Enhance Your Workforce With Employee Financial Wellness Programs

If you search on Google, there are many definitions of financial wellness. One that cap-tures it at the core is “a state of financial well-being in which you can manage your bills and expenses, pay your debts, weather unexpected financial emergencies and plan for long-term financial goals, such as building college funds and saving for retirement.”

As employees face mounting financial challenges, organizations have a unique opportuni-ty to support their workforce by implementing effective employee financial wellness pro-grams. 

Employee Financial Wellness Programs and Employee Financial Wellbeing

From purely a bottom-line perspective, implementing an employee financial wellness programs can make good business sense. That’s because financially stressed employees tend to be more distracted, less engaged and more likely to seek another job.

According to PwC’s 2023 Employee Financial Wellness Survey, one in three full-time employees says that money worries have negatively impacted their productivity at work.
In addition, financially stressed employees are nearly five times as likely to admit personal finance issues have been a distraction at work

The survey also noted that distractions add up and can cost employers productivity. Among financially stressed employees who are distracted at work because of their finances, 56% spend three hours or more per week at work dealing with or thinking about issues related to their personal finances.

Financially stressed employees are also more likely to leave. Only 54% feel there is a promising future for them at their employer, compared to 69% of employees who are not stressed about their finances. They are also twice as likely to be looking for a new job (36% of financially stressed employees compared to only 18% of non-financially stressed employees). And 73% of financially stressed employees say they would be attracted to another employer that cares more about their financial well-being compared to just 54% of non-financially stressed employees.

Employee Financial Wellness Programs Impact on Financial Stress

Recent research from Talent LMS revealed that when implemented, employee financial wellness programs can contribute to organizational success by improving employee satisfaction, productivity, and overall well-being – including the ability to better cope with inflation and other economic stressors.

Elevating job satisfaction and retention. 83% of employees who received financial wellness training are satisfied with their job, compared to 63% who did not receive training. 

Improving focus and productivity. Two-thirds of employees (67%) who received financial wellness training say it helped their productivity, while 8 in 10 said it helped them be more focused at work.

Combating stress. Financial wellness training is helpful in reducing stress to 71% of employees. This percentage is even higher for millennial employees (75%). Finally, 73% of employees say that the financial wellness training they get at work helps them feel more safe and secure.

Coping with inflation. It’s no secret that concerns about inflation have dominated the news headlines for the past few years. Over 6 in 10 employees (64%) getting financial wellness training say it is helpful for coping with rising inflation. Providing financial training courses can help them navigate an overheated economy and income squeeze — where employees say they feel the most pain.

Key Components of Effective Employee Financial Wellness Programs

While every company’s needs and objectives will vary, an effective employee financial wellness program typically includes the following key components:

1. Employee Financial Education and Literacy 

   • Provide workshops, webinars, or online resources to enhance employee understanding of basic financial concepts. Cover topics like budgeting and cash flow management, saving, investing, good debt versus bad debt, and insurance.
   • Encourage employees to participate in financial literacy programs to build a solid foundation. For example, the Financial Literacy Resource Directory, developed by the U.S. Office of the Comptroller of the Currency, provides individuals with a great opportunity to explore a large selection of financial literacy resources arranged by topic. The site includes an assortment of educational resources on basic financial capability, credit management, home buying, retirement and financial security.

2. Personalized Financial Counseling 

   • Offer one-on-one sessions with financial advisors or counselors. Employees can discuss their specific financial situations, receive personalized advice, and create actionable plans.
   • Address individual concerns related to debt, retirement planning, and investment strategies.
     

3. Retirement Planning

   • Continue to educate employees about the features and benefits of their work-place retirement and the importance of early planning. 
   • Provide tools to estimate retirement needs and educate them on Social Security benefits as well as average life expectancy at various life stages.
     

4. Debt Management 

   • Help employees understand different types of debt (student loans, credit cards, mortgages) and strategies for managing them.
   • Consider offering resources on debt consolidation, refinancing, and repayment plans.

5. Emergency Savings

   • Promote the importance of building an emergency fund. Encourage employees to set aside funds for unexpected expenses (e.g., medical emergencies, car repairs).
   • Provide guidance on how to establish and maintain emergency savings.

6. Healthcare and Insurance Education

   • Explain health insurance options, including deductibles, copayments, and coverage.
   • Highlight the benefits of health savings accounts (HSAs) and flexible spending accounts (FSAs).

7. Work-Life Balance

   • Recognize that financial stress affects overall well-being. Encourage work-life balance to reduce stress and improve financial health.
   • Consider flexible work arrangements or mental health support.

8. Access to Financial Tools and Apps

   • Recommend reliable apps or online tools for budgeting, expense tracking, and investment management.
   • Ensure employees have easy access to these resources

9. Regular Assessments and Adjustments 

   • Evaluate the effectiveness of the program periodically.
   • Adjust offerings based on employee feedback, changing needs, and external factors.

Final Thoughts: Financial Wellness Program Best Practices 

Reduce inertia. Encourage employees to attend these programs during work hours or provide incentives for participation.

Offer personalized resources based on employee needs. For example, for young employees, focus on student loan management, credit building, and basic budgeting. For mid-career employees, provide information on retirement planning, home buying, and investment strategies. For near-retirement employees, address Social Security, Medicare, and estate planning.

Leverage local expertise for financial counseling services. Partner with financial advisors or credit unions to offer one-on-one counseling. Employees can discuss their specific financial situations and receive tailored advice.

Promote open communication. Create a culture where employees feel comfortable discussing financial concerns. Consider having managers share their own experiences and lessons learned.

Lead by example. Business owners, executives and managers should prioritize and show support for the company financial wellness program and set a positive tone for the entire organization.