection is money; employers are responsible for paying workers a certain amount for work performed and in return, employees expect that paycheck to show up on time and in full. Even with this steady pay arrangement, many workers struggle to maintain a firm grip on their personal financial circumstances in a way that provides stability and security. Employers cannot manage a worker’s paycheck once it reaches its final destination, but companies can offer financial wellness benefits to employees in an effort to improve their money management behaviors both on and off the job.
Even with this steady pay arrangement, many workers struggle to maintain a firm grip on their personal financial circumstances in a way that provides stability and security.
Financial wellness benefits are growing in popularity among companies and employees alike, but not every organization is convinced offering a financial wellness program is the best fit for its bottom line or its workers. That’s because measuring the need for financial wellness at work is not cut and dry, but instead requires a deep dive into what employees want and why they want it. Determining the need for financial wellness starts with understanding the impact financial woes have on a worker and ultimately, the company itself.
First, Review the Statistics
When attempting to evaluate the need for a financial wellness benefit offered to employees, there is no better place to begin than the research. Several organizations have compiled statistics surrounding the state of financial literacy and the impact of a financial wellness program throughout companies large and small, all of which point to a clear call to action. In 2016, the International Foundation of Employee Benefit Plans conducted a survey of its members, consisting mostly of employers and benefit plan sponsors. The results were telling, with two in five employers indicating that employees’ financial issues had a high or extremely high impact on overall job performance. Only 4% stated money management concerns had no impact in the workplace.
Two in five employers indicating that employees’ financial issues had a high or extremely high impact on overall job performance.
The specific factors influenced by stress linked to financial issues included an inability to focus on work, being late and missing work altogether, diminished morale, and poor physical health. When PricewaterhouseCoopers polled employees in its annual Financial Wellness Survey, nearly one in three responded that issues with personal finances cause distractions on the job. An average of three hours per week was spent dealing with money management concerns, often on company time.
Not only do these factors impact an employee’s confidence level, but they also have a direct impact on a company’s ability to operate efficiently. In offering a financial wellness benefit to employees, employers have an opportunity to reduce these widespread, costly concerns through improved financial education that leads to changed money management behaviors.
Dig Deep into Employee Concerns
In addition to reviewing the stats related to a lack of financial wellness among workers, employers questioning whether a financial wellness benefit is necessary can get answers from their employees directly. Conducting an assessment through an anonymous survey in-house gives companies the ability to pinpoint the issues affecting its employee population, and subsequently, the need for increased financial literacy, education, and overall well-being.
Survey questions may ask employees to provide details on the specific concerns they have surrounding financial management, like paying down debt, saving for emergencies, or putting away funds for long-term goals like retirement. Younger workers may feel more burdened by student loan payments and cash flow issues, while older employees may be more focused on increasing their nest egg, but companies shouldn’t assume they know employees’ needs without first asking the question. Regardless of the demographics of the employee population, companies can gain insight into the unique financial issues plaguing their workers and begin to tailor a financial wellness program around those specific concerns.
Staying on Track
The most successful financial wellness benefits offered by employers are customized to their employee populations from the start, often based on survey data. As the employee population ebbs and flows over time, it is necessary for companies to evaluate how well a financial wellness program is serving the needs of its workers. Periodic assessments are helpful in gathering information about the strength of a financial wellness program so that companies can evaluate the value of their investment.
These ongoing evaluations may include how employees’ financial habits or confidence levels have changed over time, how engaged the workforce is in a specific aspect of the wellness initiative, or the preferred method for receiving financial wellness benefits. Employers are able to see the fruits of a financial wellness program in action when these aspects are benchmarked and measured over time, but it all begins with acknowledging the need among employees.
Employers are able to see the fruits of a financial wellness program in action when these aspects are benchmarked and measured over time, but it all begins with acknowledging the need among employees.
Companies that don’t yet recognize the desire for financial wellness in the workplace can look to their peers to see that offering such a benefit to employees is a move in the right direction. Aon Hewitt reports that 77% of employers plan to offer at least one form of financial support to workers, with more than half providing a comprehensive financial wellness program in 2017. It is clear that more employers realize the advantages linked to financial wellness initiatives in-house. These programs offer a sound way to reduce the overall stress of workers when it comes to their personal financial situations, and ultimately, financial wellness benefits improve the efficiency while reducing costs for the company offering them.